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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?
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To echo a lot of what's been said, it's all about weighing the opportunity cost of investing vs the fixed cost of 7% interest. You can improve that through deductions, so say paying that down is effectively a 10% return for doing so.
In the coming 12-18 months I foresee market returns exceeding 10%, so it would be economically smarter to be investing over that period, and revisit your strategy afterwards.
Obviously, the emotional aspect of paying off debt is difficult to quantify. But from a numbers perspective it makes more sense to invest right now.
But ultimately, it's whatever helps you sleep at night.