Author Topic: Law school loans gone!  (Read 3645 times)

Suit

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Law school loans gone!
« on: April 18, 2018, 09:31:34 AM »
I wanted to post to celebrate being done with them (!!!!) and also lay out how I did it.

I graduated law school in May 2011 and just shy of 6 years later I'm done with my loans. I graduated with around $127k (all federal at 6.8% or higher) and got a public service job. I was planning on doing PSLF so I made minimum payments or close to it for 4 years. I found MMM about 1 year after graduating and increased what I was saving and investing all while making minimum loans payments. 4 years into my public job I was becoming increasingly unhappy and experiencing stress related health issues. I decided to pay down my loans so I wouldn't feel trapped by limiting a potential job search to other public jobs. At that point my loans were around $134k. 

I sold off $70k in taxable stock and threw it at the loans. Then I refinanced with Earnest and set my loan payoff at 5 years so I could get 3.5% interest. Then I just kept throwing every extra dollar at the loans. All the while I kept living simply in the big aspects of life. I still live in the same studio apartment and drive the same 1995 vehicle. I also wound up switching jobs about 6 months ago for a pay cut and better quality of life and I wouldn't have done it without having paid down my loans. I just paid off my loans yesterday and used my emergency fund to pay them down to 0. Now it's all uphill!! 

A big thank you to all the MMM community, I wouldn't be debt free right now without you all.

lexde

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Re: Law school loans gone!
« Reply #1 on: April 18, 2018, 09:34:39 AM »
Congrats! If you don’t mind sharing, what were you earning at your initial job out of law school and what did you end up making when you started killing that debt? No matter what, it was awesome progress. Are you enjoying your new field of law more?

Congrats on not giving in to the golden handcuffs. Keep rocking the ‘95 car and you’ll be retired before you know it. :-)

Suit

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Re: Law school loans gone!
« Reply #2 on: April 18, 2018, 09:47:31 AM »
Thanks! When I started at that job I was earning $67k a year and I don't remember what I was making when I started killing the debt off, maybe around $80-85k, but I know that the last year that I worked there I earned $100k.

I'm enjoying the perks and work-life balance at the new job more. The area of law is less exciting and I'm still figuring it out since I'm only 6 months in so I'll reserve judgment on whether I actually "like" the particular field more.

tralfamadorian

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Re: Law school loans gone!
« Reply #3 on: April 18, 2018, 01:00:32 PM »
Congratulations!

dude

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Re: Law school loans gone!
« Reply #4 on: April 19, 2018, 11:35:05 AM »
Suit, that's amazing!  Congrats!

I just paid off my law school loans last week, after 20 years of paying them!! But I had some good fortune along the way -- of the $80k in law school loans I had, $7.5k were Perkins loans.  Got those forgiven after 5 years in public service.  Then got selected for the Attorney Student Loan Repayment Program for two consecutive 3-year stints (6 years total) during which time my gov't employer paid roughly $14k toward my loans. The last decade, my interest rate was 2.33% or lower, so I had no incentive to pay them off. Last week, with rates now at 3.28% and likely to reset higher on July 1, I decided to liquidate some GNMA Fund holdings and paid off the remaining $8,132.  Feels really good to never have to make that payment again after 20 years of doing so!

BuildingmyFIRE

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Re: Law school loans gone!
« Reply #5 on: April 19, 2018, 02:03:56 PM »
Congratulations!!  You must feel amazing.  There is no dollar amount that will quantify what it feels like to be relieved of debt.

I am under $10K (started with somewhere north of $160K in law school debt 11 years ago) and I am fighting myself not to use emergency funds just to get rid of it.  I can't wait to do a similar post!  :)

lexde

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Re: Law school loans gone!
« Reply #6 on: April 19, 2018, 02:09:54 PM »
How does it feel to be debt free now? :-)

Suit

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Re: Law school loans gone!
« Reply #7 on: April 19, 2018, 08:56:02 PM »
@dude  Congrats to you! After 20 years I bet it feels great to have it gone.

@BuildingmyFIRE It does feel great! You're so close!!!! I did dump my emergency fund in to pay mine off but you'll be done soon.

