Why You Should Pay Off Student Loans Before Investing

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[@kkhuynh5357]

I paid off my student loans yesterday 24000 in 2 years . After watching this video I felt relief and relax .

[@Thatperson2-u7u]

Congrats!

[@Aquino1088]

Good for you! I’m starting my debt journey now so, rice and beans from now on!

[@briankgarland]

And how are you going to feel about it once Biden uses your taxes to pay off everyone else's student loan debt?

[@kkhuynh5357]

@@briankgarland I am in Canada .

[@kkhuynh5357]

@Stephen Gaines I am Not too sure about investment i am not investment expert. I work and paid as much as I can .

[@kadenwalker9592]

THIS is why Dave is great. He knows that this kid with a background in finance is going to look at his life from a mathematical standpoint, and presents the logistical argument first. Whereas, Dave's go to argument for someone with a different background is often that (besides less risk) paying off debt motivates you to stay debt free and build wealth.

[@littlebob1261]

Mathematically paying off his loan two years ago cost him many many thousands of dollars today

[@NeoAndersonReloaded]

Just pay it off the relief is priceless.

[@lionheart93]

but what if debt is greater?

[@Corey-qu8fx]

Paid off my 10,000 car loan in 8 months. Feels amazing 👍🏼👍🏼

[@devoryburns2407]

How

[@Corey-qu8fx]

Devory Burns saving quick and hard!

[@adreenalizette]

That’s amazing congratulations!

[@matthewlesko936]

Adreena Ceniceros thank you. Did you find any help

[@PassportBrosBusinessClass]

I paid off my student loans 80 months early and then bought a house. You MUST pay off credit card debt or loans or anything else with interest payments because if you invest, the interest will eat up your capital gains.

[@alextogo8367]

Only you get lucky and double your gains. High option trading

[@twincherry4958]

It depends on the interest rate on the capital gains.

[@littlebob1261]

Waiting to invest will eat up your compound interest gains

[@HaoQuachy]

fanance

[@blackheartcardigan]

I pronounce it FI-nance. Is that wrong or is it just a different accent?

[@user-gx4wi4cv2m]

I think it’s a southern thing?

[@josephclements2145]

@@user-gx4wi4cv2m maybe a "deep south" thing

[@AdaEstherGJ]

This guy will be a millionaire for sure. Congrats

[@ivandiaz5791]

He's investing about $20k/yr in tax-advantaged retirement accounts and sounds like about that much in regular brokerage accounts. After he takes about a year worth of that 'extra' investment out to pay off the debt, he'll go back to his strategy of maxing out 401(k) and IRA plus every dime he can spare to a brokerage account and probably even get more aggressive with it than he was before, since he's so crazy eager to see his nest egg grow and grow. He's probably less than a decade away from his first million. It is absolutely crazy to see how much a bit of motivation can do as long as you can sustain it. EDIT: I just checked my math and my instinct was right. Current maximum contribution limits for 401(k) and IRA adds up to $25k/yr. Let's assume he doubles that, he fully funds those accounts and invests the same amount outside of retirement accounts. If he's starting with about $50k right now already invested, at 11% gross ROI, he hits a million in > 11 yrs. He could probably do better than that, working in finance with that kind of motivation and critical thinking skill he will earn a salary that allows him to invest more than $50k/yr if he wants to.

[@AdaEstherGJ]

@@ivandiaz5791 wow. That's awesome. Great calculations.

[@CellGames2006]

Just wait till he meets "the right girl". Those calculations could change drastically.

[@okthennone]

I just received a lump sum of money and is nearly enough to pay off student loans. I knew what Dave would say, but it is difficult to write a check for that much. The money helped me live through the recession and paid for school. It was a lifesaver but now it's time to pay the piper and be done.

[@dggarcia89]

okthennone like DR says, paying off the debt is admitting you already spent the money

[@RealLifeMoney]

That’s very true. I remember the beta and risk adjusted and investors don’t account for that. Basically paying off debt is guaranteed vs investing is not. Nice explanation 🤔

[@RealLifeMoney]

Ryan Spalding if we’re talking about retirement I wouldn’t say guaranteed but yes history shows it grows. However, paying off debt could be seen as a short term time horizon and paying that off is more guaranteed than the stock market in a few years lets say.

