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They're broken up into groups. Range from 5-8%
You don't say what % you're paying on your student loans.
They're broken up into groups. Range from 5-8%
180k of student loan debt! Holy e. That’s what I paid for my home 10 years ago, which I’m about to sell. At least you’re in a high-paying profession. My advice would be to live on the cheap while you pay that beast down.
I’d pay the $15k to avoid the interest. It is almost 40% of your savings but I think it’s worth it to avoid the interest. It’s not like that $40k is going to be making you any significant money. Just pay that off, then work on stacking back up your savings while making minimum payments on the loans until you have your savings back to where you feel comfortable.
Also, tell your old lady to start earning her keep and get a job
This is my take:
1. Under no cir stances, do you have a child until you're financially stable.
2. I would put away $10k for emergencies - if your car breaks, etc.
3. Study very hard and pass that bar exam.
4. Stay in Texas - you have excellent medical schools in TX and med school tuition is VERY cheap compared to everywhere else.
5. Once you pass the bar, find a higher paying job. I don't think easy and stable is good in this situation.
6. Eat at home (cheap and healthy) - brown beans and rice, whole wheat bread and peanut butter, etc.
7. I suggest that you start following bit coin - it is VERY volatile but I think it's here to stay and will only go up (look at its history) but because it is volatile, trying to time it is very difficult but I don't think it's gonna disappear or anything like that. It went over $6k and will most likely get back there. Study the ebbs and flow of it eg. on 8/31, it was at $4745 - dropped to $3530 on 9/15 and hit $6006 on 10/21. Don't try to hit the highs and lows and don't get greedy but you can definitely do better than 5-8% and keep your money "liquid" (meaning working for you instead of paying off a small part of your loan). Keep track of what you start with and as long as you make a better % (accounting for the tax that you must pay), keep on investing.
This is what I would do if I were in your position. Take or leave whatever you like - good luck.
Oh, missed the deferment being over. Of course, you must pay the minimum - do you know what that will be?
Pay the $15k
I think you should start retirement savings (IRA, 401k) now. If you have employer matching then max it out, if not then at least get something started. You are young and the power of time can't be overstated when it comes to retirement savings. If you start now it's pretty hard not to be a millionaire when you an old man. That's the one thing I disagree with Ramsey on. Being debt free is awesome and something you should strive for but religiously sticking to a retirement plan should come first imo.
I don't think you are in a position to do the Dave Ramsey debt snowball. Best you could do is tread water, but no more deferments...seriously. Actually I think DR would tell you that you don't have a debt problem as much as you have an income problem. So better job or 2nd job and then you can try to knock that debt out. If your wife is going into med school you're going to have plenty of time to either sit around the house by yourself or you could just work more. Trust me, been there done that.
Last edited by SnakeBoy; 10-24-2017 at 09:35 PM.
40K sounds about right for what you should have in your emergency fund so you should try to build back to that after paying the $15k
Yeah, I never even considered getting a deferment. The first one is basically automatic since law grads spend their first few months in bar exam prep and job hunting and don't even get bar results until 6 months after graduating (in CA at least)
My main question is if I should go full Ramsey and spend basically every spare penny on paying down the loans, or if I should go at a more reasonable pace and also start saving. I don't have an income problem per se since our cost of living is quite low.*
But yeah as far as tackling a 180k debt, not really equipped for that just yet. Once I pass the bar I can job hunt more actively. But yeah paying that 15k lump sum made sense, wanted input on that too.
*That's it's own story. The guy was renting units to local college kids for like 500 a month but the place was in ing disrepair. The unit we took over didn't even have a functioning kitchen. So I made a deal where I put in all the labor (with my father in law) and we fixed the place up. Repatched walls, plumbing, building a kitchen from scratch. The owner fronted costs of supplies. The unit is worth something like 1500/month now but we locked it in at 800 as repayment for the labor and increasing his property value. Was tiring putting in that labor every night after work, but it's pretty ing rewarding living in it.