@lexde It feels great but it'll feel really great next month when I realize that my $1185 payment is gone and that money is ALL MINE from now on!!! :)

abpa

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Re: Law school loans gone!
« Reply #8 on: April 20, 2018, 03:43:29 PM »
That is wonderful!  I remember the absolute relief when I paid off my PA school loans and the feeling of freedom (I was especially happy to tell my medical director to kiss my ass on my way out the door - OK, I didn't say it but I thought it really loud).  I spent 4 years in a medically underserved area, which I loved, working for a typically poorly run non-profit.

Good job on the pay off.  Go indulge in the beverage of your choice!

Suit

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Re: Law school loans gone!
« Reply #9 on: April 20, 2018, 03:45:30 PM »
@abpa Thanks! Beat you to it, I already had a mini bottle of sparkling wine to celebrate! (Not a huge fan of champagne)

kewper

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Re: Law school loans gone!
« Reply #10 on: April 20, 2018, 06:02:12 PM »
Congratulations!! 

I paid off ~$170K in law school loans in late 2016.  I graduated in 2010 and was in big law for 3 years and now make much less, it was a huge accomplishment for my family. Now, i don't HAVE to be a lawyer any more!

Clean Shaven

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Re: Law school loans gone!
« Reply #11 on: April 20, 2018, 07:15:38 PM »
Congratulations! Getting that albatross off your back is a great feeling.

Bracken_Joy

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Re: Law school loans gone!
« Reply #12 on: April 20, 2018, 07:23:46 PM »
Wooooo go Suit! That is awesome!

lexde

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Re: Law school loans gone!
« Reply #13 on: April 21, 2018, 09:34:37 AM »
@lexde It feels great but it'll feel really great next month when I realize that my $1185 payment is gone and that money is ALL MINE from now on!!! :)
Yes!! :-D That's what it's all about! Go YOU!!

SpareChange

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Re: Law school loans gone!
« Reply #14 on: April 21, 2018, 11:15:09 AM »
I know it's a wonderful feeling paying that shit off. Congrats.

Suit

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Re: Law school loans gone!
« Reply #15 on: April 21, 2018, 06:44:32 PM »
@kewper Congrats to you too! Paying off that much in 6 years is great! I have the same feeling, I wanted to at least practice law as long as I was paying for the school. I still will practice for a while but it doesn't feel like I have to now :)

@Clean Shaven Thanks! It does feel great.

@Bracken_Joy THANK YOU!! Sorry I won't be able to see you all tomorrow to share the news in person!

@lexde Thanks!

@SpareChange  Thanks! It does feel great!



tomsang

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Re: Law school loans gone!
« Reply #16 on: April 21, 2018, 06:49:43 PM »

I sold off $70k in taxable stock and threw it at the loans.

I hate to see this, hopefully it did not set you back too much.

Suit

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Re: Law school loans gone!
« Reply #17 on: April 22, 2018, 11:08:52 AM »
@tomsang I would've obviously liked to keep that money invested but it was worth more to me to pay down my (at that time) 6.8% debt. The freedom from debt is worth way more to me than the 70k invested because now I don't have to worry about being tied to a high paying job just to make my payments.

BuildingmyFIRE

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Re: Law school loans gone!
« Reply #18 on: April 22, 2018, 01:33:53 PM »
@tomsang I would've obviously liked to keep that money invested but it was worth more to me to pay down my (at that time) 6.8% debt. The freedom from debt is worth way more to me than the 70k invested because now I don't have to worry about being tied to a high paying job just to make my payments.

This!  Now you "own" your own brain and career you can choose to do what you want with them!

tomsang

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Re: Law school loans gone!
« Reply #19 on: April 22, 2018, 06:01:03 PM »
@tomsang I would've obviously liked to keep that money invested but it was worth more to me to pay down my (at that time) 6.8% debt. The freedom from debt is worth way more to me than the 70k invested because now I don't have to worry about being tied to a high paying job just to make my payments.

How does paying off your loans allow you to not worry about your job?  At any point you could have used the $70k or more likely the $100k+(after appreciation) in investments to make payments. You locked in a tax loss, loss of future gains, and became significantly less liquid for emotional reasons vs an optimal solution.

