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Message
re: Debt payoff questions
Posted on 12/21/20 at 7:15 pm to Tigerfan56
Posted on 12/21/20 at 7:15 pm to Tigerfan56
Wrong. I just paid off 60,000. I know from experience that when you hold debt, you pay for it. Its not free regardless if you can ignore it.
Do the math, he is losing, not winning.
Do the math, he is losing, not winning.
1
Posted on 12/21/20 at 7:16 pm to Tigerfan56
quote:
he’ll be much better in the long run by investing his $86k instead of paying off debts.
Investing is not guaranteed and neither is his salary. Pay off your debt and save. Thats the only answer.
Posted on 12/21/20 at 7:18 pm to Mud_Till_May
quote:
Wrong. I just paid off 60,000. I know from experience that when you hold debt, you pay for it. Its not free regardless if you can ignore it.
Look, that’s great and I see how for some people that would be the best decision for them. It isn’t a one size fits all approach though.
quote:
Do the math, he is losing, not winning.
Ironic, because if you actually do the math - he’s winning (assuming the excess money is in the market).
Posted on 12/21/20 at 7:20 pm to Tigerfan56
quote:
Ironic, because if you actually do the math - he’s winning (assuming the excess money is in the market).
Thats prospecting. Live in the now, financing is much more expensive than paying cash. Cash is King.
Posted on 12/21/20 at 7:26 pm to Tigerfan56
quote:
Look, that’s great and I see how for some people that would be the best decision for them. It isn’t a one size fits all approach though.
Do you feel that pressure around your neck? That’s the feeling of debt grabbing you by the throat asking for money.
Posted on 12/21/20 at 7:30 pm to Mud_Till_May
quote:
Do you feel that pressure around your neck? That’s the feeling of debt grabbing you by the throat asking for money.
Nah. Feel pretty good because my money has been growing in the market. I could lose my job tomorrow, have the market crash 50% and sell off some stock to cover all my debt and be better off financially than I would be if I had paid my debt off years ago.
Posted on 12/21/20 at 7:36 pm to Tigerfan56
quote:
Nah. Feel pretty good because my money has been growing in the market. I could lose my job tomorrow, have the market crash 50% and sell off some stock to cover all my debt and be better off financially than I would be if I had paid my debt off years ago.
Not everyone has the same luck. However, everyone can follow my advise. To your point though, you would have to sell off assets to cover your debt. Because of this, your not as well off as you think you are.
This post was edited on 12/21/20 at 7:38 pm
Posted on 12/21/20 at 7:51 pm to Mud_Till_May
quote:
Not everyone has the same luck. However, everyone can follow my advise
I mean I clearly stated that there isn’t a one size fits all plan here, it’s all dependent on your risk tolerance and individual circumstances.
quote:
To your point though, you would have to sell off assets to cover your debt. Because of this, your not as well off as you think you are.
Yes in a doomsday scenario (market crash + unemployed for 6+ months), I’d have to sell assets to cover my debt payments. Assets that wouldn’t exist had I committed all my extra money to paying off low interest debt (2% and under) instead of investing.
I’m not claiming to be “very well off” but I am telling you my net worth is substantially higher for prioritizing investing over paying off debt. This is unarguable, the math more than proves it.
I’ll reiterate, it may not be for everyone, but the “pay all your debt now before doing anything else” likewise isn’t for everyone.
Posted on 12/21/20 at 7:57 pm to Tigerfan56
quote:
Yes in a doomsday scenario (market crash + unemployed for 6+ months), I’d have to sell assets to cover my debt payments. Assets that wouldn’t exist had I committed all my extra money to paying off low interest debt (2% and under) instead of investing. I’m not claiming to be “very well off” but I am telling you my net worth is substantially higher for prioritizing investing over paying off debt. This is unarguable, the math more than proves it. I’ll reiterate, it may not be for everyone, but the “pay all your debt now before doing anything else” likewise isn’t for everyone.
If your investment didn’t mature you’d be more in debt than you are now and singing a different song. You gambled and won. Most don’t and instead of just being in debt go into bankruptcy.
