Investing megathread extravaganza

[DaFace]

A place to talk about investing stuff.

[Buehler445]

Originally Posted by O.city

Well guys, could use a little help or advice here.

The wife and I are doing well, bought some land getting ready to build a home. I max out an ira for both of us each year. But I’m not sure if I should be doing more or putting as much as I can towards my student loans. I started with 300k at about 7 % 4 years ago and I’ve taken down 50k or so of it total but the interest is killer. I’m getting ready to join the national guard as a dentist and get some help there with the loans so I think that plus what I pay, I can get the student loans done in about 3.5 years.

So, question is would you max out and get out from under those first or try and put more into a brokerage account?

The pure economic answer is if your IRA return > 7%, leave it in your IRA.

However, you have to account for cash flow, and if the payments tough to make, it makes sense to back off your Roth some.

[O.city]

Originally Posted by Buehler445

The pure economic answer is if your IRA return > 7%, leave it in your IRA.

However, you have to account for cash flow, and if the payments tough to make, it makes sense to back off your Roth some.

I can make the payment I’m just curious if I should not put into retirement until I get the loan payed off

[Unsmooth-Moment]

2900 a month? Good god.

I make pretty good money and my wife doesn’t work, but mortgage, car payment and 2 kids would make that unbearable. My mortgage and car payment are 2100 a month. I could get a crappy lake house in there for the cost of those student loans. That bubble has to burst at some point.


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[O.city]

Originally Posted by Unsmooth-Moment

2900 a month? Good god.

I make pretty good money and my wife doesn’t work, but mortgage, car payment and 2 kids would make that unbearable. My mortgage and car payment are 2100 a month. I could get a crappy lake house in there for the cost of those student loans. That bubble has to burst at some point.


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It’s not fun. I love what I do but if I had to do it over again, I’m not sure it’s worth it. It’s crazy.

Luckily for us the wife does pretty well but it’s still notcool

[ghak99]

Originally Posted by O.city

It’s not fun. I love what I do but if I had to do it over again, I’m not sure it’s worth it. It’s crazy.

Luckily for us the wife does pretty well but it’s still notcool

Is the 7% fixed?

If so, I'd invest and let the guards thing get rolling. If not, I'd be trying to knock a chunk of it off in case of an increase.

I wanted to know how you talked yourself into accepting that debt. Wasn't dentistry, but I bowed out and settled for bach because I wasn't willing to accept the huge debt load of continuing eduction and then the cost of buying into an established practice on top of it. Over a decade later and I still don't know if I made the right decision.

[Buehler445]

Originally Posted by ghak99

Is the 7% fixed?

If so, I'd invest and let the guards thing get rolling. If not, I'd be trying to knock a chunk of it off in case of an increase.

I wanted to know how you talked yourself into accepting that debt. Wasn't dentistry, but I bowed out and settled for bach because I wasn't willing to accept the huge debt load of continuing eduction and then the cost of buying into an established practice on top of it. Over a decade later and I still don't know if I made the right decision.

Very good point.

[O.city]

It is fixed on some of the loans and not on some.

If I wanted to be a dentist, I didn’t really have much other options s than take the loans. I graduated and bought a practice right out of school which was scary but I’m a year away from having the practice paid off.

Once I can pay off the student loans and the office, it should free up about 6500 per month to really start doing some things with

[Buehler445]

Originally Posted by O.city

It is fixed on some of the loans and not on some.

If I wanted to be a dentist, I didn’t really have much other options s than take the loans. I graduated and bought a practice right out of school which was scary but I’m a year away from having the practice paid off.

Once I can pay off the student loans and the office, it should free up about 6500 per month to really start doing some things with

I'd plow pretty hard into the variable rate loans.

[O.city]

Dentistry is a great field, don’t get me wrong. It has its faults And isn’t the ideal job as it was for the older dentists here who got out 30 years ago, but still a good gig.

If all goes well, I should be debt free (outside of a mortgage for the house) at 34.

So I’m hopeful. It hasn’t and won’t be easy but it is what it is

[ghak99]

Originally Posted by Buehler445

I'd plow pretty hard into the variable rate loans.

Absolutely.

I'd be attacking the potential interest risk as much as possible.

[Rain Man]

Originally Posted by O.city

I can make the payment I’m just curious if I should not put into retirement until I get the loan payed off

Can you deduct the loan interest costs on your taxes?

Assuming you can't get your loan interest down, your loan payments are the equivalent of a guaranteed 7% return. If you can deduct the payment, then they're kind of a guaranteed 10% return.

Paying into an IRA has the same tax benefit, so if the loan interest is deductible then you have to beat a 7%return, recognizing that it's a guaranteed return. That's probably a breakeven proposition to do over a period of years, and I'd rather eliminate debt. If the loan interest is not deductible, then you just need to beat roughly a 4% guaranteed return on the IRA (7% - tax deduction), which is easy to do in the long term.

Did I do the math right there? Someone double check.

[Buehler445]

Originally Posted by Rain Man

Can you deduct the loan interest costs on your taxes?

Assuming you can't get your loan interest down, your loan payments are the equivalent of a guaranteed 7% return. If you can deduct the payment, then they're kind of a guaranteed 10% return.

Paying into an IRA has the same tax benefit, so if the loan interest is deductible then you have to beat a 7%return, recognizing that it's a guaranteed return. That's probably a breakeven proposition to do over a period of years, and I'd rather eliminate debt. If the loan interest is not deductible, then you just need to beat roughly a 4% guaranteed return on the IRA (7% - tax deduction), which is easy to do in the long term.

Did I do the math right there? Someone double check.

The Deduction didn’t go away in the new tax bill but I’d have to look up what the phaseout rules are. He may make too much money.

[O.city]

I could deduct the interest but I’m not sure on the new tax bill

[Buehler445]

Originally Posted by O.city

I could deduct the interest but I’m not sure on the new tax bill

I don’t think it changed.

[O.city]

Originally Posted by Buehler445

I don’t think it changed.

Psychologically, I just hate having that over my head. I work my ass off and it’s just a mental drain to think I’m set up to pay that shit until I’m 46.

I just wanna get out from under it. I’ll deal with retirement later. It may not be the best way to go about it but it just wears on me