Clean Shaven

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Re: Law school loans gone!
« Reply #20 on: April 22, 2018, 06:37:06 PM »


@tomsang I would've obviously liked to keep that money invested but it was worth more to me to pay down my (at that time) 6.8% debt. The freedom from debt is worth way more to me than the 70k invested because now I don't have to worry about being tied to a high paying job just to make my payments.

How does paying off your loans allow you to not worry about your job?  At any point you could have used the $70k or more likely the $100k+(after appreciation) in investments to make payments. You locked in a tax loss, loss of future gains, and became significantly less liquid for emotional reasons vs an optimal solution.

Because he doesn't have any loans anymore. And it was a guaranteed 6.8% return by paying them off.

You may have decided to do something different in his shoes. That doesn't make your choice the only right one.

Suit

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Re: Law school loans gone!
« Reply #21 on: April 22, 2018, 07:01:58 PM »
@BuildingmyFIRE Exactly!

@tomsang Returns in the stock market are by no means guaranteed and the returns on paying down my loan were guaranteed. Paying off my loans means that now I don't have to worry about maintaining a job that pays enough to also cover my monthly payments to my student loans. Sure, I could have 100k or so in taxable accounts right now and 70k in student loans, but I made the choice to exchange money for freedom. I do fully acknowledge that there was emotion at play when paying off my loans after refinancing down to 3.5%. What it boils down to for me is that I used my money to make me happier and more free and for me that is the purpose of MMM. You can make different choices and that is ok too.

@Clean Shaven I agree with you! (Also, I'm a woman. I don't say that to be harsh, I just point it out because it seems that the word "Suit" is more often associated to being a man than a woman and seems to me like it shouldn't be)

monstermonster

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Re: Law school loans gone!
« Reply #22 on: April 22, 2018, 07:04:50 PM »
I am so proud of you!!!

Clean Shaven

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Re: Law school loans gone!
« Reply #23 on: April 22, 2018, 07:14:54 PM »
@BuildingmyFIRE Exactly!

@tomsang Returns in the stock market are by no means guaranteed and the returns on paying down my loan were guaranteed. Paying off my loans means that now I don't have to worry about maintaining a job that pays enough to also cover my monthly payments to my student loans. Sure, I could have 100k or so in taxable accounts right now and 70k in student loans, but I made the choice to exchange money for freedom. I do fully acknowledge that there was emotion at play when paying off my loans after refinancing down to 3.5%. What it boils down to for me is that I used my money to make me happier and more free and for me that is the purpose of MMM. You can make different choices and that is ok too.

@Clean Shaven I agree with you! (Also, I'm a woman. I don't say that to be harsh, I just point it out because it seems that the word "Suit" is more often associated to being a man than a woman and seems to me like it shouldn't be)
Oops - my apologies for the gender assumption.

tomsang

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Re: Law school loans gone!
« Reply #24 on: April 22, 2018, 09:04:40 PM »
@tomsang Returns in the stock market are by no means guaranteed and the returns on paying down my loan were guaranteed. Paying off my loans means that now I don't have to worry about maintaining a job that pays enough to also cover my monthly payments to my student loans. Sure, I could have 100k or so in taxable accounts right now and 70k in student loans, but I made the choice to exchange money for freedom. I do fully acknowledge that there was emotion at play when paying off my loans after refinancing down to 3.5%. What it boils down to for me is that I used my money to make me happier and more free and for me that is the purpose of MMM. You can make different choices and that is ok too.

That is my point.  Liquidating investments and paying taxes on the gain to pay off a 3.5% student loan is not providing you freedom.  It is actually pushing back your FI date and your freedom.  Emotion created a situation, where you did something that hurt your quest for FI.  By liquidating your investments to pay off a 3.5% loan, you created more risk by not having the liquidity to take care of a job loss, an emergency, or an opportunity.  You gave up all of this to pay down a 3.5% loan.  It is not the end of the world, but I would not consider it Mustachian.  As you said, we all make choices.  Some of us buy big SUVs, eat out everyday, have too big of a house, etc.  That is not Mustachian, but we all make choices that effect our quest for FI.  Our questions to become better Mustachians leads us to make less emotional decisions and more long term decisions.  Going out for dinner for some provides an emotional positive response.  If you can change your mindset, where buying the ingredients and making an amazing dinner, while saving the dollars brings happiness, then you are striving to be Mustachian.  I believe that you made a decision that made you emotionally happier.  Through education, modeling, and logic we could create emotional happiness by making long term financially beneficial decisions vs. short term emotional decisions.