[@nonenone2641]

@@ryanspalding6252 I would love to see that... You would be schooled. It would be hilarious 😆

[@DewTime]

I agree with you guys all the way. I do a combination of both. I’m tackling my debt as absolutely hard as I can, but at the same time I make sure to at least max my Roth. I dont get a 401k match so I don’t do 401K but my wife does get a match so she contributes to hers. I’m about to get a new job in a few months with 50% match up to the IRS limit, so I will be maxing out my 401K then.

[@ReMz10184]

@@ryanspalding6252 "My dad this" "My dad that" So you have no qualifications yourself. You are typing on KZbin like your word is gospel. You are an idiot. Eating a negative ROI (a student loan) cuts directly into any profits you might get from a positive ROI. So you think your $20k investment at 5% is great? How about your $50k student loan at 3%? Run the numbers genius. Quit using your father's success and knowledge as your own. Go get an education and a job.

[@michaelcerean1990]

Diversification is good because it mitigates risk amongst a group of investments. However, does your diversified portfolio account for a worldwide pandemic? No...it doesn’t. It never did and it never will. The problem with risk assessment is that you can never be sure if it’s accuracy......because you don’t know what you don’t know. Pay the debt first because it’s a sure thing.

[@KnowledgeIsPower19]

Following Dave Ramsey has completely change my wife and I. We were spiralling out of control in debt, and every since we did Financial Peace University we have paid off $16,000 of debt in 5 months. I have even created my own youtube channel talking about a lot of Dave Ramsey's principles. I want everyone to start having the financial freedom that my wife and I are finally experiencing.

[@TheCbone1979]

Lance kaminsky no , I still don’t understand why he still promulgates the 12%.

[@Senorinnovation]

Wow, I never thought about Beta not being part of the formula when considering debt. Interesting

[@chrisbaker2669]

Paying off debt has no taxes and investment income is taxed so thats another reason to pay off student loans.

[@garrettstevensen2467]

Chris Baker according to the United States IRS, investment income received from a Roth IRA and Roth 401k are *not* taxed. This has been the case for decades, unless it just changed hours ago...

[@ThomasBomb45]

@@tyronesimpson8770 you also get taxed on the money you used to pay of the loan... Income is taxed only once regardless of whether it goes to a traditional or Roth IRA/401k or is used to pay off debt. Taxable accounts cause your money to be taxed twice, first when it was income, then again when there is capital gains or dividends.

[@JonSchoeller]

Paying off debt is a guaranteed ROI!! Where as investing is a maybe. Great advice Dave. I teach the same technique as well.

[@RealLifeMoney]

Jon Schoeller that’s exactly what I was thinking. Guaranteed instead of banking on what we don’t have 👍

[@JonSchoeller]

@@RealLifeMoney absolutely!

[@JonSchoeller]

@@ryanspalding6252 nothing is a guarantee in the investment world unless its yielding too low of a return to matter. Some things just have a higher probability than others. His student debts costing him unnecessary interest is more probable than him making the same 5 to 6 percent in the market short term. I doubt his 20k loan had a term of 15 to 20 years. To each their own, I choose to take the more conservative route more often than not. It has served me well.

[@JonSchoeller]

@@ryanspalding6252 Dave wouldn't agree with your strategy Haha. A sophisticated investor can leverage debt as long as they have calculated the risk. For most, I wouldn't recommend it.

[@ChrisInvests]

The debt snowball works!!

[@cherrytung]

*Dave NO DEBT Ramsey*

[@ryanmeers842]

My wife and I will be debt free in one year thanks to following Dave’s advice. I would love to shake his hand and thank him one day.

[@cherrytung]

*long time subbies probably know the answer before even watching the video*

[@juliochavez1308]

We are called dave paulers.

