I manage to save up $25k and will be taking my degree, should i: 1.use it to pay tuition fees? 2.take up student loan (with interest that adds up) and invest this money instead (like REITs/ETFs etc)? - Seedly
 

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Asked by THY

Asked 2w ago

I manage to save up $25k and will be taking my degree, should i: 1.use it to pay tuition fees? 2.take up student loan (with interest that adds up) and invest this money instead (like REITs/ETFs etc)?

Im 21 and took a gap year after poly, i have alot of side hustle and started saving in my poly days so i manage to save up this amount but not sure what i should do with it, any advise?

also you can give me your opinion if taking up a degree is worth it, looking at IT/ finance :)

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As always, the interest rate on your debt (i.e. student loan) is guaranteed while the returns from your investment will always be non-guaranteed.

Assuming that you take up a local bank's study loan, the typical loan rate will be at 4.75% per annum. As a result, your investment needs to beat the market consistently every year in order for you to be able to afford the loan and perhaps have some spare cash left.

Furthermore, you have a short timeline of 4 years (based on your degree) to ensure that the market works in your favour. In the event of a financial crisis, will you be happy paying the interest on your loan?

To solve this, we need to have a complete understanding on our cashflow. Through this process, we will understand our earning ability and spending habit. Here is a guide to help you: https://www.blog.pzl.sg/understanding-your-personal-cash-flow/

From there, understand how you can make this into a sustainable process by creating a budget for your school fees and your investment. The best way to do this is via automation and this is how I do mine: https://www.blog.pzl.sg/how-to-create-a-monthly-budget/

(Don't take my word for it) A degree is merely a piece of paper that gives you an entry into your first job. Hence, spend quality time and effort to know what you want, what you are good at, and what you won't mind doing for the rest of your life - this will be a degree worth taking up. Ultimately, we only live once - be kind to yourself.

Here is everything about me and what I do best.

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