Happy New Year, Everyone!
I’ve been thinking about my 2018 Goals since September … you might say, 3 months ahead? Am I crazy?? Nope, not really.
Epiphany Moment #1
I gave away $2000 scholarship to one of the college that I attended aiming at the High School Student that went to my high school. I was disappointed that they only release 1/2 of the fund to the student. What??!! At that point, I was thinking to myself… Should I continue to blindly give the money to the “Corporatized” Foundation, who keep the money instead of release it to the student in need, or should I just help myself, and pay off my own student debt? The latter wins. That’s my goal for this year, 2018. I’m going to pay the heck out of it, and totally get rid of my student loan.
Epiphany Moment #2
I was coming home for a visit, and my sister was going to take a $10K loan to buy a used car at 8% interest rate + GAAP Insurance $900. I couldn’t let that happen, so I gave her a $10K loan at 0% interest rate. I went home, thinking I had to pay 3.88% on my home mortgage, 1.88% on my student loan, but I’m loaning money out at 0% interest rate. Yikes!! Let’s me be my own personal bank, then! hihi ^^
Epiphany Moment #3
It was 1 am and one of my tenant texting me that the tenants upstairs were having a party. Many many many … way too many complaints about noise and marijuana scent later, I realized I don’t need anymore properties, I need peace and quiet enjoyment. And that, it’s time to simplify my life and take care of loans. And be debt free.
**The one driving factor was, the New Tax Law. Originally, I was thinking $1350 is my expense, and that I don’t need to make more than $20K per year, and my student loan interest will be deducted for tax advantage. Now that the standard deduction is $12K, $24K for Mr.W and me. I’ll take the standard deduction, the logical steps is to pay off my mortgage and student loan.
Upon graduation from graduate school, I had $100K in student loan. Granted, I was 18 when I started signing paperwork the student loan. I wanted an education, and I got one. I paid $30K pretty quickly within the first year of graduation. After that, I’ve been making a monthly payment of $330 to get it down to $44K level.
$44,000 in student loan debt (give or take, maybe a small change in between). Methods:
- I can pay $4K/mo x 11 month (plus some interest).
- I can pay $10k/mo x 4 month (the last month pay $14K)
- I can pay $44,xxx x 1 time
***I’m going to call them to see if I can pay with my credit card without inuring a fee, or this fee is small enough to score some hotel points.
$195,000 in my mortgage. Mr.W offered $100K, and I’d fork out the other half to just pay this off. ***I’m still think about this one.
- As some of you might have already known, I’d like leveraging. I could have use this cash for investments, soaring up my dividend portfolio, but a saving of $350/mo in student loan payment or having a portfolio of $100K to earn this much per month to offset this payment. For that I can have $350/mo extra in cash flow.
- It’s harder to find a loan that only charge 1.88% nowadays. I could have use that cash to buy a property in cash instead of borrowing at 4-5% interest.
- In a few years, when I retire, the tax law might change back, and I might qualify to deduct the interests on the loan again 🙂 But the last time any major change in tax bracket was 1980s. So that like almost 40 years. I wouldn’t count on this, you give people a bunch of money, it’s hard to take it back.
- A Major stock decline, signally a strong buy opportunity, and I wouldn’t have the cash for it.
- A major repair – HVAC, floor, fire, etc.
- I can say I’ve paid off my Student Loan.
- $350/mo extra in cash flow
- When I die, my beneficiary parties don’t have to deduct this loan from their inheritance.
- Not wasting about $1000 in student interest that I can’t deduct a year.
- Suzi Osman would be proud of me for making myself as priority instead of other people’s student loan
Having one goal for 2018 for just completely pay off my loan seems selfish, however, I feel like it’s the right time.I’m at the point where I don’t need to increase my income substantially anymore. I don’t need anymore property. I don’t need to take more risks in taking more loan or leveraging. Taking student loan off is a responsible thing to do for myself.
Update #1: I called the student loan office, and they will not charge a fee if I make a payment with a credit card. So my choices are:
Barclay – I’ll get $1 per $100 spent, basically I’ll get $440 off for traveling
Bank of America – 1% cash back = straight out $440
American Express – 44,000 points = 11 night stays at 2.5 – 3 stars hotel such as Aloft
Capital One – 44,000 points = $440 refund in travel
I might resign up for Marriott credit card should the 2 years sign up still around, then turn around and turn it back to Starwood points. LOL don’t know.
Do you travel hack? What suggestions you might have for me?