That's good advice to avoid and eliminate debt. One caveat, though, is that if you're eligible for 401k matching, invest enough in the account to get the maximum match even if it slows down your college loan repayment a little. You may leave "free money" on the table--If you pay off that loan as quickly a possible and *then* start investing a lot in the 401k, you won't get matching money on the amount that exceeds the max later even if you're investing more than that amount.
However, some people have the mindset that keeps the "mathematically best" process from working for them...same as people who need to pay off the smallest loan first in order to feel like they're achieving debt reduction even though it's practically better to pay off the highest interest rate loan first.
Regarding "Don’t stop at the first restroom you see after deplaning":I recall a story in "Readers Digest" from ~40 years ago where a large number of soldiers from some army base began their leave at the same time, and began hitchhiking into the closest town. Of course, no drivers stopped to pick up a few out of the dozens or hundreds of soldiers. The writer ended up being surprised when he saw three of his friends riding by and waving--they had walked the *opposite way*, and got a ride because a driver wasn't averse to picking up a group of three. I don't know if there's an economic law or human behavior rule-of-thumb that describes that, but it made me notice the real-world effects and opportunities to take one step backward to enable many steps forward.
Regarding #5. Maximize tax deferral-- I am currently paying some taxes long before I have to by converting some regular IRA assets to a Roth. I discovered that doing this before beginning social security fills up the 22% bracket, and saves taxes on social security once that starts. Even if I stay in the 22% bracket, the tax on the SS is thousands less because the "Provisional Income" is lower thanks to the tax-free Roth money.
Comments
That's good advice to avoid and eliminate debt. One caveat, though, is that if you're eligible for 401k matching, invest enough in the account to get the maximum match even if it slows down your college loan repayment a little. You may leave "free money" on the table--If you pay off that loan as quickly a possible and *then* start investing a lot in the 401k, you won't get matching money on the amount that exceeds the max later even if you're investing more than that amount. However, some people have the mindset that keeps the "mathematically best" process from working for them...same as people who need to pay off the smallest loan first in order to feel like they're achieving debt reduction even though it's practically better to pay off the highest interest rate loan first.
Post: My Eight Rules
Link to comment from January 16, 2023
Regarding "Don’t stop at the first restroom you see after deplaning": I recall a story in "Readers Digest" from ~40 years ago where a large number of soldiers from some army base began their leave at the same time, and began hitchhiking into the closest town. Of course, no drivers stopped to pick up a few out of the dozens or hundreds of soldiers. The writer ended up being surprised when he saw three of his friends riding by and waving--they had walked the *opposite way*, and got a ride because a driver wasn't averse to picking up a group of three. I don't know if there's an economic law or human behavior rule-of-thumb that describes that, but it made me notice the real-world effects and opportunities to take one step backward to enable many steps forward.
Post: The Unfriendly Skies
Link to comment from January 1, 2022
Regarding #5. Maximize tax deferral-- I am currently paying some taxes long before I have to by converting some regular IRA assets to a Roth. I discovered that doing this before beginning social security fills up the 22% bracket, and saves taxes on social security once that starts. Even if I stay in the 22% bracket, the tax on the SS is thousands less because the "Provisional Income" is lower thanks to the tax-free Roth money.
Post: Go to Extremes
Link to comment from July 31, 2021