I was really hoping to avoid talking about Occupy Wall Street again. I gave insights in to my stance on the movement last week and didn’t feel as though more needed to be said. That was until yesterday when I read this story on the Huffington Post…

While the Occupy Wall Street movement continues to grow and spread, there is no common call to action. I propose that the first call to action to help ease the economic stress of Americans is to forgive student loan debt. What do you say?

I say, “You sir are an idiot.”

I need not remind you (readers) that I graduated college with $28,000 in student loan debt in 2007. According to Huff Post that’s $4,000 more than the national average in 2009. So before you start accusing me of being part of the 1% let’s get a few things straight. 1) I’m not. 2) My parents aren’t either. Glad we got that settled.

Let’s talk about my story. I knew full well when I signed up to go to a private school that it was about three times more expensive than a local university would have been. I also knew that I would have to take out student loans to be able to go to said private school. I didn’t really think about the repercussions of taking on debt and gladly signed my life away. These are the facts as I see them.

To be perfectly honest, I was shocked to see the total balance of my student loans upon graduation. Twenty eight thousand dollars is a big scary number, especially when you have no employment lined up. I did what most grads do, I consolidated my loans and deferred them for six months.

What I didn’t do was complain that the college tricked me in to signing up for the debt. And I didn’t expect my Alma Mater to find me gainful employment upon graduation. I knew I got myself in the mess, and I was the only person that could get myself out. I accepted responsibility for my ignorant actions.

So guess what I did? I got a job and started making my minimum payments. I then got a second job, and a third job, so I could make accelerated payments. After 2.5 years, I was debt free. I didn’t expect the government, big business, my college, Sallie Mae, my parents, or you, to pay off the loan I voluntarily signed up for. I accepted my situation, and worked my a$$ off to improve it. Sending off that last payment was incredible.

Do you know how frustrating it is to work so hard (as I chronicled in many blog posts) to accomplish a goal, only to have it marginalized by a group of people who want the same thing, but aren’t willing to go to the lengths I did to achieve it. I was EXACTLY where you are now, a few years ago. The difference was I didn’t go Occupy Wall Street, I occupied multiple jobs.

If Joe starts eating healthy/exercising more and loses 50 pounds as a result, do I suddenly have a right to demand the local plastic surgeon give me free liposuction so I can have the same results as Joe? Even if I have a genetic makeup that makes it much more difficult for me to lose weight? Fat chance (pun absolutely intended).

I can only think of one situation in which I would entertain the idea of allowing student loans to be bankrupt-able/forgiven: If and only if the individual would relinquish all credits and degrees earned. The worse thing we could do is forgive the debt and let them keep their degrees. Hell, I’d take a few dings on my credit score if it meant I got a “free” degree out of the gig.

Lastly, if you really are pissed off about the whole student loan/cost of college issue, you should probably go protest your college, not Wall Street.

I’ve already paid off my student loans. Don’t force me to pay yours off too. Unleash the hounds.

p.s. Just to make a few things clear. I am not saying the lending practices associated with student loans are great. And I’m not saying the exponentially increasing cost of college is acceptable. I’m all for reforming tuition rates and lending practices. Student loan forgiveness is not reform, it’s a lame solution that doesn’t solve the much more complex problem.

Half way through my Sophomore year of college I saw a job announcement to be a RA (residence assistant) in one of my college’s dorms. My roommate that year was already an RA so I knew quite a bit about the position and how it worked. Although the position was unpaid, RA’s receive free room and board (a $7,000 value). I desperately wanted the job.

I didn’t get it.

I was shocked. It was the first time in my life I had really wanted something, worked hard for it, and didn’t get it. At first I was pissed. Why didn’t I get it? I was definitely qualified for the position and I knew all the right people. I was a shoe in. So I thought.

In the blink of an eye my world came crashing down. I panicked. What the heck am I going to do next year? Am I going to be forced to work in my college’s cafeteria? What is wrong with me? If I didn’t get this job, will anyone hire me?

