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re: How is my financial state at 26? Thanks for the input.
Posted on 2/15/14 at 12:43 pm to Herb484
Posted on 2/15/14 at 12:43 pm to Herb484
quote:
I have three student loans with the highest interest rate being 6.5%, which I don't think it bad.
There's only 1 reason not to retire the SL balances: if you project eligibility for some sort of loan forgiveness that is more advantageous than outright payment. The money used to be regarded as fairly cheap, but 6.5% - while not "expensive" isn't exactly cheap either.
And, there are only narrow instances of discharge through bankruptcy or other debtor protection mechanisms. AND they can use the IRS as their collection agent, and on and on.
So, I would retire those, perhaps even before the car or consumer debt for that reason (although if you had a couple of thousand at 10 to 12% on a card, or other consumer debt in the teens or greater, my analysis might change.)
But, continuing a stream of money into investment vehicles is an excellent habit and one you should consider continuing. Avoiding/reducing debt, particularly debt that will not make you any money down the line, is another habit to continue - wealth is built upon those 2 habits, along with a solid work ethic, particularly for the middle class. These habits work relatively indepentently from talent, job skills or social status at birth.
This post was edited on 2/15/14 at 12:44 pm
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