Pay off student loans versus invest in real estate?

[Mohammad Haidarasl]

I'm back on BP after a long break. I have a lot of federal student loans (sigh) that is currently sitting around 200 grand. I do want to invest in real estate but with such debt, I'm unsure if it's smarter to get started or just aggressively pay off debt and think about real estate in the future. Any guidance/insight would be appreciated. Thanks!

Edit: Just realized I had asked this question years ago. Still would love further insight to see whether or not the advice still stands or if anybody has any further input. Thanks!

[Nathan Gesner]

Quote from @Mohammad Haidarasl:

Here we go again.

Pay off the debt. Nobody should invest until they are debt free and have complete control of their finances. He who is faithful with very little will be faithful with much.

If your debt is at 5% interest and you can earn 10% interest with an investment, that's 5% growth and the better option, right? Wrong!

1. If you make the minimum payments, your student loan of $200,000 will burden you for the next 50 years. You may think it's not a big deal, but it will wear on you, it will slow you down in many respects, and you will be enslaved to the lender. You better hope they don't come calling. 

2. Use that college education to do the math. Run a scenario where you pay the minimum balance and then invest $200 a month. After you pay off the student loan at age 70 or whatever, then add the student loan amount to your investing. See what you have by the time you reach 80 (if you live that long). Now run a scenario where you put that college education to work to increase earnings and pay off your debt as quickly as you can. Let's say it takes you 10 years to pay off, then you take the same money you've been putting towards the loans and invest it. See what you have by the time you reach 80.

I am not an "educated" man and certainly don't have a $200,000 college degree. What I do have is some basic wisdom. Debt is damaging to your psyche and to your performance. Paying off the debt as quickly as you can is the best option. You will feel better as a man and you will perform better as an investor. Do the math and you'll have your answer.