facebookWhat should be my priority? Paying off my student loan or start investing? - Seedly

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Anonymous

28 Sep 2019

SeedlyTV

What should be my priority? Paying off my student loan or start investing?

Not sure if I should get rid of my debt first OR start investing. Any advice?

SeedlyTV S1E01

Discussion (7)

What are your thoughts?

Guo Hao Teo

Guo Hao Teo

07 Jun 2019

Level 7·Self-Taught Enthusiast at Personal Finance

I would think that paying of your student debt would be the top priority.

Because interest works both ways:

  • Up: When you have positive returns it will compound
  • Down: when you have debt, your interest of 1-2% will grow as well

View 1 replies

Since paying off your student loan is definitely reducing your liabilites, investing on the other hand does not guarantee a return higher than your interest costs on student loans - unless you can find a financial instrument which can guarantee a return of that higher than the interest costs (I believe is about 4.2 - 4.5%), which honestly such financial instrument is almost non-existent - and hence clearing student loan is a surefire way of improving your financial status!

All the best!

P.S: I am currently also agressively clearing my student loan... less than 50% more to go!

Loh Tat Tian

Loh Tat Tian

05 Apr 2019

Level 11·Founder at PolicyWoke (We Buy Insurance Policies)

Bouncing off the Two answers given, maybe I introduce a Concept shared by many (credits to them).

W...

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