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Started By
Message
Suggestions for use of inheritance for a student
Posted on 4/11/23 at 10:35 pm
Posted on 4/11/23 at 10:35 pm
Relative received inheritance from grandparent. Graduate student with 2 years left of school. No income. Student loan interest seems to be on hold currently but may restart in summer/fall unless it’s extended again. Loan rates at 6.5%. May need some cash for house down payment in 3-4 years but should be able to save once he starts working. Just start paying down loans and come out of school as debt free as possible or try to get into the market? Thoughts?
8
Posted on 4/11/23 at 11:17 pm to Bonjourno
I’d pay off the student loans. 6.5% guaranteed return is a nice enough. Maybe keep a bit as a nest egg safety net and eventually to help with a house when the time comes.
Posted on 4/11/23 at 11:19 pm to Bonjourno
quote:
Just start paying down loans and come out of school as debt free as possible
I love debt, but given the situation you described, this is probably the way to go.
Any money you need in 3-4 years should have relatively minimal market risk. 3yr rolling market returns are positive about 85% of the time, but you can get 4.5% guaranteed on CDs right now.
Perhaps a short term cash option would be best as long as interest is on hold in the debt, but once it kicks in I’d just pay it off.
Posted on 4/12/23 at 9:30 am to slackster
Get out of college with no debt.
Try to lock the interest on the loan payments now by starting the payback.
If you don't a lot of times when you report you are graduating in 6 months as they require they'll jack your rates like they did to me.
My rate went from 1.3% to 7.25% on payback. I had the option to lock in and payback early. I didn't know until it was too late.
Try to lock the interest on the loan payments now by starting the payback.
If you don't a lot of times when you report you are graduating in 6 months as they require they'll jack your rates like they did to me.
My rate went from 1.3% to 7.25% on payback. I had the option to lock in and payback early. I didn't know until it was too late.
Posted on 4/12/23 at 9:38 am to thejudge
I'd suggest doing both. Use it to start an emergency fund, always nice to have when you are young.
Then use it to pay down some debt. Live off his own means, and save for a house. I wouldn't worry about a house downpayment right out of college.
Then use it to pay down some debt. Live off his own means, and save for a house. I wouldn't worry about a house downpayment right out of college.
Posted on 4/12/23 at 11:08 am to Bonjourno
Too little info to give a specific answer. In general, use the majority to pay off debt. You only mentioned 1 type of debt and may have more.
Posted on 4/12/23 at 11:41 am to Bonjourno
quote:
Thoughts?
Has this relative asked for your advise?
21-23 year old me would listen to what you had to say and then do whatever I wanted with my money
Posted on 4/12/23 at 7:26 pm to Bonjourno
Take the money and…
1. (Assuming no other debt cause none was mentioned) Open an emergency fund. Get a high yield account (some saving and money markets are paying 4-4.5% right now. Put the amount of the loan in that too. If or when the student loan interest kicks in, then pay the student loans off immediately when interest is gonna start back up.
2. Put aside in a minimal market risk for short term. (House purchase, car purchase, etc.)
3. The rest put aside in too long term investments.
1. (Assuming no other debt cause none was mentioned) Open an emergency fund. Get a high yield account (some saving and money markets are paying 4-4.5% right now. Put the amount of the loan in that too. If or when the student loan interest kicks in, then pay the student loans off immediately when interest is gonna start back up.
2. Put aside in a minimal market risk for short term. (House purchase, car purchase, etc.)
3. The rest put aside in too long term investments.
This post was edited on 4/13/23 at 8:34 am
Posted on 4/12/23 at 7:51 pm to Bonjourno
There is absolutely zero reason to make a lump sum payment on a federally held student loan right now. None. Hold the money and wait to see how the forgiveness/pauses/etc shake out.
Posted on 4/13/23 at 9:34 am to lynxcat
Thanks all. No other debt. Probably will advise looking into CD and just waiting on what the government decides to do with student loan interest. Renew CD as long as the government kicks the can down the road
Posted on 4/13/23 at 12:43 pm to Bonjourno
I’d get him to pay the school off since stocks only go down
The world will be at his fingertips, young, no debt, shiny new feminist dance therapy degree
The world will be at his fingertips, young, no debt, shiny new feminist dance therapy degree
Posted on 4/13/23 at 4:19 pm to el Gaucho
I am new to this board. One thing I have noticed is that you give bad advice. Are you serious or trolling?
Posted on 4/13/23 at 4:21 pm to KWL85
I give real advice on this board everywhere else is trolling
Posted on 4/13/23 at 6:32 pm to KWL85
Troll but the board needs some humor.
Posted on 4/13/23 at 6:36 pm to KWL85
Gaucho actually manages a $180 million portfolio from his FEMA trailer.
Posted on 4/13/23 at 6:48 pm to Drizzt
quote:
FEMA trailer
I wish
Posted on 4/13/23 at 6:54 pm to Bonjourno
Be careful...no hurry, some amount of debt and timely note pay will help build your credit rating. Then zero out.
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