304: Finance Friday: The Fastest Way to Pay Off $300k in Student Debt

BiggerPockets Money Podcast

BiggerPockets

Education, Investing, Business

4.5 • 3K Ratings

🗓️ 27 May 2022

⏱️ 73 minutes

🔗️ Recording | iTunes | RSS

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Summary

It’s a strange time for student debt. On one hand, many college graduates are electing not to pay their student loans while they sit in forbearance. On the other, some debtors are choosing to take advantage of the zero-percent interest period as a way for them to pay down their loans faster. While neither of those choices is inherently wrong, they may also not be right. Today’s guest, Colton, finds himself in this position with a good $300,000 worth of student debt. This number encompasses both Colton and his wife’s student loan payments. A good portion of their loans can be forgiven over twenty years, so which loan balance should he handle first? Thankfully, with Colton’s sizable take-home pay, he has options that many wouldn’t think of. Scott and Mindy debate on whether or not paying off debt early, waiting for forgiveness, or investing instead would be the best course of action for Colton. Regardless of whether you have student debt, a car loan, a medical loan, or any other type of timely payment due soon, this is a calculation worth performing. Scott and Mindy also take a look at Colton’s diversified portfolio of assets, arguing that diversification could be leading him down a long path to FI, instead of helping him gain financial footing. In This Episode We Cover How over-diversification can set you back from reaching your financial goals Why the “grind to FI” doesn’t have to destroy the life you love Real estate investing as a hedge against large amounts of personal debt Student loan forbearance and forgiveness, plus when to start paying back your loans Private mortgage insurance and the multiple options you have to get rid of it Live in flip tips and how to keep your sanity while renovating your primary residence And So Much More! Links from the Show BiggerPockets Money Facebook Group BiggerPockets Forums Finance Review Guest Onboarding Scott's Instagram Mindy's Twitter Apply to Be a Guest on The Money Show Podcast Talent Search! Subscribe to The “On The Market” YouTube Channel Listen to The “On The Market” Podcast: Spotify, Apple Podcasts, BiggerPockets Check Out Mindy’s 2022 Live Spending Tracker and Budget Student Loans Update: Repayment, Refinancing, and Potential Forgiveness w/ Robert Farrington Finance Friday: Using Student Loan Forgiveness to Catapult FI w/ Sammie Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Welcome to the Bigger Pog its Money Pied Cash Show number 304, Finance Friday edition,
0:05.3	where we interview Colton and talk about making a prioritized set of investment and debt paydown decisions.
0:12.0	Here's a problem noticing overall about your situation.
0:15.1	I've got student loans here, some that I might pay off, some that might be forgiven.
0:18.7	I've got this cash position, I've got a little bit in 401k's, I've got this live and flip project I'm doing.
0:24.2	I'm spending my free time flipping furniture that I'm driving around, picking up and sending around.
0:31.2	This, I think what I would advise is you make a prioritized list of these opportunities and then go more all in on your top one or two of them.
0:43.2	Hello, hello, hello, my name is Mindy Jensen and joining me today is my co-host, Scott, not just another pretty face, Trent.
0:52.2	Thank you as always for the great look and introduction Mindy.
0:55.2	Scott and I are here to make financial independence less scary, less just for somebody else to introduce you to every money story because we truly believe financial freedom is attainable for everyone, no matter when or where you're starting.
1:08.2	That's right, whether you want to retire early and travel the world, go on to make big time investments and assets like real estate or start your own business.
1:14.2	We'll help you reach your financial goals and get money out of the way so you can launch yourself towards those dreams.
1:18.2	Okay, before we get to the show, let's hear a word from today's show sponsors.
1:22.2	Scott, I am excited to talk to Colton today.
1:26.2	He has a great set of circumstances with a little bit of a monkey wrench.
1:31.2	He makes a great income, but he's got some student loan debt to tackle.
1:36.2	Yeah, I, I, I, Colton has a tremendous cat.
1:40.2	He has positive cash flow, but he's got huge amounts of student loan debt.
1:44.2	He's got a live in flip going on. He's got a side hustle. His wife's a veteran area. They're about to have a baby.
1:49.2	There's all these different convoluted things and they're tugging at different financial strategies.
1:54.2	And today we have to kind of unpack that convoluted situation between life debt investment options, House hack, live in flip and two different careers and to come up with a prioritized,
2:06.2	prioritized set of initiatives and to design a financial plan around that.
	...

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