On the whole paying debt slowly versus investing, I think you are far, far better off paying that debt as quickly as you can. If you are going to invest, you have to take into so many variables working in your favor --- namely that the stock market will do well, that you will have the same job making the same or even better money, and that you will have the discipline to keep investing the money instead of spending it. None of those variables are even close to being guaranteed. Yes, the market does well historically, but there is simply no definite formula that what you are investing in is going to produce the returns you need. And what if you lose your job or some unforeseen circumstance comes up? Just paying your debt off and being done with it is the safer choice.As for the post about just living a frugal lifestyle, I completely agree. Too many people live beyond their means. But there is a major difference between $50K in student loan debt and $150K in student loan debt. And some people taking out the $150K might be doing so foolishly, or without thinking through all of the financial implications.
In response....I guess I take it as a given that you should have at least 3 and more likely 6 months of emergency savings. I suppose some people don't have that, but you are truly one moment away from a financial disaster. And having that emergency savings would work in the hypothetical you bring up -- I'd much rather have all of my loans paid off and 6 months in emergency savings than have $50K left, no job, some money invested, and emergency savings. If you have a hard time finding a new job, not having $1500K a month in loan payments is going to make a major difference in your monthly budget. You will be able to survive a lot longer. But I guess you have to put away enough for the emergency savings first. I agree too about the points on having zero consumer credit card and contributing to a 401 (K). These are all very important things that we should all be doing.
Again, if you want to pay off your debt as fast as possible that's great. But I think there are at least 3 areas that should clearly be prioritized over student loans payments. They are: paying off credit card debt, paying the maximum that your employer will match in a 401K, and setting aside a 3 month safety net in an easily accessible account (high interest saving or money market fund).
Obviously there are no guarantees concerning our decisions in life. However, statistics are incredibly useful in helping us make fairly accurate predictions about the future. We can use statistics to help us shape our decisions with a reasonable amount of accuracy, while also gleaning a very good sense of how inaccurate those predictions are. If you don't agree that you can make sound financial decisions based on statistics and financial theory, I can not fathom how you make your financial decisions. The use of financial leverage and portfolio diversification is part of what makes the economy go 'round. Accepting those premises does not entail the endorsement of imprudent/lavish spending or poor debt managment. I certainly do NOT agree that it is 'sophistry' to believe that you can use the tools of statistics, investment theory, prudent budgeting, and wise debt management to justify forgoing immediate debt retirement in lieu of greater growth of personal wealth.
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