03 Mar 2020
I aim to pay off my loan in 2-3 years depending on route chosen below.
Need some advice please, should I split income:
1. All expenditure + student loan (no ^ in savings for 2-3 years; will have E fund)
2. All expenditure + student loan + RSS for ETF (around $200)
Also have 1 year before I start work / interest:
3. Should I put ~$1-200 per month x 12 months into RSS now ie interest free period? Will compounding over 10yrs > interest paid from less $ for upfront payment & longer loan repayment
Without a doubt, CLEAR YOUR DEBT ASAP.
You should not be investing before
1) Clearing all your high interest DEBT (Credit card debt/ student loan)
2) Saving up your emergency fund, 3-6 month of expenses is a good amount to start.
3) Get your insurance sorted out (Hospitalisation plans/term plans etc)
Get your financial priorities right and everything else will fall nicely in place
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My stand is simple - clear the loan as soon as possible. This is because the interest rate from the loan is guaranteed while any form of investment yields only non-guaranteed return.
While there may be concern on opportunity cost, the greatest opportunity cost is nothing more than your fear of missing out.
Therefore, create a proper budget and aim to clear the study loan as soon as possible. Thereafter, use the fresh budget from the loan repayment to invest. I'm confident that you will do better at the end of the day.
In case you are wondering, I am a strong advocate for automating my budget. Here is how I do it: https://www.blog.pzl.sg/how-to-create-a-monthly...
Here is everything about me and what I do best.
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If you want to clear it off within 2 to 3 years, spend all your money clearing it. There wouldn't be...
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