Re:MBA Repays $100,000 Harvard Student Loan in 7 Months
by genwin on Friday September 14, 2012 @02:55PM
(#4523325)
It's a 10% penalty. The rest is presumably taxes that were just deferred anyway. If the guaranteed rate of return for the IRA was 1% and the student loan was 5% interest, he'd easily come out ahead by retirement. Especially since tax rates will almost certainly be a lot higher in the future.
Re:MBA Repays $100,000 Harvard Student Loan in 7 Months
by maxerickson on Friday September 14, 2012 @03:21PM
(#4523467)
You comment elsewhere about a $99k IRA. It was a $12k IRA.
He netted ~$8k from selling it. That adds a few months of whatever he was doing to come up with the part that wasn't covered by the IRA and bike.
The part where he cashed out the IRA at a 40% penalty to do it does suggest that much of the debt problem that gets so much attention is personal in nature. I would think it might occur to an MBA to apply a little bit of that business training to their personal finances.