Page 300 of 418 FirstFirst ... 200250290298299300301302310350400 ... LastLast
Results 2,991 to 3,000 of 4172

Thread: The OT thread V1

  1. #2991
    Insider Unfated33's Avatar
    Join Date
    Jan 2013
    Location
    Charlotte, NC
    Posts
    795
    I skipped student loans on my undergrad degree but got them for my masters. Partly because I was able to get a stupidly low rate after incentives (1%), I've not been in a rush to pay off school loans except for during a period when investment returns weren't so great around '07 to '09. At any given time, applying extra cash to a car payment, credit card bill, or mortgage interest was always a better investment of my cash against negative interest.

    At my current pace, I'll pay off my final loan roughly a year before my oldest starts college.

  2. #2992
    Insider
    Join Date
    May 2012
    Posts
    1,182
    If you're properly invested then holding low interest debt isn't a bad thing - my father, whom I deeply respect, has refinanced my childhood house so many times that he essentially rents it against interest - which is tax deductible. Since the mortgage inception in 1989, he's outperformed the market, but even that annualized rate is 8.6%. So, the marginal return over that period is something like a factor of 10. (1000%).

    For comparison's sake, my wife's direct loans are at a relatively devastating 9.7% (can't refinance and get forgiveness).

    As long as you aren't fearful of catastrophic economic straits and average in your investments over time (instead of plunging in at a time like now where the Q ratio indicates we're overbought), I'd willingly hold debt at 4% or less if it allowed me to allocate more capital to passively managed funds.
    "So you've done this before?"
    "Oh, hell no. But I think it's gonna work."

  3. #2993
    Insider Unfated33's Avatar
    Join Date
    Jan 2013
    Location
    Charlotte, NC
    Posts
    795
    Right, you've done a great job of explaining to the group what is essentially my practice and my rationale. The amount I could contribute to my own student loan and the amounts I contribute to my oldest two daughters 529 funds are essentially the same. On one, I'm paying an additional 1% interest for the year. On the other(s), I'm gaining approx 12% per year. Some of my other investments would make this look more lopsided, but I think keeping it to a school costs vs. school costs helps give a good example to the reader.

    In the specifics of your wife's loan forgiveness, if you don't mind sharing, does she have to pay them back for a period before forgiveness happens? Here in NC, a friend of ours works in the health industry, but she has to make payments every month for 10 years before they will forgive the principal. I've not asked her what her principal is, but that sounds painful even with forgiveness factored in.

  4. #2994
    Insider
    Join Date
    May 2012
    Posts
    1,182
    It's 10 years of qualifying payments while in public service. 15% of adjusted gross income is qualifying. My wife is a specialist (neonatologist) so only began earning a real salary after 7 years of qualifying payments as a resident or fellow.

    The game now creates an incentive for her to show as little income as possible before forgiveness. So, maxing all pre tax accounts and taking maximal unpaid maternity leave are marginally beneficial.

  5. #2995
    Quote Originally Posted by Lurker27 View Post
    As long as you aren't fearful of catastrophic economic straits
    this is the notion that i think guides a lot of millennial. we watched it crash. i tried to get a job in early 2009 when i graduated college. get wrecked.

    this experience pushed my already conservative personal financial outlook even farther. it might not be the most profitable long term investment strategy, but minimizing debt also minimizes liability. before i went road racing i had my life down to 1000 dollars a month required to live. it would be a shitty life, but i'd loose nothing, including the cars and the house. id like to get back to that point, im closer to 1500 dollars a month right now. there is a freedom of mind knowing that if everything shits the bed, you'll be fine. and no, investments do not have that kind of safety, as we all know.

    we know we can't count on unemployment, we know we can't count on anyone else to help, we watched lives destroyed and the economy implode because of the boomers reckless debt habits. and we know how much we can trust boomers to take care of of people .... lol, get fucked.

    this notion guides a lot of people my age. almost everyone i know my age just pays off debt. contrary to the popular notion that millennials want it all and dont know how much things cost, the exact opposite is true in my experience. we learned through fire what debt will do to a person, and what it will do to an economy when the house of cards comes down. we dont want anything to do with that shit.

    minimize liability, maximize flexible spending, and buy experiences, not objects. pretty much my financial strategy.
    social conservatism: the mortal fear that someone, somewhere, might be having fun.

  6. #2996
    Insider
    Join Date
    May 2012
    Posts
    1,182
    Gordon, the problem with that logic is that 2008 happened, and our corporate overlords shrugged it off. You're an economic liberal, you should know that these dudes are evil and greedy as hell. They're like Jason, or Dracula, or the Terminator - they're not going down easy. They've got more to do with how we got Trump than Russia did, and I'm a truther on that one. Shit, if you believe jobs are going away, you can invest heavily in automation ETFs, there's still plenty of time.

