School loans

[gambler2075]

I finally bit the bullet and made a payment for 100,000$ to my friend Sallie (as in, Mae) to pay off some of my med school loans. I was debating for a long time whether I really had to do this, but since my loans were 4% and 5% I decided it would be best to just bite the bullet and make that payment. It is a good feeling.

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[littleroc02us]

It may seem painful now, but when you have paid off all of your debt, you have freed up more income and you will sleep better at night.

[disneysteve]

Good job. Although the rates were fairly low, getting a guaranteed 5% return in today's market isn't such a bad idea. And now there is no risk of you putting that money into some investment that loses money.

I paid off my student loans a few years ago and it is great not having that weight on my shoulders any more. It has made it possible for me to give more, invest more and spend more that we could when the debt was active.

[gambler2075]

Originally Posted by disneysteve

Good job. Although the rates were fairly low, getting a guaranteed 5% return in today's market isn't such a bad idea. And now there is no risk of you putting that money into some investment that loses money.

I paid off my student loans a few years ago and it is great not having that weight on my shoulders any more. It has made it possible for me to give more, invest more and spend more that we could when the debt was active.

Thanks. Honestly, after reading "Black Swan" by Taleb I realized that absolutely nothing is guaranteed, and even if you have an excellent track record, a disaster could come out of nowhere and destroy you. So as hard as it was to take that money out, I had to do it.

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[gambler2075]

Originally Posted by gambler2075

Thanks. Honestly, after reading "Black Swan" by Taleb I realized that absolutely nothing is guaranteed, and even if you have an excellent track record, a disaster could come out of nowhere and destroy you. So as hard as it was to take that money out, I had to do it.

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Bit the bullet again and made a 53,000$ payment to SallieMae towards my med school loans. Now down to 50,000$ left from my expensive med school loans (started at 220K$+). There is nothing guaranteed in the stock market and I wanted remove the chance that I would lose that money back. Of course it is painful to take away capital that could potentially be used to make more money with, but, with stocks and my trading style, past performance is no guarantee of future results.

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[Frugal]

Congratulations. I too have student loan debt to pay off. Must be a good feeling to have most of it GONE! Whew! Think of all the money you can put towards other things now, and actually save for things you would like to have...

[Hector]

Congratulations!

[gambler2075]

Thanks, guys. It does make me feel good that I could take some of that money out of ETrade fantasy-land, as my brother calls it (lol) and use it to something that the stock market can never take away from me.

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[clintdavis]

Well done Gambler!

[gambler2075]

Thanks, guys... now let's see if I can stick with the courage of my contrarian stock convictions and hold my fundamental plays until they make me some money...

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[facebookdigg123]

dang 220k+ med school loans. not looking forward to that, assuming i can get into med school

[gambler2075]

Originally Posted by facebookdigg123

dang 220k+ med school loans. not looking forward to that, assuming i can get into med school

You know, if every time I got smashed at a frat party in college (instead of studying), someone would have said "3 years from now, this beer will be why you are going to have to go to an expensive private med school instead of a much cheaper state school... do you really want to drink this 500$ beer?" then I might have studied a bit more, and I wouldn't have 220K$ worth of loans to start with.

Oh well. Water under the bridge now.

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[khosta]

That is awesome!!!! Good for you!!! It will all pay off in the end!! The sooner the better!!!

[prosperity1]

student loans can be overwhelming over time

[gambler2075]

Paid off another 25K$ of my loans, now down to 25K$. Hoping to pay off the rest this year.

I looked at a couple of homes in SoCal and wow, have home prices gone up since I grew up there... Looking at 700K$ for the 4BR/2.5Ba/2600SF, new homes that I was looking at.

I've never bought a house before so all the terms were completely foreign to me. Looking at putting 300K$ down, max, which would apparently put the monthly payment at 3.5K$ for a 30year fixed at ~4.something percent.

Ugh, I need to read Home Mortgages for dummies or something

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[snafu]

Gambler: great going getting your loans paid down. I suggest you work with an experienced realtor in your selected community. Buying a home is truly market driven, only worth what a willing buyer and seller negotiate. Mortgages are negotiable, it takes some effort but because the the way amortization tables work, you will save yourself Big Bucks over the long term. Even if you are buying new construction, it's imperative to have a licensed home inspector review construction, plumbing, electrical, flashings, water table etc. the expensive parts that go wrong. Don't fret the small stuff like paint color or appliances that don't last as long as the mortgage.

[disneysteve]

Considering that in the past 8 months, you've paid off 180K worth of student loans, I don't think home ownership, even in California, is going to pose any major challenge for you. At that rate, you can pay off a 700K home in about 4 years.

[gambler2075]

Originally Posted by snafu

Gambler: great going getting your loans paid down. I suggest you work with an experienced realtor in your selected community. Buying a home is truly market driven, only worth what a willing buyer and seller negotiate. Mortgages are negotiable, it takes some effort but because the the way amortization tables work, you will save yourself Big Bucks over the long term. Even if you are buying new construction, it's imperative to have a licensed home inspector review construction, plumbing, electrical, flashings, water table etc. the expensive parts that go wrong. Don't fret the small stuff like paint color or appliances that don't last as long as the mortgage.

I think the thing that I'm worried about, is the housing market getting worse. I guess it's kind of like the feeling of buying a stock and watching it go down. But I have a lot to learn about the housing market, and it's probably at least six months before I buy the house. But thanks for the advice.

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PS: I'm typing this post using Dragon NaturallySpeaking, which I bought today. It's actually pretty amazing. And no I don't own stock in the company. LOL

[disneysteve]

Originally Posted by gambler2075

I think the thing that I'm worried about, is the housing market getting worse. I guess it's kind of like the feeling of buying a stock and watching it go down.

I think there is a huge difference between buying a house as your primary residence and buying a stock as an investment. One is bought with the hope of making a profit (the stock). The other is not (the house).

I've said it many, many times. Your home is not an investment. We bought our house in 1994. We paid what we felt was a fair and affordable price for us. After that, we didn't care what happened to the value of the home. If it went up a lot, we weren't going to sell it to realize the profit. If it went down, we weren't going to sell it to cut our losses.

Think of a house more like a car. I know when I buy a car that the value is going to decline year after year after year. I'm totally okay with that because I didn't buy the car to make money. I bought it for practical purposes. Same goes for a house. We need shelter. We want to be in control. We want to set down roots in our community and have a stable environment, not be moving around every couple of years. If, when we ultimately sell the house, we've made money, that will be a nice perk, but if not, that's okay too.

[dawnwes]

Well, count your blessings that housing costs have come down a bit. We sold our 1400 sq. ft. house on .16 of an acre with 2 bedrooms and 2 bathrooms for $600K in 2005 in Pasadena.

I am hearing that the same house we sold is now worth about $400K-$450K.

Dawn

Originally Posted by gambler2075

Paid off another 25K$ of my loans, now down to 25K$. Hoping to pay off the rest this year.

I looked at a couple of homes in SoCal and wow, have home prices gone up since I grew up there... Looking at 700K$ for the 4BR/2.5Ba/2600SF, new homes that I was looking at.

I've never bought a house before so all the terms were completely foreign to me. Looking at putting 300K$ down, max, which would apparently put the monthly payment at 3.5K$ for a 30year fixed at ~4.something percent.

Ugh, I need to read Home Mortgages for dummies or something

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