Paid Off $340K in Student Loans in 4 Years!

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thatme
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Paid Off $340K in Student Loans in 4 Years!

Post by thatme » Fri Dec 22, 2017 1:55 pm

I've been waiting a long time to cross the finish line on student loans, but it finally happened a few days ago.

In 50 months, I paid off $340K in student loans (undergrad + law school + 2+ years of accrued interest while working in a legal clerkship). I refinanced three times along the way (Sofi --> DRB --> First Republic) and managed to max out my 401(k) each year as well. I bought two houses -- the first a fixer upper that I sold after 2.5 years and made a profit that went to the loans, got married, had a baby, and purchased several vehicles with cash. My income has fluctuated from $180K to $400K (still in BigLaw) and my net worth has increased by $600K during that time (currently at $225K).

Thanks to everyone on this forum for all of the helpful guidance and motivation. In 2018, my goals are continuing to max out my wife and I's 401(k) accounts, do a backdoor Roth, build up a slightly stronger cash position, and open a taxable account. This is the first time I've not had any debt (other than a reasonable mortgage) since I turned 18 and it feels great!

Happy Holidays everyone!

winterfan
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Re: Paid Off $340K in Student Loans in 4 Years!

Post by winterfan » Fri Dec 22, 2017 1:57 pm

Wowza! Congrats on a remarkable achievement!

2stepsbehind
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Re: Paid Off $340K in Student Loans in 4 Years!

Post by 2stepsbehind » Fri Dec 22, 2017 1:58 pm

thatme wrote:
Fri Dec 22, 2017 1:55 pm
I've been waiting a long time to cross the finish line on student loans, but it finally happened a few days ago.

In 50 months, I paid off $340K in student loans (undergrad + law school + 2+ years of accrued interest while working in a legal clerkship). I refinanced three times along the way (Sofi --> DRB --> First Republic) and managed to max out my 401(k) each year as well. I bought two houses -- the first a fixer upper that I sold after 2.5 years and made a profit that went to the loans, got married, had a baby, and purchased several vehicles with cash. My income has fluctuated from $180K to $400K (still in BigLaw) and my net worth has increased by $600K during that time (currently at $225K).

Thanks to everyone on this forum for all of the helpful guidance and motivation. In 2018, my goals are continuing to max out my wife and I's 401(k) accounts, do a backdoor Roth, build up a slightly stronger cash position, and open a taxable account. This is the first time I've not had any debt (other than a reasonable mortgage) since I turned 18 and it feels great!

Happy Holidays everyone!
Congratulations!

bigskyguy
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Re: Paid Off $340K in Student Loans in 4 Years!

Post by bigskyguy » Fri Dec 22, 2017 2:15 pm

Your achievement is beyond commendable. The Federal Government could well learn from you.

Might you take a minute and share your method(s) -- did you have a plan, and if so what was it? Was it a joint decision with your now partner, or a solo plan of yours? And what is your attitude toward debt in the future?

Thanks.

TravelforFun
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Re: Paid Off $340K in Student Loans in 4 Years!

Post by TravelforFun » Fri Dec 22, 2017 2:22 pm

Way to use that big shovel to fill up the big hole you had. Congrats!

TravelforFun

WL2034
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Re: Paid Off $340K in Student Loans in 4 Years!

Post by WL2034 » Fri Dec 22, 2017 2:27 pm

Congratulations! We paid off our student debt aggressively too, and it is such a relief. Life changing!

ResearchMed
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Re: Paid Off $340K in Student Loans in 4 Years!

Post by ResearchMed » Fri Dec 22, 2017 2:29 pm

That is phenomenal! :happy

Even with a very nice salary, that was a *lot* of debt to pay off... and you achieved some other financial goals, too.
Pretty amazing!

And your goals for the near future are terrific, too.

But don't forget to take some time to relax, and enjoy your time together, all three of you, and also just you and your wife.
It doesn't need to be often (but it could be) and it doesn't need to be expensive (but if it is, then "not too often" :wink: ).

It sounds like you are working very hard, so don't risk burning out.

You have a lot to celebrate this holiday season.

RM
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bubbadog
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Re: Paid Off $340K in Student Loans in 4 Years!