That's what I would do. I did the full Ramsey a long time ago and it's great being debt free but in retrospect had I payed off debt a little slower and also invested I'd be in the same position I am today except with probably an extra few hundred grand in the bank.
I think Ramsey's advice is good if your talking about knocking out credit card, auto, etc. debt but for student loan or mortgage debt I think a more balanced approach is better in the long run.
for sure. he's adamant that you ONLY give mortgage debt that treatment, but yeah perhaps i should also carve out an exception for my student loans given their magnitude (not some 30k student loan like the callers on his show talk about). i'll talk it over with others, too, but good to get some insight here tbh
Biggest thing you should do is look into refinancing that debt. It's been a long time since I thought about student loan debt but just I heard this commercialfor sure. he's adamant that you ONLY give mortgage debt that treatment, but yeah perhaps i should also carve out an exception for my student loans given their magnitude (not some 30k student loan like the callers on his show talk about). i'll talk it over with others, too, but good to get some insight here tbh
https://www.sofi.com/student-loan-re...7f6ec1cc49&N=1
She's going to med school and he's going to pass the bar. If there not millionaires by 45 he should just throw the towel in. doing that so he can have rolex in the retirement home.
i might actually get a big hand with that in the next year or so. since i moved out, my parents are looking to sell their place and downsize, since it's just the two of them. once that's taken care of, my old man said he'd look into getting a personal loan at a much lower rate for the amount of my student loans, and they just have me make the payments on his loan. he's not going to need the credit since they'd be buying their new place cash. it would get the loan off my name and set me up with a much more reasonable interest rate.
i'm not depending on that, but it could potentially be a great solution and an easy way to refi
I would do whatever 401k match an employer gives before paying down debt at 5-8%. It's free money.
That's some wonderful dad you have there who is willing to do that. That's extremely risky on his part.
To be fair... I've heard him tell people to start investing if their debt is going to take longer than two years to pay off, which is where you're at. So yeah I'd keep some money around especially since you are about to take the bar and you are newly wed. It sounds like you'll be moving soon? So you'll need cash around. The thing though is to keep your lifestyle down. You are living on 50k now. Keep living on 50k even if you are making 200k in a couple years until you pay this off. Don't buy new cars or buy an expensive house.for sure. he's adamant that you ONLY give mortgage debt that treatment, but yeah perhaps i should also carve out an exception for my student loans given their magnitude (not some 30k student loan like the callers on his show talk about). i'll talk it over with others, too, but good to get some insight here tbh
i just took the bar in july, get my results in november. also already finished with the moving process and all expenses with that. furnishing, moving, everything. might buy another small cabinet next to the dining table but thats really about it.
so im not really anticipating any specific expenses, though holiday season tends to run up the bill. i'd only be screwed if i didnt pass the bar and have to retake it, which will cost something like 800 or so, plus working less...
Your wife is going to rack up debt with med school, too. If you keep expenses down now, you’ll be all right later on. I remember my sister living like a poor person after med school and she’s doing really well now. But it took a good 10-15 years.
Play the long game
I'm thinking of investing in five to eight stocks for a ROI of maybe 5-15 percent or better over the next year. Anyone have suggestions?
Are you only leaving the money in for a year? If so, I wouldn't bother. Just put money in a money market.
Have more than enough in money market at 0.4 percent.
I personally wouldn't invest money I planned on spending in 12 months just in case the market goes down. Now if it was 3 years or more, sure.
Homie, you need to get some plaintiff’s cases. If you’re in a job that is paying considerably below the Cravath-scale, you need to sure-as- be assured that there is some upward mobility in terms of salary, if not equity. Otherwise, I’d seriously consider looking at another firm. There’s something to be said about taking a pay cut to get experience, but 75k is too far below market to justify that kind of hit. Especially in California.
And I wouldn’t worry too much about taking another state’s bar. You can waive-in your MBE score for up to 2-3 years (I think). I took and passed the NY bar while a first year at a biglaw firm in Dallas. It can be done, you’ll just hate life for 3 months.
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