Student Loans, Savings or REI

[Matthew Shaw]

I just graduated from school with $56,000 worth of loans (I had $74,000 and paid $18,000 immediately. I acted hastily and regretfully did not consider what I could have done with that $18,000) with rates of 5.8% and now have about $4,500 left in my bank account. I have a job that makes $35,000 per year. I am interested in finding a part time job (hopefully driver for doordash but waiting on confirmation) and I am living at home so my expenses are basically zero. If I were to spend $1,750/month on loans, I believe (some web-app told me) I could pay off my loans in 3 years. That being said, at 25 I would have no savings, or passive income. Has anyone had a similar experience and can recommend their opinion on whether I should go hard on eliminating my loans or rather work on building a savings/property deposit?

[Cameron Tope]

Matthew,

I was in your shoes not too long ago!

The big problem with student loans is they are not forgivable in a bankruptcy so they will stay with you until paid off. 

However, the dilemma is the stock market returns 9% on average and you can invest in real estate that returns 15% or more. 

From a strictly financial calculation you'll want to invest, but that doesn't take into consideration your emotions and peace of mind. Do you worry about having that debt?  

If you don't worry about it then invest, but if having the student loans creates worry then pay them off. 

Hope that helps!