[@IamtheGL]

Claro que si

[@trippin9298]

If he ends up working for a company with a 401k that matches AND is 100% vested, then I'd invest to the match first bc the ROI is guaranteed and is greater than any debt could be. If that is not his situation, then I'd do exactly what DR recommends bc paying off debt is a guaranteed ROI

[@fortunateson6035]

It’s mind set

[@geoyaj1042]

This should've been the question. Vested company match is OP

[@digitalbrand5510]

I graduated in finance with all this debt...oh, the humanity

[@Dieje]

Digital Brand lol

[@fastingislife3766]

Digital Brand 😂🤣😂🤣

[@myfinancialclimb3121]

Or irony

[@ThomasBomb45]

Bruh his degree in finance is why he has so much saved in the bank already

[@kevinrushing5667]

Going into debt to get a degree isn’t a bad thing. The degree he has will pay off quickly

[@CarasGaladhon]

Do people in America really pronounce ‘finance’ like that? 🧐

[@ToddA34]

Jacqueline Willett no

[@cindrickalajanearrington3549]

Yes, finance is both a verb and a noun just pronounced differently based on grammatical use. The way they are pronouncing it is the subject. Fin-nance is the verb i.e. He will finance the house.

[@BookofFuture]

Depends on the state most likely. It’s Finance like fine in many places.

[@CarasGaladhon]

Mr. Haha 89 I’m from Baltimore and I cannot recall hearing it like that in any context.

[@heatherkeller3528]

Jacqueline Willett It bothers me when I hear it pronounced like that. I have a finance degree and a lot of my professors pronounced it that way. I live in Louisiana.

[@drnabilkhan]

I wonder how age factors into this scenario (paying off student loans prior to investing). I am in my upper 30s; with approximately 85k in student loans left; income of 85k/year; if I don't invest some of savings at the same time as making loan payments I feel I am missing out on compounding investment gains. If I was in my early 20s maybe it wouldn't matter; but at this age wouldn't it be smart to keep investing (even if a small amount) while simultaneously making loan payments?

[@kamoroso94]

Curious, how much student loan debt did you start with?

[@calibby85]

And if you have a 401k with employer match, that's hard to ignore...

[@mikeberb]

Great conversation, needed to hear this from the finance perspective.

[@sinbig5570]

I love him and followed everything he suggested except this one. I invested heavily since 2017 when my student loan amount owing was $25k. I made $300k to date with investing and just paid off the remaining $15k student loan.

[@sunset6010]

Schools do NOT teach this info FOR A REASON !

[@motoryzen]

Because they WANT people in debt just to look good for the fed government's that feed them money.

[@ligerllama]

Thankfully, 40% of the schools in the United States are now teaching financial literacy. This number is likely to continue to increase. KZbin and the Dave Ramsey Show can help as well.

[@ClassicMan33]

lolnopound Do you realize how stupid that statement is? That’s like me saying McDonald’s doesn’t make money off its customers when they spend their money there. Regardless of where the money came from, revenues are being generated. Salaries are being paid. Light bills are being paid. And more buildings are being built on campuses.

[@NewKind]

lolnopound most students would not be able to pay the school to go without the student loans. It would be against their own interests for the schools to teach this stuff. 💵

[@NewKind]

lolnopound the “how” was answered in the first sentence of my response: most students would not be able to pay to go to college without student loans. The loans literally fund the colleges... hence the reason it wouldn’t make sense for them (colleges) to teach against the practice of taking out student loans.

[@KSlivinghappy]

LOVE THIs!!! That is great logic. Great explanation Great explanation Loved the mathematical explanation. Totally understandable.

[@krissingh5016]

Lol that button tho😂

[@MichaelSpencer2]

Killed me hahahahaha. Dave said "nope"

[@random-nz7dy]

"yeah it's, its-" *click* 😂😂😂

[@jimmym1782]

20k?, I have 260k in debt

[@SAreamusic1]

135k here!! Yes 20k is so doable.

[@aiko3423]

I really needed this video today. I've been watching about why people do not pay off their student loans....

[@DeRothschild]

I say drag it out with income based repayment plan. You only pay 10 to 15% of discretionary income. INFLATION IS A DEBTORS FRIEND! The government will forgive whatever balance is left after 20 years.

[@stephencaramenico8698]

Maybe. No one knows if that will happen. No one has reached the 20 year mark. We will see in 2027.

