Reply to How Much Would You Spend on a House?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I love how everyone who claims it is better to invest $40K instead of paying off a $40K student loan starts with the assumption that someone has $40K sitting around.  For most of us, it takes time to accumulate such a sum, so it isn't a simple 2% vs 8%.   [/quote]

I only have a few friends who admit to having student loans.  When the topic comes up they love to say how "well you can earn X in the market."   However I seriously doubt that any of them actually have that amount of money available to invest.  I doubt they invest outside of their retirement accounts.  It's just something they say to make themselves feel better about having debt.  [/quote]

Agreed. I'm a mortgage underwriter and i do a cavity search on people's finances. High earners dont carry around student loan debt. Period. I see alot of people making in the 300-400k range spending ALL their money and only having 401k as investments. And sadly, from what i see, i dont lump the 300-400k into high earners mainly because the manage their money pretty poorly. Lack of investing and carrying around silly loans like student loans and car loans.[/quote]

Hmm, We earn about $300k, have about $120k remaining on student loans, and have about $150k in a brokerage account earning returns that far outpace the interest on our student loans.  (That's in addition to the 401(k)s which are maxed out every year.)  Of course we could liquidate the brokerage account and pay off the loans, but why would we?  The loans are at 2.5-3.5%. I don't say this to brag, but just to point out that you might be a little bit overconfident in your assumptions.[/quote]

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