Suit

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Re: Law school loans gone!
« Reply #25 on: April 22, 2018, 09:59:48 PM »
@monstermonster THANK YOU!!!

@Clean Shaven No worries!

@tomsang I understand your point. I made a different decision than you would have and I'm ok with that.

monstermonster

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Re: Law school loans gone!
« Reply #26 on: April 23, 2018, 03:35:48 PM »
Anyone in this thread who paid off their loans and is interested in coming on my syndicated radio show/podcast (focused on millennial personal finance), I am always DELIGHTED to host people talking about their story. Just PM me please!

BuildingmyFIRE

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Re: Law school loans gone!
« Reply #27 on: April 24, 2018, 02:00:54 PM »
Anyone in this thread who paid off their loans and is interested in coming on my syndicated radio show/podcast (focused on millennial personal finance), I am always DELIGHTED to host people talking about their story. Just PM me please!

Do you have as a subject of your podcast different ways to politely tell your alma mater EVERY TIME THEY CALL DURING DINNER OR 8PM ON A SUNDAY that you won't be giving them any money right now because you're still trying to pay off your student loans and also um because you're trying to save for your children's college education which will likely be half a million dollars to attend a four year private school by the time they graduate and still have two nickels to rub together at retirement?? :)  I bet you could fill a whole hour on that subject. 

monstermonster

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Re: Law school loans gone!
« Reply #28 on: April 24, 2018, 08:02:54 PM »
Anyone in this thread who paid off their loans and is interested in coming on my syndicated radio show/podcast (focused on millennial personal finance), I am always DELIGHTED to host people talking about their story. Just PM me please!

Do you have as a subject of your podcast different ways to politely tell your alma mater EVERY TIME THEY CALL DURING DINNER OR 8PM ON A SUNDAY that you won't be giving them any money right now because you're still trying to pay off your student loans
OMG I just five minutes ago told the nice student at my alma mater to take me off their list as they've been calling daily for 2 weeks. I DONATE OKAY EVERY YEAR STOP CALLING.


dude

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Re: Law school loans gone!
« Reply #29 on: April 25, 2018, 08:05:27 AM »
Returns in the stock market are by no means guaranteed and the returns on paying down my loan were guaranteed. Paying off my loans means that now I don't have to worry about maintaining a job that pays enough to also cover my monthly payments to my student loans. Sure, I could have 100k or so in taxable accounts right now and 70k in student loans, but I made the choice to exchange money for freedom. I do fully acknowledge that there was emotion at play when paying off my loans after refinancing down to 3.5%. What it boils down to for me is that I used my money to make me happier and more free and for me that is the purpose of MMM. You can make different choices and that is ok too.

Exactly.  Dave Ramsey (who I don't follow, but know about) uses the "snowball" approach to paying off debts, which is paying off the lowest balances first, regardless of interest rate, to notch small "victories" as one works up to paying the larger debts. And it works -- for a LOT of people. I personally wouldn't take that approach, but the point is, psychology is a huge factor in these decisions, and often what might seem like the "optimal" choice ignores basic human psychology. So better to use an approach that actually works for the specific individual than the "better" route that might not. The same argument gets hashed out in the "pay off mortgage vs. not paying it off" debate all the time.

Suit, it sounds like paying those things off, no matter the method, lifted a large albatross off your neck that has left you feeling much more optimistic about the future. You can't put a price on that kind of peace of mind.

tomsang

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Re: Law school loans gone!
« Reply #30 on: April 25, 2018, 10:58:23 PM »
Returns in the stock market are by no means guaranteed and the returns on paying down my loan were guaranteed. Paying off my loans means that now I don't have to worry about maintaining a job that pays enough to also cover my monthly payments to my student loans. Sure, I could have 100k or so in taxable accounts right now and 70k in student loans, but I made the choice to exchange money for freedom. I do fully acknowledge that there was emotion at play when paying off my loans after refinancing down to 3.5%. What it boils down to for me is that I used my money to make me happier and more free and for me that is the purpose of MMM. You can make different choices and that is ok too.