Congratulations on the return but I would say to you quit while your ahead. Sell, sell, sell. Better to pay the tax man now than the creditor later.
Posted on 12/21/20 at 8:01 pm to Tigerfan56
quote:
I mean I clearly stated that there isn’t a one size fits all plan here, it’s all dependent on your risk tolerance and individual circumstances.
I agree but I would only recommend going in debt to purchase appreciating assets.
Posted on 12/21/20 at 8:06 pm to Mud_Till_May
quote:
If your investment didn’t mature you’d be more in debt than you are now and singing a different song
More in debt than I am now - how do you figure this? I’m not advocating for going into debt just to go into debt or racking up CC debt.
Referring strictly to the OP’s financial picture, investing certainly could or could not make sense to him depending on other unknown circumstances. But he isn’t asking if he should pay off a 15% credit card - he’s asking about debt at 2.25% or less as well as a loan that may be forgiven altogether. That’s very similar to my situation where I had/have low interest debt - and investing rather than pay off is certainly a viable option.
How does one get more into debt here, unless you skipped debt payments altogether.
quote:
You gambled and won. Most don’t and instead of just being in debt go into bankruptcy. Congratulations on the return but I would say to you quit while your ahead. Sell, sell, sell. Better to pay the tax man now than the creditor later.
You can call it a gamble but history says otherwise. If the investing timeline is long enough, it’s practically impossible to lose money
Posted on 12/21/20 at 8:06 pm to Tigerfan56
quote:
risk tolerance
Just a question for you though, why should someone tolerate a risk to their money?
Posted on 12/21/20 at 8:07 pm to Mud_Till_May
quote:
Just a question for you though, why should someone tolerate a risk to their money?
For a return for their money.
Posted on 12/21/20 at 8:08 pm to Tigerfan56
quote:
worth is substantially higher for prioritizing investing over paying off debt. This is unarguable, the math more than proves it.
If your stock goes to zero, what does your debt to income ratio look like?
This post was edited on 12/21/20 at 8:09 pm
Posted on 12/21/20 at 8:11 pm to Tigerfan56
quote:
For a return for their money.
That’s not guaranteed? In other words, the dollars you once had are gone. You would never let someone steal from you, why risk stealing from yourself?
Posted on 12/21/20 at 8:13 pm to Tigerfan56
quote:
For a return for their money.
How much money have you made?
Posted on 12/21/20 at 8:13 pm to Mud_Till_May
quote:
If your stock goes to zero, what does your debt to income ratio look like?
If “my stock goes to zero”, everyone is fricked - wether you have debt or not
Posted on 12/21/20 at 8:16 pm to Mud_Till_May
quote:
How much money have you made?
I’ve made $40k in the market this year.
I’ve probably paid about $6k in interest between a mortgage, car note, student loans
Posted on 12/21/20 at 8:28 pm to Tigerfan56
quote:
If “my stock goes to zero”, everyone is fricked - wether you have debt or not
I'm not fricked. I have money in the bank?
Posted on 12/21/20 at 8:30 pm to Starchild
quote:
What’s actually wrong with the country is greed leading to nearly $2 trillion in student loan debt. No fricking reason it should be so outrageously expensive to go to college to better your future. Tuition rates increases are more than 5x overall inflation over past 40 years. Not to mention a lack of education at a much earlier level on interest and a variety of other financial matters.
No. What’s really wrong with this country is people like you making an obligation to something and then whining about said obligation and wanting it for free. Did someone force you to take a student loan? Could you have worked in college to help pay YOUR tuition? I did, and the sacrifices sucked at the time, but were well worth it now.
I HAD student debt too. Paid it off. I knew what I was doing and what I had to pay back. It’s called personal responsibility. Judging by your post I don’t expect you to understanding this concept.
Why do you think tuition rates have increased at this dramatic rate? Or do you actually think? Could it be because these schools realized there was a cash cow sitting in front of them in the form of easy to obtain student loans? Could that be any factor at all? Or did professor salaries increase at the same rate? They didn’t. This is a system that was created, and you signed on hook, line and sinker. Congratulations on being a fricking sucker, then whining about YOUR decision.
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