College loan debt

8 Replies

With all of the college loan debt I have, would it be smart to start investing now in real estate or should I wait until I have my loans paid off? I have a large amount of college loans but I have a manageable monthly payment at the time. This is honestly the only reason that I have not invested up to this point in my life. 

How long a wait are you talking about.  I just saw the other day that 3% of the people over 65 still have college debt they're paying off!

I'd say get started.  The real estate may help to pay your loans down quicker.  Understand though if you're using bank financing, they're going to look at your finances.  Student loans will count against your back end ratios, just like any other debt for purposes of qualifying for a loan.

What is going to make your money work the hardest for you?  You'll essentially be "earning" whatever interest rate your college debt is at by paying it down, as opposed to earning what I suspect would be a much higher rate by investing.

Besides, you'll be getting a valuable jump on the learning curve by starting now.

Hi @Tyler Shackelford  

It's funny you asked this question, I asked this same thing a couple months ago and got some really great feedback! You can check it out here: Student Loans and Investing

I'm 2 months away from finishing up grad school and I'm right there with you. I've got a mortgage worth of student loans :-/ but I want to invest as well nor do I want to wait. So basically it boils down to how much are your student loans costing you and how will paying those off affect your investing funds? The info I was given ranged from pay them all off to invest now and worry about those later. I decided to go with preparing myself for investing now, so I plan on purchasing my first property early next year and my student loans kick in summer of next year, so I may be juggling both but if investing goes well, I'll be able to generate some income and let that take care of the student loans.

So make sure you choose the best option for you and trust your gut - you know you the best!

Hope this helps!

Thank you @JoJo Diego  that does help. I will look into your posts from 2 months ago. @Jim Piper  that's an interesting stat. I know that I will be paying on these loans for awhile. I just get very worried when it comes to money and juggling too much at once, especially on a teachers salary. What is mainly holding me back at this time is This is all unfamiliar territory. Anything new at first is always scary, especially when it comes to something I'm very stressed about, money. I keep telling myself to jump in and get started. There's no better way of learning than by doing. 

@Tyler Shackelford  I'm a student and Texas A&M and yeah, I understand exactly what you're feeling. If you're serious about getting debt free, real estate can be a great vehicle to build your wealth. Your loans are going to add to your debt to earning ratio, which will effect your ability to get financing, but that's not a big issue. This is something that can help you, especially if money is a factor of your life you truly want to improve.

Now, I would be cautious with this: "I keep telling myself to jump in and get started. There's no better way of learning than by doing."

This mindset can be dangerous in investing, and real estate is no different. Your first step should be to learn. Start reading about real estate, we've got a big list of books to get you started, and listening to the BP podcast would be helpful for you as well. 

@Dylan Jennings  thank you for the input. I am definitely going to wait for about a year to a year and a half before I make any big decisions. I want to save during this time and learn as much as I can about real estate. What are some good books that I could read for someone wanting to get started? I think those would help tremendously. 

@Tyler Shackelford  The biggest eye opener for myself and a pretty popular book all around for investors is Robert Kiyosaki's Rich Dad Poor Dad. Great book to start. I'd also recommend The Richest Man in Babylon by George Clason

Thanks @Dylan Jennings  I will def read those. This is very exciting to think about. I can't wait to get started with investing, but I think waiting at least a year and researching is a good idea. 

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