Exactly.  Dave Ramsey (who I don't follow, but know about) uses the "snowball" approach to paying off debts, which is paying off the lowest balances first, regardless of interest rate, to notch small "victories" as one works up to paying the larger debts. And it works -- for a LOT of people. I personally wouldn't take that approach, but the point is, psychology is a huge factor in these decisions, and often what might seem like the "optimal" choice ignores basic human psychology. So better to use an approach that actually works for the specific individual than the "better" route that might not. The same argument gets hashed out in the "pay off mortgage vs. not paying it off" debate all the time.

Suit, it sounds like paying those things off, no matter the method, lifted a large albatross off your neck that has left you feeling much more optimistic about the future. You can't put a price on that kind of peace of mind.

I don't disagree that emotions are a large part in all of our lives.  Part of being a Mustachian is to remove the emotions and do the correct thing.  Emotions are excuses.  As you mentioned the same argument is used in the payoff the mortgage or invest argument.  The math shows that you should not liquidate assets to pay off your sub 4% 30 year fixed rate mortgage.  Yet people do it on this board and celebrate it as a victory. Those people are hurting their quest to FI.  We give them a pass because they are not blowing it on SUV's, trips around the world, drugs, etc.  Then others see that hurting your balance sheet is celebrated, and they jump on the bandwagon of doing something that is not positive for their long term financial quest.  I am good with people doing what they want, but I think part of this community is educated people on the pros and the cons. 

Lots of people think of debt as terrible thing, where I believe debt is a tool to get something that you want.  If you are buying future cash flows at a bargain rate, then debt is great.  If you are running it up on 18% credits cards to buy a fishing boat than not so much.

I hear people saying that smoking calms their nerves, that eating fast food helps them deal with stress, driving a Hummer makes them feel safe, that liquidating a 3.5% loan with their stock portfolio makes them feel good.  I think most on this board would give lots of arguments on why those are bad decisions on 3 out of 4 of those concepts.

For the most part, people who pay off their low rate fixed rate mortgages, start off with, "I know it is not optimal to do this, but I am going to do it because...."  I don't think many would tell someone who is stressed to light up cigarette to help their nerves.  Yet we do give a person a pass for liquidating investments or deferring investing to pay off low interest rate mortgages or student loans.

I think by educating people on the pros/cons of these types of decisions then emotion because minimized because facts and logic are utilized.  Our gut reaction is to pay off a 3.5% debt even if we are sacrificing a 7% yield on investments. Facts and logic show that is not the case.  Facts and logic get people emotional and excited by having a 3.5% loan.  I love low interest rate debt!!!  I hope others see low interest rate debt as the godsend that it is in the quest for FI!
« Last Edit: April 26, 2018, 11:38:09 AM by tomsang »

dude

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Re: Law school loans gone!
« Reply #31 on: April 26, 2018, 11:34:25 AM »
You're preaching to the choir on the mortgage!  Mine is at 3.25% and I don't care if I ever pay it off. We've got shitloads of equity in it just from soaring price increases in our 'hood, and with a COLA'd pension + market investments, that mortgage payment will represent a smaller and smaller portion of my annual expenses year after year. Hell, in 15-20 years, it will likely be a rounding error!

That being said, I just paid off the last $8k or so of my 3.28% student loans because I wanted those fuckers gone, gone, gone.

tomsang

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Re: Law school loans gone!
« Reply #32 on: April 26, 2018, 12:02:05 PM »
I understand the desire to have debt gone.  I just think some people don't see the other side of the balance sheet on what they are giving up to extinguish the debt. For those that have done the math and understand the pros and cons, I am good with them making their educated decision.  Too many times I see people celebrating something that is hurting their quest to FI.  Paying off a 3.25% mortgage early is a terrible idea.  I also think liquidating an investment portfolio to pay off a 3.5% student loan is not a great idea.  If you are getting a tax benefit for your student loans you are getting a double hit on the taxes.  Gains on the sale of the portfolio and the loss of student loan interest credit. 

