Want to get rich? Don't pay off your student loans

Re:Want to get rich? Don't pay off your student loans by fludlight on Monday December 22, 2014 @03:07PM (#8784867)

Depends on your timeframe. The S&P returned -22% from 1/1/2000 to 1/1/2010, and only +43% from 1/1/2000 to today. The annualized return is nowhere near the 11% quoted in the article.

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Re:Want to get rich? Don't pay off your student loans by YourCupOTea on Monday December 22, 2014 @03:28PM (#8785006)

You aren't including dividend reinvestment and you are looking at the wrong time frame for the quoted percentage.

-5.65% from 1/2000 to 1/2010 with dividend reinvestment

+89.85% from 1/2000 to 12/2014 with dividend reinvestment

The annualized returns are generally over rolling 30 year periods. which 12/1984 to today is 8.79% without reinvestment or 11.32% with reinvestment of dividends.

http://dqydj.net/sp-500-return-calculator/

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Re:Want to get rich? Don't pay off your student loans by dragontamer on Monday December 22, 2014 @04:34PM (#8785385)

Dividends are taxed at your income btw. So these values only make sense inside a tax-advantaged account.

They'll be a bit lower once you factor in taxes, which can be a sizable chuck (especially because that tax difference "compounds" year over year in the reinvestment case)

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Re:Want to get rich? Don't pay off your student loans by nisse72 on Monday December 22, 2014 @04:24PM (#8785325)

Exactly. Timing is everything:

http://www.nytimes.com/interactive/2011/01/02/business/20110...

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Re:Want to get rich? Don't pay off your student loans by ConnorBoyd on Monday December 22, 2014 @03:25PM (#8784985)

11% might be the long-term historical average (last 75 years or so), but that still sounds pretty high.

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