[@thaodao]

20 yrs for undergrad and 25 yrs for grad school loan. Huge difference when it is 25 yrs.

[@EricSmyth2Christ]

Wait so borrowing money to gamble is a bad idea???

[@k.alipardhan6957]

yes, real estate is bad....

[@crazydog3307]

only if you lose XD

[@chrisd6736]

They’re not taking into account taxes. If you have a marginal tax rate of 35% then it would be beneficial to put extra money in a tax-deferred acct rather than pay down a federal student loan faster. That’s an up front tax savings of 20% which is riskless. Plus whatever % you make in your investment. Would you rather have more money in the long run or be debt free faster? It’s a personal choice and there is no easy answer to this question.

[@thomaseatspomus]

I’d prefer more money 🤷🏻‍♂️

[@SchoolofPersonalFinance]

What if the student loan debt was $ 200,000? Should he still wait to invest? It might take him a decade to pay that off. I tried to answer this and do not think there is a blanket answer for everyone.

[@signorpops8520]

School of Personal Finance - Rich McCormack, CFP I owe 230000. I pay 2800 a month. Still have 9 yrs to go. talk abt adding money to pay it off. It’s hard .

[@chrisstaub5880]

Dave probably would say to go ahead and keep investing if it really would take a decade to pay it off. I don't remember any videos of his show where he gives an exception to pausing investing, but his books do say there are some rare occasions where someone should not do that.

[@chrisstaub5880]

@Sponge Bob Yes, I know that. That is why I specified that he will allow for exceptions under certain circumstances. He does say that most people should pause all retirement contributions until Baby Step 3 is done, but there are rare occasions where this might not be a good idea.

[@jala22]

Why does Ramsey say student loan debt but not mortgage should be paid as quickly as possible? Why is mortgage debt more okay? In terms of risk, isn't defaulting on a mortgage more risky than defaulting on student loans? (assuming it is federal, not private). From my understanding, you cannot declare bankruptcy on either. I've been preaching Ramsey's message for years, but now I am starting to grow bitter about paying the large corporations who were ripping me off to being with (student loans for exorbitantly priced education) before paying myself (retirement, investing, house, future etc.). I'm really in a bind and trying to find the light again...

[@AldoFelt]

Times have change. Whatever worked 50 years ago i dont think it will work today.

[@greenAbbot]

"Hi Dave, I'm considering doing exactly the opposite of what you teach and I was just hoping to get your opinion about that." I think Dave should have an April Fool's show every year where he takes a bunch of these calls and just says, "Yeah, you should invest while in debt. Why didn't I think of that 20 years ago?" I'm not saying I'm 100% on board with everything Dave teaches, but I wouldn't call him to get his "opinion" on whether I should ignore his system.

[@joemilleriv]

Well I needed this call because I’m in a similar situation. I’m 20 with $10k in student loans and leaving for the Air Force in August, so I was considering doing both at the same time, paying off my debt while opening up an investment portfolio. I’m still teetering but I’m leaning more towards just getting this debt out of my life as fast as possible so I can increase my cash flow to those investments. I’m just thinking ab the compound interest I could potentially be missing out on

[@ashleyzych5366]

If you have the money for the loans to pay it off why would you not pay them off?? Like you can invest and pay off your loans why wouldn’t you!

[@deathsoulger1]

Here in Newzealand Student loans are Interest-Free, they are however a payday loan. That's why I Invest while I still have a student loan, because there is no incentive to pay it off early.

[@Manatti06]

When I listened closely it sounded like the guy started to say - "I have the money to pay off the debt and it's in a IR... (then Dave cuts him off and says ohh great) ...A." He'd be pulling his money out of retirement to pay the 20k for the student loans. Doesn't quite make sense.

[@moncealisolis6860]

Saving for retirement doesn’t come until baby step 4 meaning if you have any, you use it as “regular savings” and put it towards debt. Baby step 4 you will max out on retirement.

[@nigel0]

I was waiting for that mute button

[@bindingcurve]

Student loans are even worse, they are incredibly hard to have forgiven or discharged.

