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Category: debt

Live Like A Student: Embrace Non-Traditional Ways Of Living

If you had to ask me what the single most important thing you can do for yourself financially when you finish school, my answer would always be to live like a student. It seems so obvious, and yet, despite being so obvious, very few people actually follow this advice.

I live in a college neighborhood, so I see a lot of college kids when I’m out and about. Sometimes, I like to think about how weird their living situations are compared to your typical middle-class American. Most of these college kids live in rundown houses, usually packing four or more people into a house. It’s not uncommon for people to share rooms or live in tiny bedrooms no bigger than a closet. When I’m out doing deliveries, I’ll sometimes make a delivery to a dorm and am reminded that, for at least a year, most college kids live and sleep in a tiny dorm room with a person they’ve never met before!

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Pay Off Your Student Loans Now – It Doesn’t Get Any Easier Later

I recently realized that I’m turning 30 in a few weeks. As I was reflecting on entering my 30s and the things I’ve achieved, one thing occurred to me – I must be in the minority of recent lawyers that will be entering their 30s with absolutely no student loan debt remaining.

This is sort of interesting when you think about it. Student loans have become so normalized in our society that we just expect everyone to have them now. This is especially true for most high income professions that require many years of post-college schooling. When you include all the time spent accruing debt in grad school, it’s not uncommon for someone to keep their debt around for a decade or more. A lawyer graduating at age 25 could easily still have their student loan debt kicking around until they’re 35 or older. I know of dentists that will be paying their student loans well into their 50s!

A common refrain is that you’ll pay more on your student loans sometime in the future…

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Why I Prefer To Pay Off Debt Aggressively

Anyone with debt and a decent cash flow will eventually find themselves with a choice. What should be done with all of that excess money? Assuming your goal isn’t to spend it all on buying things, you’re basically left with two choices. Pay off your debt aggressively. Or invest the surplus.

The pure mathematical answer is to play the interest rate arbitrage game. Excess money should go into assets that provide a rate of return higher than whatever interest rate your debt is at. It’s a pretty simple calculation from that vantage point…

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Do You Know How Much Your Debt Costs You Per Day?

One of the things that surprised me when I began my student loan payback journey was how much interest I had to pay when I started making my payments. What was even more surprising to me was how much interest my loans had accrued while I was in school (and making no money). In fact, when I graduated and made my first student loan payment, it didn’t even reduce my student loan balance at all. All of it went directly towards the interest!

Interest is one of those things that we all sort of understand in theory. Most of us basically know that when we borrow money, we agree to pay it back at some point, with a little extra on top. But I don’t think we’re very good at really understanding what interest looks like on a daily basis. Maybe that’s why we sometimes let debt linger in our lives…

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The Only Secret To Paying Off Debt Is To Be A Weirdo

One of the things I always tell people about debt is that there isn’t any secret to paying it off quickly. There’s no magic method that will make your debt disappear. No secret tricks that will crush your loans any faster. And you probably shouldn’t count on someone else paying your debt off for you.

In the end, paying off debt really just comes down to a single basic principle. Live on less than you earn and use what’s left over to pay off your debt. The more you have left over to pay towards your debt, the faster it’ll be gone. It’s basically that simple…

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