The most prestigious law school admissions discussion board in the world.
|
 |
 
|
Should I pay student debt or buy stocks?
Poast new message in this thread
Date: December 14th, 2017 2:46 PM Author: Grizzly Institution I make ~100k in a chill midwest job
50k student debt at weighted average 5.8%. Some of the accounts are around 6.5%.
Options:
1) Start paying off the 6.5% loans ASAP. Since these are after tax dollars, it is the equivalent of making 7.5-8% in the stock market before capital gains taxes. 0 risk, 0 effort, 0 correlation to the stock market. Credit score immediately goes up. Refinance the rest at a lower rate.
2) Put the money into my portfolio (BOFI+covered calls, INBK, ALLY, AER) which I think should make 15-20% a year in the long run
3) Use half of new income to pay loans, half into stocks
What would you do? ty |
Date: December 14th, 2017 2:51 PM Author: Grizzly Institution bump (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919175) |
|
Date: December 14th, 2017 2:51 PM Author: mildly autistic vigorous theatre Buy ETH (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919182) |
 |
Date: December 14th, 2017 2:51 PM Author: Crystalline Multi-colored Fanboi (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919183) |
|
Date: December 14th, 2017 2:56 PM Author: insanely creepy ebony trailer park jap (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919220) |
|
Date: December 14th, 2017 3:09 PM Author: Curious sick faggot firefighter (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919327) |
|
Date: December 14th, 2017 3:22 PM Author: maniacal point halford (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919432) |
|
Date: December 14th, 2017 2:52 PM Author: Topaz mad cow disease school I'd probably pay off debt. No reason to expect that stock market will continue to go up more than 5.8% annually, even though it has been going up over twice that in recent years. (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919191) |
|
Date: December 14th, 2017 2:53 PM Author: spectacular wrinkle incel Are you stupid? Pay the debt until you get down to 4.5% interest or less. (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919193) |
|
Date: December 14th, 2017 2:55 PM Author: Grizzly Institution What? The idea is that I'm fairly confident I can pick value stocks that can make 15% a year, even in this market.
The problem is to evaluate the risk/return tradeoff of doing this given that the alternative (paying down debt) is so attractive.
Since I am ~30 years old, even a small misstep here can have huge effects down the road. |
|
Date: December 14th, 2017 2:56 PM Author: costumed rehab potus why are you confident (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919228) |
|
Date: December 14th, 2017 2:59 PM Author: Grizzly Institution If you study those 4 stocks, I should be able to get 8-10% from the earnings yield alone.
If the internet banks continue to grow at their current clip, Then 15-20% is very doable.
As for Aercap, they have a very simple business. Buy a plane, lease it out at a 7-8% yield. Use 4:1 leverage to enhance returns. Their next 5 years of earnings growth are pretty much already guaranteed, because the leases are already signed. When you buy AER, you are just buying a bunch of aircraft at their book/appraised value. |
|
Date: December 14th, 2017 3:12 PM Author: at-the-ready gay wizard Why not start a hedge fund if you're so confident! 15-20% would make you a star! (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919350) |
|
Date: December 14th, 2017 3:30 PM Author: stirring sapphire temple lmao dude
Why 4:1? Why not 40:1?? Juice up those returns!! |
|
Date: December 14th, 2017 3:32 PM Author: Grizzly Institution Haha
BELIEVE
|
|
Date: December 14th, 2017 3:34 PM Author: Grizzly Institution The company itself is 4:1 on the planes, just like a mortgage
I myself am 2:1 with 2.5% margin debt |
|
Date: December 14th, 2017 3:37 PM Author: stirring sapphire temple I’m giving you shit because picking stocks is a fool’s errand. Maybe you’re the next Buffet, but I doubt it. (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919575) |
|
Date: December 14th, 2017 2:53 PM Author: stirring sapphire temple #1
Number two is hilarious. Just do 15-20% returns bro |
|
Date: December 14th, 2017 3:30 PM Author: Burgundy Faggotry Stage Agreed.
