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  • what would you do

    I've been reading a lot and weighing my options regarding some extra money I'll have over the next few months. My wife is sick of me talking about the options and I keep changing my mind on what I want to do. I'd love some advice.

    I currently have 90k in student loans left at 3.1% variable rate with sofi. My wife and I have both been maxing out a backdoor roth IRA and our 401k accounts. Over the next few months I'll have the money to either (option 1) pay off my student loans completely or (option 2) get them below 50k and put maybe 50k into a taxable account. I go back and forth on what I would invest in in the taxable account (muni bonds or a total market stock index fund). I hold approx 90% stocks in the other accounts. (Option 3) is to save all the money in a savings account (ally bank) to put towards a future business loan, which I'll likely take out in 1 year. Business loan might be around 500k.

    Any thoughts or advice? I already have an emergency fund of about 5-6 months expenses. My heart says pay off the student loans but my head says put 1/2 towards loans and open a taxable account at vanguard with the other half. I have a hard time wrapping my head around option 3 since the business loan will allow for tax deduction on the interest and my income would go up enough to justify the loan.

    My wife favors paying off the student loans.... should I have mentioned that earlier? 

    Thanks

  • #2
    None are bad choices. I'd pay off the loans, especially since that's your wife's choice. You'll never heard the end of it if the market tanks and you'll clear beat the 1% ally will give you, especially after tax.
    Helping those who wear the white coat get a fair shake on Wall Street since 2011

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    • #3
      100% of your business loan interest is deductible - above the line. You're not getting any deduction for the student loans (presumption). You would be, in effect, be choosing to use student loans to subsidize the business debt if you kept a balance there in order to borrow less for the business. That leaves either 1 or 2. Better to shop for a business loan with no student debt. Given that you have your emergency fund in place, my choice is #1.
      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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      • #4
        Thanks everyone! I really appreciate the input. I'll move in the direction of paying off my student loans. I'm excited just thinking about it. I'll be sure to post again when I meet my goal and it's official.

        I love this website and forum... I think it is much better for medical professionals than trying to sort through the bogleheads forum.

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