Should You Invest with Student Loans? | Phil Town

TL;DR

Investing at a young age is crucial for long-term financial freedom, but it's equally important to pay off high-interest student loan debt.

Transcript

hi guys I'm Phil town from rule 1 investing and today I want to talk to you about whether or not you should be investing if you have student loans on average students who graduated in 2018 entered the workforce with a student loan debt of thirty nine thousand four hundred dollars that's a 6% increase from the previous year and the average for those... Read More

Key Insights

• 🧑‍🎓 The average student loan debt is increasing, putting financial strain on graduates.
• ☠️ Government programs aimed at increasing college accessibility have unintentionally caused tuition rates to skyrocket.
• 🤕 Investing at a young age allows for compounding to work its magic, leading to greater financial freedom in the future.
• ✋ Paying off high-interest student loan debt is crucial for long-term financial stability.
• ☠️ The decision to prioritize paying off debt or investing depends on the interest rates on your loans and potential stock market returns.
• 🥺 Starting investing habits early can lead to a lifetime of financial discipline and success.
• 😘 Eliminating student loan debt should be a major financial goal, even if interest rates are relatively low.

Questions & Answers

Q: What is the average student loan debt for US graduates?

The average student loan debt for graduates in 2018 was $39,400, a 6% increase from the previous year.

Q: How have government programs impacted college tuition rates?

Government programs designed to increase college accessibility have inadvertently caused tuition rates to rise at an extraordinary rate, nearly double the cost-of-living index for the last 40 years.

Q: Why is investing at a young age important?

Investing at a young age allows for compounding to work its magic, resulting in significant growth and potentially reaching financial freedom earlier in life.

Q: Should I prioritize paying off student loan debt or investing?

It depends on the interest rates on your loans. If they are higher than the potential returns in the stock market, it's best to focus on paying off debt. If the interest rates are lower, it may be a good idea to invest while also making manageable loan payments.

Summary & Key Takeaways

• The average student loan debt in the US is increasing, putting a burden on young graduates.

• Government programs aimed at increasing college accessibility have inadvertently caused tuition to rise at an alarming rate.

• Investing at a young age is crucial for long-term financial freedom, as compounding can significantly grow investments over time.

• Paying off debt is also important, especially if the interest rates on loans are higher than potential stock market returns.