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Author: TMF2Aruba Big funky green star, 20000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308881  
Subject: Re: Getting out of debt Date: 2/1/2001 7:34 PM
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Fellow Fools,

Here's my situation: I'm 30 and well employeed. I spent 9 years in school and as a result have a $30,000 student loan and a $10,000 credit card bill.

My dilemma: During my time as a student, I invested in my company's stock participation plan. I now have 1000 shares at about $35/share. I also have some stock options that I can exercise although the grant price isn't much lower than the market value. I also invest 12% of my gross paycheck into my company's 401k plan as well as 10% into stock participation.

Should I...
1. Sell some stock and pay off some of those debts
2. Discontinue my current investments and focus on paying off these debts or
3. Keep investing in 401k and stock participation and try to pay off the debts slowly?

All opinions welcome.


Hi wrw!

Actually, I'd consider "almost" doing a combination of your 3 choices. However, as far as the 401(k) goes, I'd just invest whatever amount gets matched so as to not lose out on the free money.

I'm a believer in using equities to pay down debt. To me, that's like moving one investment to another, as reducing debt and eliminating the interest payments is certainly an investment--a winning one at that.

Of course, you do have to keep in mind that any stocks you have are subject to capital gains taxes, so that has to be tossed into the equation.

Aside from this, I'd suggest doing everything in your power, changing whatever you can in your lifestyle, etc. and work toward paying down your debts. You'll be much happier without them!

Good luck!

Tony
...but I still am...

Off2Aruba
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