As a college student, what is too much debt?

[ptownTSI]

I should add the following. I don't have student loans, I have about 4x my debt invested in the stock market but its making more than my debt accrues in interest.

so my portfolio for example averaged like 18% last year and up about 15% this year, yet my debt is only costing me 8-9% on my credit cards.

I could consolidate with a student loan, that would probably be the best thing to do. they are around 5 or 7 %.

MOST of the that debt is due to not working all last school year. $400 rent a month, groceries, books, tuition... all on the card.

[VacMan]

FYI Dave Ramsey always says to get gazelle intense about debt. I combined that statement with tony little and made a masterpiece. I'm 22 - just bought a house - and my credit score is now over 740. 3 years ago it was 506.

Alright, I'll give you credit *cough* for your masterpiece, and major props on your first house! I have a ton of respect for those of you younger guys who take the future seriously, at least in terms of finances.

I'm 35 and have played the game for a while now, but had I started when I was 19 - as you did - I can't imagine how much further ahead I would be. I bought my first house at 26, started maximizing IRA's and 401k the same year, lived a cash lifestyle, and have never let up. I'm just starting to see some substantial interest income each year.

Anyway, congrats on doing the right things. I'll bet most of your friends wish they were in your shoes and are kicking themselves about now, eh? :D

Tim

[ptownTSI]

Do you have another car? It seems like your E30 is in good mechanical shape and will reliably take you where you need to go for good while longer; I wouldn't sell it to jump into another car.

Your car might get you $2500. You'll still have a good amount of debt left.

I'd say, if the interest rate is high, attempt to reduce it by transferring a balance to a low interest credit card. However do this VERY carefully to make sure you don't get screwed. Don't BT to a card with a teaser rate good for 3 months, etc. Or if at all possible, use a part of a student loan, as the payoff terms are a lot more favorable.

What kind of job do you plan on getting when you are out of school? Paying 10K down won't be easy if you have a lot of other expenses (housing, bills, student loan payments that will kick in ~6 mo after graduation, etc.), even with a decent paying job.

I have a job offer with an insurance company starting at about 50k when I graduate, I'm trying to get a position in corporate finance or investment banking with citigroup, wells fargo, B of A, Fischer investments and a few others.

realistically, if i put new fenders on my car (dented from prior owner) and fixed the problems i could probably get $1500-2k for it, plus sell all the parts I have. it is a salvage title after all.

[Turf1600]

I should add the following. I don't have student loans, I have about 4x my debt invested in the stock market but its making more than my debt accrues in interest.

so my portfolio for example averaged like 18% last year and up about 15% this year, yet my debt is only costing me 8-9% on my credit cards.

I could consolidate with a student loan, that would probably be the best thing to do. they are around 5 or 7 %.

MOST of the that debt is due to not working all last school year. $400 rent a month, groceries, books, tuition... all on the card.

I don't understand - you have money to invest but obviously not enough money to live on? Rathing than hoping on your stocks paying off your interest - you should worry about not having either!!Cash those suckers out - pay off the debt and start over. when you actually have money to invest do it then.

Vacman - thanks for the kind words. I have worked very hard for it.

[ptownTSI]

theres no hoping that my stocks pay off more than my interest, they ARE paying off more than my interest. Its like a credit arbitrage equation when a company might borrow yen at a low interest rate and invest it in america with a higher interest rate and make the difference as profit.

i'm just really not liking the credit card debt as it's probably weighing on my credit score.

you guys did bring up the student loan though which i really should do, that would be a much better way to have my debt stored until i graduate.

[e30e]

My debt is around 15k. Now my roommates who is an engineer for raytheon, has about 75k he said in debt....OUCH!!!....According to the guy I bought my m3 off of he said he had 90k but I think he was also a crack head.

[Turf1600]

My debt is around 15k. Now my roommates who is an engineer for raytheon, has about 75k he said in debt....OUCH!!!....According to the guy I bought my m3 off of he said he had 90k but I think he was also a crack head.

Damn son - get your shit together.

[ptownTSI]

your roommate probably makes 50-60k a year though, he can pay that kind of debt down in 5 years no problem. unless he's out buying escalades and not paying down his student debt.

[e30e]

Damn son - get your shit together.

I bought my m3 with my student loans.... right now the best decision i ever made.....especially next semester when the other half of the loans come around and the car "needs" upgrades......sad thing is i'll probably be responsible and pay back some of the debt :(

[TwoJ's]

I am in about $200,000 in debt. Granted, I've only had my house for a year, and i've probably already earned something like 10% in equity. It is quite a burden to pay the morgtage every month. It's $1600 and I have two room mates that pay $400 each. Leaves me paying $800. Doesn't sound like too much, but I'm in school and I can oly work so much.

[Herb]

Dave Ramsey, daveramsey.com , "Better Than I Deserve."

OP would you take out a loan for 10k to put in the stockmarket??

The only way to have a "good" credit score is to be in debt/have to pay debts. Who WANTS to owe money.

To the guy that bought the m3 with student loans. ??????????????? I understand deferred till graduation, but why?

I've re-learned the ancient word of NO.

[delatlanta1281]

www.clarkhoward.com

[netcsk]

I've got ~$400 in CC debt (my current balance) and about $5-6k in student loans. But at the same time I'm in both diversified Latin America and Europe in a roth ira up ~23% since getting in early April. I'll graduate in another year and I'm off to my engineering career or I might stick around for a masters in business or a masters in engineering (or both -- we have a two year full time dual program if I feel like I can afford another two years of debt).
I'm workin on it!

CC debt sucks. I'd hate to see that much interest accumulate every month, especially since I can't imagine you having too good of a rate.

[Turf1600]

I've got ~$400 in CC debt (my current balance) and about $5-6k in student loans. But at the same time I'm in both diversified Latin America and Europe in a roth ira up ~23% since getting in early April. I'll graduate in another year and I'm off to my engineering career or I might stick around for a masters in business or a masters in engineering (or both -- we have a two year full time dual program if I feel like I can afford another two years of debt).
I'm workin on it!

CC debt sucks. I'd hate to see that much interest accumulate every month, especially since I can't imagine you having too good of a rate.

DAMN - Awesome rate on that IRA. Wonder what the risk is?

[DEV0 E30]

Dave Ramsey, daveramsey.com , "Better Than I Deserve."

He was on 60 Minutes last night. Guy is legit.