    Example:
    I got my first job about 3 days before Bear Stearns went under. Let's say I got a big present for graduating college in 2008, say, the value of my college fund that I didn't need because I had a full ride. If I plunged it in at the worst possible time (right when I graduated), that $50k would have returned me just under $90k (became 140k) using the shittiest possible investment strategy. And, this is the broadest possible strategy - literally buying the entire industrial market, at the shittiest time, and reinvesting dividends, which most services do automatically (I use Fidelity). Passively invested funds are doing even better.

    You can be bitter all you want but don't be shitty at money, you're too smart for that. At the very least maximize every dollar you can into your 401k and Roth IRA every year. 401ks are incredibly liquid in the United States, and assuming your salary is comparable to mine (as we hold similar positions at similar companies) you don't need the excess. I mean, shit, my expenses all told are over 4 times yours (for 3 people, but still). At your salary and rate of spend there's really no excuse for not having fuck-you money before you are 40.

    You can buy a shitload more experiences that way. And when you decide you want a track toy that can decimate all, you won't even have to blink.
    "So you've done this before?"
    "Oh, hell no. But I think it's gonna work."

  7. #2997
    Quote Originally Posted by Lurker27 View Post
    Gordon, the problem with that logic is that 2008 happened, and our corporate overlords shrugged it off. You're an economic liberal, you should know that these dudes are evil and greedy as hell. They're like Jason, or Dracula, or the Terminator - they're not going down easy. They've got more to do with how we got Trump than Russia did, and I'm a truther on that one. Shit, if you believe jobs are going away, you can invest heavily in automation ETFs, there's still plenty of time.

    Example:
    I got my first job about 3 days before Bear Stearns went under. Let's say I got a big present for graduating college in 2008, say, the value of my college fund that I didn't need because I had a full ride. If I plunged it in at the worst possible time (right when I graduated), that $50k would have returned me just under $90k (became 140k) using the shittiest possible investment strategy. And, this is the broadest possible strategy - literally buying the entire industrial market, at the shittiest time, and reinvesting dividends, which most services do automatically (I use Fidelity). Passively invested funds are doing even better.

    You can be bitter all you want but don't be shitty at money, you're too smart for that. At the very least maximize every dollar you can into your 401k and Roth IRA every year. 401ks are incredibly liquid in the United States, and assuming your salary is comparable to mine (as we hold similar positions at similar companies) you don't need the excess. I mean, shit, my expenses all told are over 4 times yours (for 3 people, but still). At your salary and rate of spend there's really no excuse for not having fuck-you money before you are 40.

    You can buy a shitload more experiences that way. And when you decide you want a track toy that can decimate all, you won't even have to blink.
    oh no, i have lots of investments. i just prioritize paying off debt over everything else. i think most millennials do the same, at least in my circle we do.

    i mean thats pretty much what i did to finance road racing. i just decided to do it one day, and started buying shit. 20 grand later ...

    living under your means is exactly what gives you fuck you money.
    Last edited by cockerpunk; 03-07-2018 at 01:58 PM.
    social conservatism: the mortal fear that someone, somewhere, might be having fun.

  8. #2998
    Insider
    Join Date
    May 2012
    Posts
    1,182
    Ah, my apologies - you're not willing to maintain debt even assuming a greater return can be had for the same capital. I don't agree with your stance but I don't find that to be the financial malpractice I was accusing you of. My apologies.
    "So you've done this before?"
    "Oh, hell no. But I think it's gonna work."

  9. #2999
    Quote Originally Posted by Lurker27 View Post
    Ah, my apologies - you're not willing to maintain debt even assuming a greater return can be had for the same capital. I don't agree with your stance but I don't find that to be the financial malpractice I was accusing you of. My apologies.
    yup exactly. i understand that mathematically, if i get 15% on some investment, versus paying off a debt at 8%, that i should mathematically choose to invest. however, from a liability standpoint, not having the debt in the first place is much better for my stress, sanity, and life. of course this isn't a hard and fast rule, for example, mortgages versus car payments. and its no coincidence i paid the student loans off last of all my debt, because i can defer them if i was laid off etc.

    really though, the whole thing is about living under your means. living under your means means you stay out of debt, maximize investment income, maximize spending money etc etc. live small, live cheap, live well.
    Last edited by cockerpunk; 03-07-2018 at 02:12 PM.
    social conservatism: the mortal fear that someone, somewhere, might be having fun.

  10. #3000
    Insider
    Join Date
    Apr 2012
    Posts
    323
    I wish my wife would separate that emotion from the math... our CC debt from fixing up our house has dwarfed the student loan debt but she?s freaked out about the loans...

    I lost my 401k in the crash, had to cash it out to survive (pay off car, debts at the time) In hindsight it was a shitty move that?s set me back incalculably in the long run. (Read: I don?t want to know...)

    This year I?ll be maxing a Roth IRA, and the college savings fund for my kid as we focus on paying off the remainder of our debts.

    Oh, in the 4 years we?ve had this house, we?re like 5 years ahead on the mortgage just by paying a little extra against the principal each month. 21 years to go...

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •