Saturday, October 08, 2005

Nothing SO interesting here... Money Stuff

There isn't that much exciting going on. I spent Shabbos hiding out on my own in my father's house, which is too far from any minyan to attend services. I still fully kept shabbos, davened (prayed), and did everything I was supposed to, sans the mitzvah of hearing the weekly Torah reading.

I wish I lived closer to a shul that way I can enjoy a peaceful shabbos like the one I just had, but including the minyan and the shul experience. My dad is still talking about building closets in my room, even though I told him that I plan on moving out soon. He's in denial, just as he usually is when I do something that is against his wishes.

Other than reorganizing my bookshelf by topic, (i.e. Nigleh, Halacha, Chassidus, Tanya; Law books by course topic; Secular books by books on persuasion, investing, grammar and proper writing, "feel good" books by Rabbi Twerski, M.D., and previous journals), I spent a considerable time today reading Pavel Tsatsouline's book called "Power to the People," a book on the strength training techniques the Russian atheletes use when training for the olympics. I've been very impressed by his books and his style of writing lately, and I've found his advice to work very well when it comes to getting results in stretching and exercise.

Otherwise, everything seems okay. I found out early Friday morning that my massive amount of private loan debt's interest rate has been inching up these past few months from 4% to almost 7%. That's a big jump, and I don't think it is going back down any time soon. So, I am thinking of taking all of my investment account Roth IRA money that I saved during college and taking a disbursement to pay down the school private loans. I checked on the IRS website, and this use of my Roth IRA funds would avoid the 10% penalty that the IRS imposes on early withdrawal of Roth IRA funds.

I feel that using my funds to pay the school loan guarantees me a 7% interest (that I will not be incurring), and this is a better deal than playing with the money in this crazy market and risk losing even more of it like I did a few months ago.


Ezzie said...

I think you should try and find a financial planner... or at least speak to someone. Your idea seems smart on the face of it, but there should be a way to lock in your loans at a lower rate (my wife locked hers at 3% a few months ago). A jump from 4% to 7% is outrageous, and way above the current rates. Sorry I can't be of more help (I'm an accounting major, but I'm still in school) - good luck!

Rowan said...

sounds like a smart move on your part

Zoe Strickman said...

Ezzie, these are private loans. Federal loans are capped at $18,500 per year and my tuition alone was much more than that. I had to take private school loans to pay tuition and expenses. I wish I never did.

Anyway, I went against my own advice and did exactly the opposite of what I think is the smart move. I took $7000 and put it into my stock market account, even though it is still sitting as cash.

The logic is that interest on the $50K private loans will cost me $3,500 per year, and I can only pay down around $10K of it, which means that even if I liquidate my investment account, I will still have around $3000 interest either way. I thought it would be smarter to try to use the $10K + some to make that amount back. Then it will be as if I paid back the loan (at least until next year) because I will have (IY"H) made the amount of interest in profit that I would have otherwise paid. This might be a stupid idea, I know.