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Subject:  Re: Student loans vs Roth? Date:  9/25/2001  6:06 PM
Author:  KnJDubya Number:  123 of 1670

Hey there - welcome to the working world. Here are my thoughts on your situation, I was in the same boat myself 6 years ago.

I had CC debt out the wazoo and paid that off simultaneously with making investments. Being an engineer, you'll find that you have more $ as time goes by, but that time aspect is critical to an investor. Put both aspects (long term and short term) to work for you - reap the benefits of the time value and compounding of a Roth IRA or 401K for the long term. Meanwhile, "make money" in the short term by paying off that CC debt sooner (the sooner you pay off your cc committment the less you will spend in interest). Think of your aggressive paying off of that cc as putting $ in your pocket. You might consider getting a 12 or 24 month debt consolodation loan (better rate than a credit card) that would force you to pay that blasted thing off. After you do - pay off that balance every month!

If you've got some student loans (like a Stafford) pay those on their graduated scale - the interest you pay is tax deductable for a couple of years. The interest rate is lower than a cc and this is one of the best debts (if there is such a thing as "good debt") you can have in establishing a good credit rating.

So in short:
Do contribute to a Roth or 401k - even if just a little bit.
Do whatever you can to pay off that cc debt.
Pay off any student loans on their normal repayment schedule.

Obviously these are my viewpoints but I hope this might help you in your decision making.

Happy trails,

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