Graduates offer different ways to ‘get rich,’ quickly pay off your student loan debt
NEW YORK (CNNMoney) – When Mohammad Majd graduated from Drexel University in 2009, he had $200 in his bank account and thousands in student loan debt.
In all, he had $55,000 in student loan debt and was making the minimum payment of $460 a month.
“I began attacking my student loans by making double and triple payments. Like a lot of other recent graduates, I was conditioned to fear debt and I made a point to get rid of it as soon as possible,” he wrote in an op-ed piece for CNN.
He soon began asking himself why he was breaking his back to pay off a loan with a 3 to 6 percent interest rate.
“I changed my entire philosophy on debt. I started making minimum payments on my student loans, picked up a “Stock Investing for Dummies” book, and put whatever extra money I made into the stock market,” he said.
When he turned 26, he had earned $35,000 in his investment account, which was the same amount he owed.
He says he could either pay off the loans entirely and put the $460 he would be paying into the stock market, or continue making the minimum payments.
Majd says he will continue to make the minimum payment and hopes to have nearly $75,000 in savings within the next couple of years.
However, using the stock market is a risky tool.
If you aren’t sure exactly how to make money using stocks, ask for professional help.
Also, don’t forget about taxes.
You may owe the government money on the cash that you earn in the stock market.
Earlier this year, she had $13,000 left to pay and felt like she would never be able to pay it off.
After getting a decent job, she began putting every penny she saved into paying off the loan.
She cut back on purchasing furniture, shopped at thrift stores and walked wherever she could.
By the end of the year, she made her final loan payment.
After being fortunate to land a good job, he says he made a conscious decision to be debt-free and used a few easy steps to pay off those loans.
He says he stopped getting into additional debt by sticking with his old car, he learned all about the loans he owed and looked for debt-relief options, like loan-forgiveness programs.
Netzley says he paid as much as he could on the higher-interest rate loans first.
He also started investing in the stock market, but warns it can hurt you in the end if you are not careful.