Post by bubbadog » Fri Dec 22, 2017 3:20 pm

Congratulations!

Very happy for you.

Being debt free and making a really good income as you do, the world is your oyster. :sharebeer

thatme
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Re: Paid Off $340K in Student Loans in 4 Years!

Post by thatme » Fri Dec 22, 2017 4:20 pm

bigskyguy wrote:
Fri Dec 22, 2017 2:15 pm
Your achievement is beyond commendable. The Federal Government could well learn from you.

Might you take a minute and share your method(s) -- did you have a plan, and if so what was it? Was it a joint decision with your now partner, or a solo plan of yours? And what is your attitude toward debt in the future?

Thanks.

Thank you! No real plan, other than trying to keep my eye on the ball and, without really going too crazy, put whatever free cash I could find at this problem. Annual bonuses helped, though I used my bonus in 2016 as a down payment on my house, and tracking our spending every month.

I hope to be out of debt forever, outside of a single mortgage. I just refinanced into a 3.5% mortgage and am content to pay down my mortgage relatively slowly, but still hopefully over the next decade or so. I guess my next goal is a net worth of $1MM by age 40 (about 4.5 years to go). My wife is very supportive and, while I probably could have done it without her (and started down this road without her), I wouldn't have wanted to.

TheAncientOne
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Re: Paid Off $340K in Student Loans in 4 Years!

Post by TheAncientOne » Fri Dec 22, 2017 4:35 pm

A fabulous and inspiring story. It reminds me that we need to not just preach to the converted here but to encourage friends, family, and coworkers to spend less than they make and to invest those savings intelligently and consistently over the long term.

Cash
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Re: Paid Off $340K in Student Loans in 4 Years!

Post by Cash » Fri Dec 22, 2017 5:16 pm

Congrats! Does your wife also work?

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scubadiver
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Re: Paid Off $340K in Student Loans in 4 Years!

Post by scubadiver » Fri Dec 22, 2017 5:19 pm

Well done! Congratulations.

thatme
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Re: Paid Off $340K in Student Loans in 4 Years!

Post by thatme » Fri Dec 22, 2017 5:22 pm

Cash wrote:
Fri Dec 22, 2017 5:16 pm
Congrats! Does your wife also work?
She does. She's in education, making approximately $55K/year. She pays into a state pension and didn't realize she could also fund a 401(k) -- an issue we remedied about 18 months ago after we got married and I started looking into things a bit further.

Sportswhiz00
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Re: Paid Off $340K in Student Loans in 4 Years!

Post by Sportswhiz00 » Fri Dec 22, 2017 5:52 pm

Congrats...may want to check if your wife is eligible for a 457(b) in addition to 403(b).

thatme
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Re: Paid Off $340K in Student Loans in 4 Years!

Post by thatme » Fri Dec 22, 2017 5:54 pm

Sportswhiz00 wrote:
Fri Dec 22, 2017 5:52 pm
Congrats...may want to check if your wife is eligible for a 457(b) in addition to 403(b).
Thanks, will do. I believe she looked into the 457(b) before but the fund choices and fees were incredible. We may revisit that research in the new year.

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whodidntante
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Re: Paid Off $340K in Student Loans in 4 Years!

Post by whodidntante » Fri Dec 22, 2017 6:01 pm

Cool.

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sergeant
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Re: Paid Off $340K in Student Loans in 4 Years!

Post by sergeant » Fri Dec 22, 2017 6:02 pm

Congrats!
Lincoln 3 EOW!

Sportswhiz00
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Re: Paid Off $340K in Student Loans in 4 Years!

Post by Sportswhiz00 » Fri Dec 22, 2017 6:11 pm

thatme wrote:
Fri Dec 22, 2017 5:54 pm
Sportswhiz00 wrote:
Fri Dec 22, 2017 5:52 pm
Congrats...may want to check if your wife is eligible for a 457(b) in addition to 403(b).
Thanks, will do. I believe she looked into the 457(b) before but the fund choices and fees were incredible. We may revisit that research in the new year.
I’m in biglaw too...if you are in a high tax state or city wild suspect that the deferral outweighs the fees. Plus 457 you can withdraw at any time after she leaves without penalty and so if she isn’t planning to work to full retirement in that district it’s a really nice flexible option that you don’t have with a 401k

lostdog
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Re: Paid Off $340K in Student Loans in 4 Years!