[@michael43567]

4:49 lol Dave muted the poor fella

[@fkillah]

His show, plus dude interrupts Dave

[@timroane3547]

That was a super artful adaptation to audience and display of reasoning depth and makes perfect sense, couldn't help but comment lol

[@rmac8012]

When people come on here to debate Dave’s suggestions, it doesn’t benefit the people who need help the most. People in distress with their finances discernment may not be the best because they just want relief, not additional ideas to put at risk what little they have left to lose.

[@nonenone2641]

You are SO right, the "financial geniuses" here really muddy up the waters for those looking for info. Whenever you hear "leverage", I think, "Here we go again..."

[@orthodoxNPC]

Life is risk, take the risk and get PAID. If you don't need to INCREASE your leverage in the near future paying the debt is dumb.

[@jeanp.5929]

This finance science is above my head but I do understand get rid of your debt.

[@patrickd5274]

The beta risk will never be enough to sway a 3.5% student loan over a fund return. The math is literally impossible based on the past 50 years of returns as a benchmark.

[@michaelcerean1990]

Fast forward 2 months later (April 2020): Aaaaand it’s gone

[@AugustineKar]

That's what I'm saying. Not sure I agree with the advice in this video.

[@rajazayat7296]

I do not have a degree in Finance but isn't a brokerage account is an investment account? So the guy already had a 401k, Roth IRA and a brokerage account and then Dave said he should payoff student debt first!! The guy already was investing and made more than 20k, enough to payoff student debt, in that brokerage account.

[@StokeseyHD]

Let Dave talk dude

[@rodeo626]

Dave needs to let him talk

[@joemilleriv]

Im in a similar situation. I’m 20 with $10k in student loans and leaving for the Air Force in August, so I was considering doing both at the same time, paying off my debt while opening up an investment portfolio. I’m still teetering but I’m leaning more towards just getting this debt out of my life as fast as possible so I can increase my cash flow to those investments. I’m just thinking ab the compound interest I could potentially be missing out on

[@matthewlesko936]

Reach out to consultant dB Mark on instagram @dbmarkconsult or telegram [phone]. I was $10,000 in debt, I was able to pay off almost all of my debt off but noticed my credit score stayed the same!! Thanks to consultant dB Mark he helped me improve it!! Thank you so much! His company is the best

[@itisim]

10 k will be easy i paid down 43k to 25k and still fighting

[@bigbone06]

*Gotta get rid of that ol ball and chains!!!*

[@ErnestoCruzBey]

Never borrow money to make money ?? But what if i buy a bussiness and overtime with the income generated from that business pay it within 2 years ?? Ive seen plenty of people doing that.

[@Zichqec]

Never borrow to start a business. He's talked about that specifically a few times, and how, IIRC, the majority of small businesses close because their debt catches up to them. Just don't risk it, don't start it with debt. Don't pay for things with money you don't have.

[@dicksonlaw5263]

The problem comes when you borrow as if that "pays for itself in 2 years" projection was gospel, but the actual income falls short and the debt doesn't go down. You seem not to have a clue what survivorship bias is.

[@crazydog3307]

That's how the rich play the game, we aren't allowed to do that

[@puzzled9012]

I'm a bad boy and invest 20% of my income and double up my student loan payments.

[@investmentfuturefinances5527]

Great advice Dave 👍👍

[@ThomasBomb45]

Does Dave Ramsey ever explain why he views all debt as bad other than a mortgage? From my point of view, debt is debt, so what makes mortgages different? I know mortgages tend to be around 3-4% while other loans may be higher, is that it?

[@nickinsanebane]

I'm still confused though. If I had 20k in student loan debt and I could make the payments AND put an equal amount (or more) into mutual funds and get that money to grow. The longer that money SEPARATE from the money going to the debt (and federal loan as long as u make the payment there's no risk involved? If u already have debt isn't that what risk is all about? If u have debt u have already failed the risk part and it's there. So I guess I dont understand why you wouldn't want at least some money GROWING. Like if you were gonna make the payments anyway how does that change anything accept not getting money to grow. That's all I'm hearing hear. Someone help?

[@paulfly3121]

The bottom line is to get rid of the student loan debt ASAP. Don't get wrapped around the axel with the math. You simply don't want to have student loan debt hanging around years down the road when you are trying to buy a house, maybe start a family, live your life...