Assuming it's true, he's basically asking if he should invest in A or B where B makes ~100% greater returns in a year. |
|
Date: December 14th, 2017 3:37 PM Author: Grizzly Institution Dude
You have to attach a probability distribution to the returns
Say, the continuously compounded return is Normal with mean 15% and standard deviation of like 20-25%
It's not a stupid question |
|
Date: December 14th, 2017 3:47 PM Author: Burgundy Faggotry Stage agreed man, agreed. i thought you were saying that 15% - 20% IRR was a pretty sure thing? (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919671) |
|
Date: December 14th, 2017 2:58 PM Author: Exciting travel guidebook rigpig I would pay off that debt. Investing is a long term thing. Paying off debt will help increase your cash flow in the much shorter term. (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919237) |
|
Date: December 14th, 2017 2:59 PM Author: Vivacious Amber Casino Crypto (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919252) |
|
Date: December 14th, 2017 3:00 PM Author: red drunken jew It seems like you're taking compounding into account for your stock investment but not your debt. Pay off your debt first. (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919259) |
|
Date: December 14th, 2017 3:02 PM Author: Dark place of business buy ETH (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919273) |
|
Date: December 14th, 2017 3:08 PM Author: Grizzly Institution Okay, what is the investment thesis for ETH? Where do I buy it? Coinbase or the Winklevoss Gemini thing? How much into Ether? Ty (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919318) |
|
Date: December 14th, 2017 3:08 PM Author: insanely creepy ebony trailer park jap JFC -- how did you totally miss this train 10 months ago? (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919325) |
|
Date: December 14th, 2017 3:09 PM Author: Grizzly Institution Was in grad school with no income
Did not pay much attention to threads here
Thought all that crap had topped out
From a fundamental value perspective, which crypto is the best? I don't like that crap about it needing 6 days worth of home electricity consumption to verify a single transaction. |
|
Date: December 14th, 2017 3:23 PM Author: insanely creepy ebony trailer park jap Couldnt afford $500 bucks? (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919434) |
|
Date: December 14th, 2017 3:25 PM Author: Grizzly Institution Crypto seemed like bullshit at the time (it still does now) (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919457) |
|
Date: December 14th, 2017 3:26 PM Author: Vivacious Amber Casino Yet you paid $50k for graduate school to land a $100k job (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919466) |
|
Date: December 14th, 2017 3:34 PM Author: Dark place of business (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919543) |
|
Date: December 14th, 2017 3:38 PM Author: stirring sapphire temple Devastating (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919593) |
|
Date: December 14th, 2017 3:58 PM Author: maniacal point halford (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919800) |
|
Date: December 14th, 2017 3:24 PM Author: Vivacious Amber Casino Tezos Cosmos |
|
Date: December 14th, 2017 3:27 PM Author: Exhilarant Idiot Son Of Senegal Wait and buy Cosmos (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919482) |
|
Date: December 14th, 2017 3:29 PM Author: Vivacious Amber Casino (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919497) |
|
Date: December 14th, 2017 3:55 PM Author: Exhilarant Idiot Son Of Senegal hell yeah brother. it's going to be glorious (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919762) |
|
Date: December 14th, 2017 5:47 PM Author: Irate soul-stirring candlestick maker turdskin wait until when? (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34920686) |
|
Date: December 14th, 2017 3:29 PM Author: Bateful university 100k law? (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919502) |
|
Date: December 14th, 2017 3:29 PM Author: Grizzly Institution Non law (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919506) |
|
Date: December 14th, 2017 3:39 PM Author: Cream Cerebral Corn Cake Cop ETH, LTC, some Iota (invest like a grand), sliver of BTC, and go! (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919607) |
|
Date: December 14th, 2017 3:41 PM Author: red drunken jew Put it all in Iota :))) (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919626) |
|
Date: December 14th, 2017 3:50 PM Author: startled flatulent multi-billionaire Buy ZRX (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919706) |
|
Date: December 14th, 2017 3:55 PM Author: red drunken jew option 3: refinance loans. (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919767) |
|
Date: December 14th, 2017 3:56 PM Author: Cream Cerebral Corn Cake If you sell a kidney, I think you get like 8k. That would cover a few months of payments. (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919777) |
|
Date: December 14th, 2017 4:02 PM Author: jet razzle brunch I would pay the debt ASAP if the rate is that high. The odds are against the market beating that on a risk and tax adjusted basis. (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919841) |
|
Date: December 14th, 2017 4:02 PM Author: Bright Comical Hairy Legs professional investor here. you're an idiot. (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34919846) |
|
Date: December 14th, 2017 5:36 PM Author: Chartreuse business firm 1. Discount what you think is a fixed debt cost by the chance that millenials will eventually vote into office politicians who reduce / forgive / provide preferential tax treatment to education debt. And inflation.
2. Discount your 15% to 20% ROI estimate by reality.
3. Compare the returns. |
|
Date: December 14th, 2017 5:45 PM Author: red drunken jew Just do discount by reality.
(Don't disagree just thought it amusing). |
|
Date: December 14th, 2017 5:37 PM Author: Awkward underhanded heaven The interest rate is high enough such that, if you can't refinance, you should focus on paying your loans off first. Thanks. (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34920617) |
|
Date: December 14th, 2017 5:44 PM Author: trip yellow trump supporter PAYE and crypto (http://www.autoadmit.com/thread.php?thread_id=3828996&forum_id=2#34920656) |