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Student loan debt-When do I start investing instead?

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    Student loan debt-When do I start investing instead?

    I've been maximizing my contribution to 401K with my employer, as they generously match 25% of it.

    All my extra money goes towards my student loans at the end of the month. I've been paying off the highest interest loans, which are at 6.55% interest.

    I have other loans at lower rates--one at 5%, one at 4.250%, and the rest ranging from 3.150% to 3.610%.

    I do have not any other debts, though I may incur them in the future, either through car / home / or starting a business (in order of decreasing likelihood).

    I've been aggressively paying off the 6.55% interest loans. They are almost all paid off. My next target would be the 5% loan.

    I think after the 5% loan, I'm uncertain if I should continue aggressively paying off the lower interest loans, or instead invest my money in actual investments, like stock and real estate, which could probably have returns higher than 4.250% regularly.

    Note I still have to make the minimum payments each month on my remaining loans regardless, but I've already halved this due to my aggressive repayment.

    I also already have a safety net of money that is roughly equivalent to ~3 months of paid work. Anything above that usually goes straight to my student loan debt.

    Any advice would be helpful; thank you.

    #2
    I've been maximizing my contribution to 401K with my employer,
    Unless you're putting it in cash or the bond market, you already are investing in stocks...

    as they generously match 25% of it.
    Typically, they match 25% of the first 6%. Is that how much you're contributing?

    All my extra money goes towards my student loans at the end of the month.
    Good.

    I've been paying off the highest interest loans, which are at 6.55% interest. ... I have other loans at lower rates--one at 5%, one at 4.250%, and the rest ranging from 3.150% to 3.610%.
    You don't mention how much the different loans are.

    like stock and real estate, which could probably have returns higher than 4.250% regularly.
    Because of two serious dips, the S&P500 has an average yield of only 2.125% annually in the past 16 years. There will certainly be more.

    (Because of those dips, average stock market yields can be gamed to show whatever you want it to be, just by picking a different starting year.)

    I'd start investing taxable income when all that's left are the 3.X% loans, but still paying them down at an accelerated -- but not frantic -- rate.

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      #3
      You should clear off your loans and then think of investing money.

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