[@apophispnw5717]

Dave hangs up on anyone who's not a Millionaire.

[@JiisTube]

Kid's doing great but gotta work on learning to listen. I been there

[@Michael-vf2mw]

Not sure what you mean. He seemed to be listening fine to me. Just the fact that Dave likes to dominate the discussion with his little one-way mute button does not mean the caller wasn't listening.

[@shawnsgirl4ever1]

You’re best wealth building tool is your income but what if people like 48 million lose that income. You’re best wealth builder is being an entrepreneur!

[@cmccarrick10]

He also didn't factor in the cheapening of debt due to inflationary pressures. Why was that left out of the equation?

[@lombardo141]

This video was made 4 years ago when interest rates was basically Zero!!!

[@julio5727]

Doesn't seem like any of them took a finance class.

[@TheDeeStain]

And just like that paid off the 14k based on OUR BOY Dave Ramsey!

[@Ashley-dt7tv]

I don't qualify for FASFA, and have been struggling to find scholarships as most are based on FASFA and financial need or if not are for other majors or veterans and so on and so forth. My major is English only because education major would have me take double the classes which would be more money and time. I can finish with my B.A in English and just challenge the teaching exam and go through the alternative route option. The college I attend is the closest to me in-state and the cheapest in the area as the rest are private schools. Tuition is $202 per credit hour and I need 39 credits to achieve my degree. Granted if I take a loan it would be on the lower end compared to most but I'm in debt now and I'm currently working on it so I'm very wary of just dumping more onto the pile. Everyone around keeps telling me that I could manage to pay $200/month to pay off the debt but they either get financial aid or have an income well above what I make currently or would start off with including my mom. However once I finish school, I wanna travel, I wanna move out and etc but how could I do that if on top of my bills I have to shell out extra hundreds of month if I could avoid it. I'm in debt now and struggling with my debt--about $3k, somewhere in that ballpark and I don't ever wanna fall where my debt gets the better of me again and it puts me underwater. I'm trying to plan it out and am getting ready to pick up a second job but its rough and discouraging when the people around you, mind you their intentions are good, are giving you push back. Urgh.

[@WCGwkf]

Hope you get a very well paying teaching job. I wouldn't bother getting a degree for a job that doesn't go over 70k, particularly an English degree.

[@Ashley-dt7tv]

@@WCGwkf Thank you, and I definitely wish but a Bachelor's is required especially so since I wanna teach a specific area. An English degree isn't as useless as some people think especially for areas like marketing, PR, communications, and publishing.

[@lightheart2183]

...Yeah. The 22k I put in my 401k vested and is now 44k because of the match. But if I had sent that to my student loans plus all the money I've sent to them during the forbearance. I'd be student loan free this year instead of 2 years from now...

[@matthewlesko936]

Reach out to consultant dB Mark on instagram @dbmarkconsult or telegram [phone]. I was $10,000 in debt, I was able to pay off almost all of my debt off but noticed my credit score stayed the same!! Thanks to consultant dB Mark he helped me improve it!! Thank you so much! His company is the best

[@kevinperlow4595]

Bruh. Homies living at home with his parents still? 😂

[@zachariahbartolomeo9776]

Dave liked him right after he said fnance

[@ndustries6323]

So you should pay off student loans before saving for retirement too?

[@chrisstaub5880]

If you're following Ramsey's Baby Steps, yes. You should not do any kind of retirement savings/investments - and no, it doesn't matter if there's an employee match - until after Baby Step 3, which means you have paid off all non-mortgage debt and have a 3-6 month emergency fund.

[@joecurran2811]

I'm from the UK where the student loan expires after 30 years. Should I pay it off or just pay the minimum as I go along?

[@munhl]

Joe Curran How much do you owe?

[@o__c]

Spreadsheet it out and see if you have any chance of paying it off in 30 years time. If not, definitely don't overpay. If there is a chance you will pay the whole thing off, have a think about overpaying, but remember ~90% of people won't pay it off so shouldn't bother.

[@icefishing804]

I will not, making 50 percent return on my money. For the regular person yes.