The celebration threads on paying off low interest rate debt reminds me of what I see on Facebook.  Someone buys a brand new Escalade with all of the bells and whistles and posts a picture of their new ride.  Everyone congratulates them, tell them how jealous they are, how someday they hope to have one of those, etc. Those types of posts encourage people to buy a brand new overpriced car so that they can get the same reaction.  I feel like some of the anti debt posts do the same vs. evaluating the cost benefit of keeping the debt and investing. 

What I hope to provide by discussing mortgages, low interest debt, utilizing lines of credit is that debt is not bad for those that use it appropriately.  Debt is a tool. If used well, debt can be the most amazing thing ever.  Using debt to buy toys is bad, using debt to buy investments is good if done in a safe and sane manner.  A 30 year fixed rate loan at 4% is a gift from the government.  Don't pay it off!!  Invest the amount that you are tempted to pay it down with.  If you can't do that and you will blow it, then pay off the mortgage. Like alcohol if you can use it in moderation, then it enhances your life.  If you are an alcoholic then don't drink it.  If you can't use debt in a positive manner then you may have a problem and need to just eliminate it.  I think most people are too emotional about debt. I think with education, they would see that debt can be safer than without debt.

Clean Shaven

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Re: Law school loans gone!
« Reply #33 on: April 26, 2018, 12:29:44 PM »
Paying off a 3.25% mortgage early is a terrible idea. 

I paid off my $300K 30yr fixed 3.25% mortgage in 3 years.  No regrets at all.

The celebration threads on paying off low interest rate debt reminds me of what I see on Facebook.  Someone buys a brand new Escalade with all of the bells and whistles and posts a picture of their new ride.  Everyone congratulates them, tell them how jealous they are, how someday they hope to have one of those, etc. Those types of posts encourage people to buy a brand new overpriced car so that they can get the same reaction.  I feel like some of the anti debt posts do the same vs. evaluating the cost benefit of keeping the debt and investing. 

Are you really equating buying an Escalade to paying off debt?  Come on...



There's a whole bunch of threads where people voice their positions on how bad it is to pay off mortgages or other cheap debt.  One of them was even started by you.  This thread, however, is not about that.
https://forum.mrmoneymustache.com/welcome-to-the-forum/why-do-you-do-and-pay-off-your-mortgage-early/
https://forum.mrmoneymustache.com/investor-alley/paying-off-mortgage-early-how-bad-is-it-for-your-fi-date/
https://forum.mrmoneymustache.com/welcome-to-the-forum/do-you-regret-paying-off-your-mortgage-early/

tomsang

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Re: Law school loans gone!
« Reply #34 on: April 26, 2018, 01:42:55 PM »
Are you really equating buying an Escalade to paying off debt?  Come on...

A premium Escalade costs $85k.  You paying off your $300,000 30 year fixed rate 3.25% mortgage probably has already cost you in excess of $85k based on the returns that we have had over the past five years. So, yeah. You would have been better off keeping your mortgage and buying an Escalade.  Attached is a calculator so you can see how much you were hurt by paying off your mortgage.  The investment yield used in the calculator was the 5 year yield for the S&P 500 with dividends reinvested.  Feel free to use whatever investment yield you feel is appropriate. 8-10% is more the normal for 30 year intervals.   

Bracken_Joy

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Re: Law school loans gone!
« Reply #35 on: April 26, 2018, 02:07:01 PM »
Tom, this isn't Ask a Mustachian. OP did not ask for your opinion.

Remember, the classic Mom advice: "If you don't have anything nice to say, don't say anything at all"

tomsang

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Re: Law school loans gone!
« Reply #36 on: April 26, 2018, 03:22:26 PM »
Tom, this isn't Ask a Mustachian. OP did not ask for your opinion.

