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|Subject: Re: Roth or School Loan?||Date: 1/26/2004 4:45 PM|
|Author: 2old4bs||Number: 38745 of 77203|
My only debt right now is 16,000 in college loans. My question is this. After I condolidate my loans my interest rate will be 2.3% and my payments will be about 100 a month. I feel as though I should only put the minimum 100 in each month expecting to recieve a higher rate of return on my investments
I can tell you that Suze Orman thinks that student loan debt is the only type of debt that's 'good', because it's an investment that you made in yourself!
You didn't mention an emergency fund, do you have one? My only concern with this approach would be that if you ran into a situation where you couldn't work for a while, how would that impact your payments on the student loan? And if you get behind in your payments, does that impact your credit score? (Which would then effect interest rates on mortgages, credit cards, etc.)
I think the Roth is a great idea for you, but I would suggest saving for an emergency fund to cover 6-8 months of expenses (including the student loan monthly payment). The efund money should not be in stocks (because you wouldn't want to have to sell at a time when the market might be low). I have my emergency fund money in short term bonds--Suze Orman suggests a money market account.
That's my 2 cents,
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