[@Dieje]

How do you make 50 percent on your money

[@icefishing804]

Real estate and selling products

[@ClassicMan33]

Ice Fishing People are making more than that too.

[@icefishing804]

One of my investments is infinite cash on cash return, however still not wealthy, but better than paying of 4 percent interest.

[@twincherry4958]

@@ClassicMan33 how?

[@raymondblake5765]

Where can I find a resource on this 'beta' factor?

[@elonmusk8667]

I didn't major in finance and even I knew the answer to this.

[@newbiedebater]

I'm curious too if we're investing making 12%...

[@alexc5369]

Apart from the debt pay off being 100% risk free/guaranteed return, it is also tax free, lets say your car payment is $600 P/m, you have essentially made an extra $600 in your pocket P/m, to earn 600 from investment income, you now have to regularly give a portion to the tax man, which adds up.

[@Dangerous_Nerd]

Loved Everyday Millionaire; where can we get the complete academic version Dave alluded to?

[@JJ-ok9ds]

Michael Saunders ^^^

[@iakid]

why isn't paying off mortgage not in baby step 2 ? if he pulls out his investment, thats a lot of loss in compound interest

[@lifestylesfitness9403]

I don't pay it off first and my investment pay it off for me my opinion

[@fluffyisyermom7631]

well you succeeded while many others lost and are drowing in debt. the point of his talk was to point out that the risk in not paying the debt off first was a risk. a gamble, akin to playing craps and coming out ahead after a couple of hours. in both scenarios risk wasnt taken into account.

[@VivaCohen]

But what you have a LOT of student debt and paying it all off will mean you won't be able to invest until you're like 40?

[@chrisstaub5880]

Dave would probably allow for an exception if it really would take that long to pay off debt. The pause to investing, as well as having only $1,000 as a starter emergency fund, generally comes with the assumption that you'll take no more than 2 years (maybe 3) to clear out all your debt.

[@crazydog3307]

I've still got about 15k in student loans i think, still not able to find a job that pays enough yet yearly to justify paying it back yet, probably in default but i guess ill just focus on keeping food in the fridge since thats about all i can do

[@crazydog3307]

@ thanks~ things are pretty much the same, got another job, pays less, but better work/life balance, and ive been learning to budget better lol

[@sadieesther9721]

Regardless of the math, you would make more putting your monthly payment into investments than you could with the payment and then investing with what’s leftover

[@stevenbowdich6716]

Dave is forgetting that many investment accounts like retirement accounts have maximum amounts you can put in per year. Not only do you lose out on the interest but you permanently lose out on avoiding the taxes with roth accounts. I max my roth 401k and roth IRA before even putting extra on debt.

[@matthewlesko936]

Reach out to consultant dB Mark on instagram @dbmarkconsult or telegram [phone]. I was $10,000 in debt, I was able to pay off almost all of my debt off but noticed my credit score stayed the same!! Thanks to consultant dB Mark he helped me improve it!! Thank you so much! His company is the best

[@RLWSNOOK410]

So if you adjust for beta does that also take into account the tax savings you get for investing in 401k’s

[@cherrytung]

NOTIFICATION SQUAD!

[@cherrytung]

@Ebony Jones as many times as I am

[@kylercook7968]

This is impossible for my wife and I. It would take us 7 years to pay off the debt because she’s staying home with our kids, and we still plan to have more.

[@chrisstaub5880]

Well in that case you certainly shouldn't stop retirement contributions because you're not really following Dave's plan anyway. Dave's recommendation to pause investing does come with the assumption that you're following the rest of his suggestions as well. If you were, he would likely tell you that your wife does not have the luxury of staying at home because of the amount of debt you have. Of course if you prefer to do your own thing and don't mind taking a while to get rid of debt, that's certainly up to you.

[@kylercook7968]

GreeleyCPS agreed. Dave’s plan is for people that can knuckle down and pay off all their debt in around two years.

[@vivianaalvarez9376]

Please add subtitles Dave 😭

[@Michael-vf2mw]

Does anyone know where I can find this Everyday Millionair study he keeps talking about? I'd like to study the methodology.