Remember, the classic Mom advice: "If you don't have anything nice to say, don't say anything at all"

I understand the sentiment.  If someone said, "I liquidated my $75k investment portfolio and dropped it into my checking account.  Congratulate me!!!!"  I think it would be important to not congratulate them, but to educate them on why that was a bad idea. 

It seems strange that in the MMM facepunch world that people can't see the value in debating and sharing knowledge on financial matters.  Emotions are in play with finances.  The more people get educated on both sides of the balance sheet, the more we can control the emotions that are hurting our long term financial success.  I am not sure exactly, what I have said that is not nice.  I may have not celebrated the paydown of a 30 year 4% fixed rate mortgage, nor the liquidation of the $75k stock portfolio to pay down a 3.5% student loan, but I also would not celebrate if someone said they bought an $85k fishing boat.     

Bracken_Joy

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Re: Law school loans gone!
« Reply #37 on: April 26, 2018, 03:28:46 PM »
The issue is your timing and your persistence. OP has already replied and said, "thanks for your view, but I'm happy with my decision." Past that point it isn't education, it's rudeness. There are absolutely many places in this forum to discuss and debate things. But just like someone's wedding reception isn't a good time to bring up concerns about their new spouse, neither is a 'share your badassity' thread the time to keep pushing your views, when they're already been acknowledged and addressed. Timing and audience are everything.

Feel free to be inspired by the OP and post your own thread about "why I think you should not pay off your student loans! Debate me!" Honestly, I'd love to read that thread. And you would get a wider audience and more participation. But in here? Persistence to the point of rudeness.

BuildingmyFIRE

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Re: Law school loans gone!
« Reply #38 on: April 27, 2018, 08:10:17 AM »
Ok I'll wade into this swamp again.

Yes, there is logic and there is emotion in making decision about whether to pay off debt.  But there is also the unquantifiable factor of RISK from continuing to carry debt.  This is particularly true when it comes to student loan debt, which is effectively non-dischargeable in bankruptcy.  And its particularly true in the US, where when life gets you down, ain't no one coming to help you in most states.  Will you get sick in ten years and have that last $8,000 of loans at 3.25% be what brings you down when you can't afford to pay it and go into default?  Or will you enjoy 40 years of exceptional good health and by funneling money into the stock market --which never ever deviates from its guaranteed 7% return -- realize hundreds of thousands of additional dollars in savings?  The thing is:  no one knows the future. 

So you can berate someone all you like about how they shoulda coulda woulda, but you don't know ultimately how his or her life is going to turn out, and what unexpected challenges are going to pop up along the way.  The less debt you carry when life throws you a curveball the less chance you end up destitute.

And as far as emotions getting the better of you:  not everyone is built like Data.  For some, debt is a 500 pound albatross around their neck, that they carry every single day.  That they think about every day.  I would say that that is true for many of the people here.  It is a constant mental drain and source of background stress. 

What is the ultimate goal of FI?  Contentment?  Security?  Peace of Mind?  Happiness?  Some folks would rather spend a little more time in the working world, but do so on-their-own-terms, and not as dictated by the master to whom they own money. 

So OP -- good on you.  I send you an epic high five from across the internet.   And bracken_Joy -- you are my hero!

Now let's all hug it out.

Suit

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Re: Law school loans gone!
« Reply #39 on: April 27, 2018, 05:59:24 PM »
Thank you BJ and BMF, you have both eloquently said things I have been thinking.  BMF thank you for the internet high five! BJ, you are wonderful.

I had done the math and understood the ramifications of my actions prior to making the decisions that I did.

I have additional things that I took into consideration when I made my choices and additional thoughts about some of the postings but at this point I see no advantage to arguing or attempting to explain as I will not be going back in time and changing my decisions and I doubt that anyone will be changing their opinion here. I'm happy to hug it out and move on.

I deeply appreciate the many wonderful responses in this thread :)

tralfamadorian

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Re: Law school loans gone!
« Reply #40 on: April 27, 2018, 06:54:38 PM »
As someone who did offer a congratulations post and also is staunchly pro-long term mortgage debt, I had to step back and think about whether my visceral rejection of student debt arbitrage and at odds with my completely opposite support of real estate debt.

