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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 308884  
Subject: Re: Repayment of Loans Date: 5/1/1998 8:14 PM
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<<I have heard of an 8% cut off line for extinguishing debt. These debts fall under it. I have a "relatively" high tolerance for risk, and was wondering if I should pay the minimum possible on all of these, investing the remainder of what I "can" pay. I know the dangers of investing money owed elsewhere, but this would not be say, my mortgage payment or meal money. All foolish responses Very welcome.>>

Hey, Nat!

You haven't said when you're graduating, or what you will be graduating with. I think this plays a part. What you decide will of course depend upon your earning power after you are in your career.

Personally, I'm a believer in getting rid of debt before investing, but in your case of having extra cash, and low interest rates, you might well decide to put 'some' of your extra money elsewhere.

First suggestion I'd make would be to make sure you have an emergency fund for those unexpected occurances. This way, you wouldn't feel tempted to have to start accruing more debt with credit cards.

After that, you might want to invest a little in some good companies that you've done your homework on. Perhaps those with proven track records and/or dividends.

Decide on your comfort level. Would you be comfortable investing while you have these loans outstanding? Or, would this place you in a position where you'd be constantly concerned over market fluctuation?

Your use of the word risk sends a warning signal to me, suggesting that you might want to give your decisions a lot of thought before doing anything.

Good luck!

Tony
...but I still am...

Off2Aruba
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