[@Sovnarkom]

With this smart beta logic, David would be supporting government bonds as an investment because of the risk adjusted return. Your loan is essentially a short position on fixed income and if you reduce risk by reducing exposure there, then you can also increase it by adding a fixed income position to your portfolio.

[@Yupthereitism]

Well, this is 100% wrong advice

[@nathandavis8111]

This is just wealth apologist logic. I personally owe less than 40k total debt, but wealthy dorks like this are detached from reality. 'Chicken, bean and rice' is more appealing to me than the average Joe but people aren't monoliths.' Crazy thought, tax incentives for the time you spend 0:06 trying to fix up you car/house/chicken coups/unfinished thesis as a write off. These rich dinglethorps do it all the time, shouldnt the average person do the same?

[@Johnnybravo369]

When you pay off student loan is it considered a close account and drop credit score?

[@lombardo141]

Yes

[@ReMz10184]

This is why Dave frustrates me. This young man is smart and has more to say, but for the sake of his "image" he keeps cutting him off before he can get a word out. It is rude and hard to listen to. Let the young man finish a sentence, please.

[@starpointstudios]

He does this because he has to keep the show going with a certain amount of time. I work in a studio with live interviews and we HAVE to keep to schedule which means it can look like we cut people off. It's not about personal image in the least.

[@Michael-vf2mw]

@@starpointstudios uh huh. Well, it hurts your image regardless.

[@sabatosorice7357]

Investing is better. You could toss all your money into SPY and greatly outperform your student loan interest rate in the long term guaranteed.

[@kylejune7094]

He should keep the money in his brokerage account. He's already ahead of the game financially, maxing out his 401k and roth IRA. I'm in the same boat as him. Paying back his 20k student loan at the standard repayment rate isn't that risky for him to do. No need to rush to pay it off as quickly as possible. I wasn't convinced by this video and will continue to invest instead even though I could pay off my 20k in student loans today.

[@evanserickson]

How much is your monthly payment? What if you lose your job?

[@upfulsoul826]

It's dumb to keep student loan debt. Warren Buffett would pay off the student loan too. He like Ramsey, teaches to avoid debt at all costs. Invest your savings.

[@erikrohr4396]

I would also continue to invest rather than rush to pay off the student loan. The math makes sense and if you keep some cash reserves, it's not very risky.

[@upfulsoul826]

@@erikrohr4396 What math? You can't predict what investments will yield.

[@erikrohr4396]

@@upfulsoul826 That's true, but according to Dave's claim that mutual funds make 12%, that's a better return than the interest you'd pay on most student loans.

[@prettybrwneyez7757]

I'm glad Dave muted him....he was getting on my nerves talking over Dave!

[@AnnMitt]

Kid interrupted Dave too much

[@david_ngo]

Sorry but you cannot just say all debt has more risk and not tell us how to calculate that risk with respect to stocks and call that logical. You need to give more details and calculations. And then his second point is that rich people have more cash flow to invest. So isn’t investing better when you have more in there than paying off debt too soon? I don’t buy this at all

[@RemiBeauty87]

Dave and his cheap unfunny jokes when giving people advice...🙄

[@EricSmyth2Christ]

It's subjective for sure

[@kunalsab7805]

Set up call

[@cherrytung]

*first?*

[@ClassicMan33]

The debt on student loans is tax deductible. So, you’re actually not paying any interest. I wouldn’t pay the debt down, unless I would still have money to be able to invest. Invest your dollars, get a return, and be patient.

[@adamrvick]

Deduction begins to phase out at $65k/year income and completely phases out at $80k. Sounds to me like this kid will phase out. Pay off the student loan debt today and then invest and be patient.

[@twincherry4958]

@@adamrvick these are the type of comments and responses I love

[@SAOrules]

Ramsey is full of it. I paid off all of my student loans on full, and was still able to save and invest.

[@Zichqec]

Then you're in the minority, and he's not talking to you. There are a lot of reasons to pay down your debt first, a big one being that for most people they need that focus and to make a lot of progress in a short period of time or they'll get discouraged and always have it weighing them down. Laser focus, one thing at a time, has big results for a lot of people if they can commit to it.

[@delicatessen5670]

Must be nice