Post by lostdog » Fri Dec 22, 2017 6:12 pm

Congratulations! :sharebeer
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thatme
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Re: Paid Off $340K in Student Loans in 4 Years!

Post by thatme » Fri Dec 22, 2017 6:25 pm

Sportswhiz00 wrote:
Fri Dec 22, 2017 6:11 pm
thatme wrote:
Fri Dec 22, 2017 5:54 pm
Sportswhiz00 wrote:
Fri Dec 22, 2017 5:52 pm
Congrats...may want to check if your wife is eligible for a 457(b) in addition to 403(b).
Thanks, will do. I believe she looked into the 457(b) before but the fund choices and fees were incredible. We may revisit that research in the new year.
I’m in biglaw too...if you are in a high tax state or city wild suspect that the deferral outweighs the fees. Plus 457 you can withdraw at any time after she leaves without penalty and so if she isn’t planning to work to full retirement in that district it’s a really nice flexible option that you don’t have with a 401k
Interesting, thanks for the tip, I was not aware of that.

inbox788
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Re: Paid Off $340K in Student Loans in 4 Years!

Post by inbox788 » Sat Dec 23, 2017 11:33 am

thatme wrote:
Fri Dec 22, 2017 1:55 pm
In 50 months, I paid off $340K in student loans (undergrad + law school + 2+ years of accrued interest while working in a legal clerkship). I refinanced three times along the way (Sofi --> DRB --> First Republic) and managed to max out my 401(k) each year as well. I bought two houses -- the first a fixer upper that I sold after 2.5 years and made a profit that went to the loans, got married, had a baby, and purchased several vehicles with cash. My income has fluctuated from $180K to $400K (still in BigLaw) and my net worth has increased by $600K during that time (currently at $225K).

Thanks to everyone on this forum for all of the helpful guidance and motivation. In 2018, my goals are continuing to max out my wife and I's 401(k) accounts, do a backdoor Roth, build up a slightly stronger cash position, and open a taxable account. This is the first time I've not had any debt (other than a reasonable mortgage) since I turned 18 and it feels great!

Happy Holidays everyone!
Congratulations!

It helps that you have high income. It's a bit scary to analyze, but consider this. In the last 4 years, you made over $1M in income. You probably paid over $300k in taxes. You may have had some capital gains from investments (i.e real estate). Compared to your total annual operating expenses, these numbers are of the same magnitude.

I do 5 and 10 year planning/budgeting to get a big picture of what has happened and what could happen. If nothing changes in the next 4 years and you do exactly the same, those 401k and backdoor Roth buckets fill almost automatically, and an increase in NW of another $600k and $340k goes directly into investments instead of loan payments (or retiring some of that mortgage depending on your interest rate and risk aversion). It wouldn't take too many fortunate events like small increase in pay or markets do ok or another successful property flip to be around $1M in NW. It's quite reachable.

Sometimes, looking back at your cumulative expenses can be scary. If you made $1M total in the last 10 year, how much did you spend on your cars? Total vehicle costs, insurance, maintenance, repairs, gas, etc. How much did you spend at Starbucks? Total credit card spending? Electric bills?
Numbers become quite big at this scale.

BTW, 2017 turned out to be a pretty good year, and anyone with a moderate to aggressive AA/portfolio is up around 15-20%. If you have $1M in your 401k or retirement accounts, you might be up $200k. And if you're in retirement or near retirement, your portfolio might have grown 3-5X the 4% SWR, adding more confidence you'll not run out of money in 30 years and possibly enticing you to make adjustments to your plan.

http://fortune.com/2017/08/03/americans ... -balances/
http://time.com/money/3746234/million-d ... ment-401k/
https://www.fool.com/retirement/2017/10 ... et-it.aspx

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Top99%
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Re: Paid Off $340K in Student Loans in 4 Years!

Post by Top99% » Sat Dec 23, 2017 11:51 am

:sharebeer Congratulations and this now also means you have an $85K / year savings habit. There are worse habits to have :beer
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