Pay off your student loans.

1) Peace of mind and closer to debt free. Can't place a value on that.

2) Yes, your interest covers the loan payment. But you still make interest after paying off the loan.

Interest on 500k @ ~6% is making you $2400. Less $890 for student loans you are netting $1510.

Pay off $89k in student loans and that $890 monthly goes away. $500k less $89k for loans means 6% interest on $411k, or almost $2k monthly.

Paying off the student loans nets you $400+ a month more, right now.

For the other stuff, definitely don't pay down house. It's free money. Don't worry about a potential car in three years, cross that bridge when you get there, your situation will be fluid and you'll have plenty of new options to consider then. Not worth worrying over right now.

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Posted by lsu for the win

Member since Jun 2022

837 posts

Posted on 2/7/24 at 7:46 am to Fe_Mike

Good post. Nice work baw.

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Posted by masoncj

Atlanta

Member since Jun 2023

289 posts

Posted on 2/7/24 at 8:12 am to Fe_Mike

Good solid advice here.

Definitely pay off student loan 100%!

Take the remaining $400k or so and get you a fully funded emergency fund as well.

You didn’t say what your income level is but $30-50k you can keep in the money market fund

Take remaining $350k and park it an S&P index fund and don’t look at for 15 years.

Almost 100% chance you are gonna like the results …should be worth well over $1m in 15 years

This post was edited on 2/7/24 at 8:15 am

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Posted by tgdk11

Member since Nov 2017

1087 posts

Posted on 2/7/24 at 11:12 am to Fe_Mike

Great advice. Only thing I'd add is 1800-2k a month on no effort funds is 100 times better then buying property and adding landlord hassles to your daily / weekly/ monthly stress. Sure you'd potentially add long wealth, but what's its worth to your time, effort, stress. That's a mortgage each month just from the interest your getting.

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Posted by Gings5