Hi everyone,
I'm new to the site. Have been following the articles for the last week and found it refreshing to see people who are trying to escape the hollow priorities of the modern life. I don't know if my aim is to retire early (I find my job very fulfilling), but hope I can learn to stay grounded.
Okay, so here's my problem I was hoping for some opinions on.
I don't really have a lot of consumer debt except the mortgage and a car at 0.9%, and saving well into my retirement savings.
My major problem is $90K on student loans which is consolidated into a professional student line of credit. (consolidated government student loans for undergrad and professional school and bank loans. Interest is at prime rate ~3%) It used to be around $130K but I think I've been pretty good to slowly cut it down during my training to what it is currently.
Now I'm finished training and earn a good living. I've also incorporated and all my earnings go into my business account, and I pay myself a salary (I'm the only employee) for tax purposes and to support my older parents without incurring lots of taxes.
I have lots saved up in my corporation, more than enough to pay off my student debt in one fell sweep. But my financial advisor is telling me I would pay WAY more in taxes to take money out of the corporation (as that would put me up into the highest tax bracket of 46%) than what I pay for interest at 3% for my loan. At my current rate of repayment, I would pay it down in about 3.5 years.
Clearly the numbers don't lie... but I still feel really uneasy about the situation. I've lived through my parents bankruptcy when I was younger when their business folded during the recession, and remember living at one point in fear of eviction. Clearly I am very debt adverse from this history... although I guess that's not necessarily a bad thing.
Would this be considered a 'good' debt? Or at least a 'not-so-bad debt'? Should I just tell my inner voices to shut up and do what makes the most financial sense?