4 ms·

Did they simply take averages across all people in each bracket? I can think of very few reasons to have debt while having cash / investments surpassing the deb

• nostrademons 9y ago
  A number of people believe you should take on low-interest debt (eg. student loans, introductory car payments, mortgages) and then invest the cash from them in higher-yielding investments (eg. the stock market, Bitcoin, P2P lending, new businesses). IMHO these people are simply unaware of the concept of risk-adjusted returns or the idea that high-yield investments don't always go up and can, in fact, lose principal value, and they'll make up the next wave of bankruptcies when we next get a downturn. But the belief does exist, and has become increasingly more prevalent in the last couple years.
  • hueving 9y ago
    Student loans aren't good to lump with the others because the interest rates on the government loans can be obscene. I know someone who took out student loans from the government during very low interest (2012) and they got 6.8%. With the expected stock market return below that, it's probably better for most students to just pay off the debt.
    • nostrademons 9y ago
      That seems really high to me. My student loans (2001-2005) were 4.5%. Has it gone up so much recently? Edit: Just Googled. 4.5% is still a typical range for unsubsidized Stafford undergrad loans. 6.8% sounds like it was either a grad student loan or a parental (PLUS) loan.
      • hueving 9y ago
        Yes, it was for grad school loan for a masters program.