Some of the other posters beat me to it but I find that student debt arbitrage to be inherently overly risky. If something happens to prevent you being able to pay off your mortgage debt you can a) rent the property out, b) sell the property or c) walk away. Student loan debt cannot be discharged in anyway besides repayment. There's no asset to sell or rent and no possibility to discharge the debt through bankruptcy. Life and disability insurance can cover some scenarios in some cases but not all. 


Arbitrage

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Re: Law school loans gone!
« Reply #41 on: May 09, 2018, 07:42:57 AM »
Congrats!  Still paying off my DW's loans, a bit at a time.  We lucked out in that she graduated right before rates jumped, and were able to to refinance the federal portion of her loans at 1.63% fixed over 25 years.  She also had a big chunk of variable rate unsubsidized loans that we paid off pronto, but I'm happy to let our existing loans languish. 

Unfortunately, she has never actually used her law degree, and this will be the first year she earns over $75k (unless she quits, which she is strongly considering), so her education has been a very poor investment.

Norioch

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Re: Law school loans gone!
« Reply #42 on: May 09, 2018, 04:35:45 PM »
Congratulations!

Suit

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Re: Law school loans gone!
« Reply #43 on: May 09, 2018, 07:13:45 PM »
@Arbitrage Thanks! At least your DW got a steal of a rate and you guys are financially with it enough to take charge of the risky loans.

@Norioch Thanks!

Nederstash

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Re: Law school loans gone!
« Reply #44 on: May 10, 2018, 12:07:23 PM »
I wanted to post to celebrate being done with them (!!!!) and also lay out how I did it.

I graduated law school in May 2011 and just shy of 6 years later I'm done with my loans. I graduated with around $127k (all federal at 6.8% or higher) and got a public service job. I was planning on doing PSLF so I made minimum payments or close to it for 4 years. I found MMM about 1 year after graduating and increased what I was saving and investing all while making minimum loans payments. 4 years into my public job I was becoming increasingly unhappy and experiencing stress related health issues. I decided to pay down my loans so I wouldn't feel trapped by limiting a potential job search to other public jobs. At that point my loans were around $134k. 

I sold off $70k in taxable stock and threw it at the loans. Then I refinanced with Earnest and set my loan payoff at 5 years so I could get 3.5% interest. Then I just kept throwing every extra dollar at the loans. All the while I kept living simply in the big aspects of life. I still live in the same studio apartment and drive the same 1995 vehicle. I also wound up switching jobs about 6 months ago for a pay cut and better quality of life and I wouldn't have done it without having paid down my loans. I just paid off my loans yesterday and used my emergency fund to pay them down to 0. Now it's all uphill!! 

A big thank you to all the MMM community, I wouldn't be debt free right now without you all.

Absolutely bloody fantastic! You should feel so proud!! I'm mentally high-fiving you right now.

Suit

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Re: Law school loans gone!
« Reply #45 on: May 10, 2018, 06:46:18 PM »
@Nederstash Thanks! ***mentally high fives back***

DapperD123

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Re: Law school loans gone!
« Reply #46 on: May 15, 2018, 07:09:09 PM »
Well done!

avedaprincess

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Re: Law school loans gone!
« Reply #47 on: June 10, 2018, 07:35:01 AM »
Congratulations! I have federal loans at around 4.5% and I checked with SoFi and they gave me the same rate. Did you shop around and found Earnest? What were your monthly payments? I am trying to figure out how to get these paid off, but at the same time saving money so that my retirement can grow.

FIREby35

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Re: Law school loans gone!
« Reply #48 on: June 10, 2018, 08:21:32 AM »
Just to chime in, great job. That is amazing. I've been practicing without debt for a few years now and it is everything you hope it will be!

Suit

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Re: Law school loans gone!
« Reply #49 on: June 10, 2018, 02:29:14 PM »
@DapperD123 Thanks!

@avedaprincess Earnest was the only re-fi I applied to and they give a sliding scale where you can set up higher interest over longer time period for lower monthly payments or lower interest over shorter time period for higher monthly payments. I went with the latter at  3.5% over 5 years for $1185 a month.

@FIREby35 Thanks! So far, it's a great as I thought it would be. Having that money come in and not go out every month is amazing.