Get my 5-day email funnel that generated $400,000 from a single launch

Want an email sales funnel that's already proven to work? Get the entire word-for-word email funnel that generated $400,000 from a single launch and apply it to your own business.

Yes! Send me the funnel now
Start Here: “The Ultimate Guide to Personal Finance”

Ben needs your help

12 Comments- Get free updates of new posts here

0

Here’s an email I just got. It’s a good one. Instead of just trying to answer it myself, I thought I would put it on IWillTeachYouToBeRich and see what other people think. Let’s try to get a few good responses up here.

Ben Clark writes…

My question is simple. You write so positively about people our age investing (and investing aggressively), and I’ve seen the calculations and it makes a truckload of sense. However, it has been my experience that most of us have student loans and credit card debt — in other words, we’re in the red, despite what little cash on hand we may have.

If I am paying interest on student loans (only about half of my total debt is the interest federally subsidized), and I’m paying interest on credit cards each month (despite your advice to pay it off, that’s harder than it looks), shouldn’t I take the money I would invest and instead try to pay down the debt?

If that’s the case, what advice would you give to someone who will likely be in debt for $30k-$40k in a few years? Am I just S.O.L. when it comes to any sort of financial security in the future, or can I still try to get a leg up?

Thanks for all your help, and thanks in advance for any advice you can offer regarding this. I’m sure I’m not the only one wondering this!

What do you think?

0

Related Articles

401k

401(k): The single best way to grow your money

How would you like free money? That's not a trick question. For millions of people, free money is up for ...

Read More
How to cold email VIPs and get a response

How to cold email a VIP (and actually get a response)

I used to be terrible at getting busy VIPs to respond to my emails. Years ago, I kept emailing Seth ...

Read More

12 Comments

0
 
Sort by:   newest | oldest
Michael
11 years 1 month ago
My thoughts: 1) If your employer offers a decent match for participating in a retirement program, invest just enough to get the maximum match. 2) Build up a small (~$1k) cash Emergency Fund. Fast. 3) Once that’s done, pay off the debts as fast as you can. Focus on credit cards, auto loans, and other non-tax-advantaged and high-rate debts. Student loans and mortgages tend to be tax-advantaged in some way; make minimum payments on these until the other debts are gone. 4) Compound your payments (use payment money from previously-dispatched debts) and attack those student loans. 5) Finish the Emergency… Read more »
Chris
Chris
11 years 1 month ago

I say pay off the debt. It’s unlikely that any investments would earn more than the credit card interest.

james
james
11 years 1 month ago
This sort of decision making can be a very hard one. However, There are at least two points your reader might want to consider. 1) First, what his goals are. The first step to financial planning is goal setting. Having a measureable and achieveable goal is a prerequisite for debt reduction. I am certain your reader will find that when he knows where he wants to go, a lot of the psychological barriers in getting there will be removed. 2) Second, paying credit card debt has immediate and substantial returns. Credit card debt has two major disadvantages. First, it often… Read more »
Jose
11 years 1 month ago
My Advice: 1) Take control of your finances. Learn to live below your means so that the balances don’t increase any more. (you may have done so already). DO NOT SPEND A CENT THAT YOU DO NOT HAVE. Get out of the debt-addiction. 2) Develop a “pay myself first mentality”. You invest first. You pay debt. And then with whatever is left, you pay housing, food, transportation, and all other expenses. Of course, you have to figure out the correct and comfortable levels before you start. 3) Improve your credit score if you have not done so. How? Make sure… Read more »
Will
11 years 1 month ago
“a) Pay double the minimum payment on your credit cards and student loans.” How can you justify paying a cent more than the mininum for student loans? You will not be getting lower cheaper debt than your student loans ever. I think a good rule of thumb is to never pay above the minimum for student loans (provided they are very low). Bearing debt isn’t a bad thing, it’s isn’t a crime and the stigma attached to it is from days when people were much less resource savvy than they are today. Paying $100 today towards your student loan saves… Read more »
Jenny
Jenny
11 years 1 month ago

Pay off the credit card first. It’s unlikely that any investment will earn a higher return than your credit card interest rate.

After that, invest if the interest on your student loans is lower than what you think you can earn if you invest over the lifetime of the loan (this is probably the case).

Last, pay off the student loans. Yeah, they’re massive, but they’re probably “cheap” compared to your credit card interest + fees and the opportunity cost of not investing.

Jonathan
11 years 1 month ago

A major lesson of this and other financial advice columns is to get in the proper mind set – the mindset of moving your money wisely. Even though you have little money, you can still make out a budget each month and see how much you’re spending on consumable goods, and if you can spend more on reducing the debt. As a student, being frugal can pay off later. Get rid of the credit card debt any way you can…. consolidate it into a cheaper rate from a bank if you can.

~Dawn
11 years 1 month ago

***Setup an emergency fund
***Max out your employer’s matching part of the retirement fund.
***Start paying down the debt with what you can and snowball the payment to the next debt once one is paid off.
Just my 2¢

Marc James
11 years 1 month ago

I am a 19-year-old college student and am frankly disgusted at how so many of my peers get into debt. I realize student debt is often unavoidable to those whose parents don’t pay for college (mine luckily do), but what there is no excuse for is credit card debt. I only have a debit card and therefore I only spend what I have. The best way to get out of debt is to avoid it in the first place, and that involves common sense, something I fear a lot of young people lack. 🙁

Rahul
Rahul
11 years 1 month ago
1) Just pay off as much as you can of your credit card debt first. 2) Then pay off the next loan which has the highest interest rate even if they are student loans. Work out on a excel sheet or whatever how much you end up paying in interest and how much tax benefit you really get. When I did mine – I was getting only $300 in tax saving but still paying $1000 per year. Not worth it. 3) As Ramit mentioned in a previous post – do some gigs to make some extra cash. Every little bit… Read more »
Nikki
Nikki
11 years 1 month ago
When in a whole stop digging. Start by living below your means. Stop charging your expenses OR only charge what you can pay off at the end of the month. Save 10% of your income. 10% because it’s big enough to make a difference in the saving ie. you only have to save 10 times to see your paycheck in the bank AND it’s small enough to not hurt. This is your “car can’t start and needs a new transmission” money, not the “I have to go to the doctor for a checkup but failed to budget it” money. Put… Read more »
Ben
11 years 1 month ago
Everyone: thanks for the great advice! I do have some responses to a few specific issues. ** Just a reminder, I am still a grad student, and I’m about to start a PhD program (which means another 4+ years of being a full-time student). While I hope that I’ll get a nice-sized paycheck as a professor, this means that I am forced to live beyond my means at the time being simply because I don’t have the time to work 40 hours a week. (Last year, I only earned about $15k as a part time worker — barely enough to… Read more »
wpDiscuz