Once the panic wore off, I was able to take a deep breath, calm down, and establish a plan. A few weeks later I ended up getting a different on campus job as a building manager. If you don’t know what a building manager does, neither do I, ’cause I’m pretty sure I got paid to surf Facebook and watch movies. It ended up being the sweetest job ever and actually paid better than the $7,000 stipend I would have gotten as a RA. Being rejected from the RA position was one of the best things that happened to me in college.

I miss that feeling. The “Holy $#!%, what am I going to do” feeling. Part of me wishes I got fired tomorrow. I feel like I’ve become complacent (read: stagnant) in my personal and professional development. If I got fired, however, I’d be faced with a huge challenge; finding employment in a crappy economy. The thought of not knowing what the heck I am I going to do is both scary and exciting. Maybe I’d focus more on growing this blog (self employment), maybe I’d land a better/higher paying gig elsewhere, maybe I’d end up at McDonald’s asking “You want fries with that?“.

Nietzsche said “That which does not kill us makes us stronger”, and ya know what? I think he’s right. Although I don’t REALLY want to be fired tomorrow, I’d be lying if I said the thought of it wasn’t slightly intriguing. What is/was the most difficult thing you’ve faced recently? Do feel like you grew because of it? Do you ever feel unchallenged/stagnant/boring/predictable like me?

Today is the first day of the new school year at my Alma Mater. I figured it was only appropriate to kick the school year off with some “Do’s and Dont’s” for all college students to consider. Hope you enjoy

Do look in to going to a public school. I made the decision to go private and man oh man did I pay for that choice. My school ran about $30k/yr, quite a bit different than the $5K-10k/yr public school options. Looking back I wish I would have considered going to a state school. It’s okay though, I don’t regret my choice as I had the best four years of my life, but I SHOULD have explored public options more carefully.

Don’t drop out. Yeah that’s right. If you start college…finish. I can’t tell you how many kids I went to school with that didn’t come back after the first year. They paid $30K for that one year, and don’t have a degree to show for it. School can be hard, life happens, and money will be an issue, but you better do everything in your power to make sure you graduate from somewhere, even if it’s PDU (Punch Debt University).

Do work part time. I don’t care if you are working 5hrs/wk or 40hrs/wk, but try and make some money. I know, being a full time student can be stressful, but I bet part of that stress comes from being broke. You don’t need to be earning enough to contribute to a Roth IRA (although that would definitely be sexy), I just want you to be able to cover the majority of your personal expenses (food, clothes, school stuff, etc). It also will give you something to put on your resume come graduation time. Think about it, if you were on a hiring panel would you hire someone who graduated college with a 3.5 GPA and no work experience or someone with a 3.5 GPA who also had a job during those four years? I’m going with the latter.

Don’t use that fricken credit card you signed up for. Yeah, that’s right. I’ve been watching you. Some dude at a booth said “Hey fill out an application for this credit card and we will give you this frisbee” and you filled it out didn’t you…DIDN’T YOU!? I too took advantage of a “free shirt” offer, but I actually lied on the application and input all fake info (which I think is actually a crime, but I didn’t know it at the time). Fortunately, I never accumulated a credit card balance while in school and you need to do the same. This is a non-negotiable. Credit cards can not be the means by which you provide yourself food and textbooks.

Do get good grades. Sounds like a no brainer right? But are you really applying yourself in all of your classes. I sure didn’t. In fact I got an A in Organic Chemistry, but a B in Introduction to Art. I picked and chose which classes I wanted to succeed in and where I was okay falling short. I wish I could go back in time and try just a little bit harder. When you graduate your GPA is going to be a huge bartering tool for you. Yes, your college GPA will become less important as you establish yourself in the work place, but until that time comes, it is your most valuable asset. If you graduated with honors don’t be shy about telling your prospective employers about it during an interview. It shows that you are dedicated to working hard and doing well.

Don’t grow up too fast. If you are the typical 20-something college student you have a responsibility requirement to act like it. Have fun. Pull stupid pranks on your dorm mates. Stay up really late and watch movies. Once you graduate college, you have to enter the 9-5 world, and let me tell you… it ain’t pretty. Midnight burrito runs are a thing of the past. Enjoy the college lifestyle.

Do take advantage of EVERYTHING your school has to offer. I was heavily involved in various college activities. Sporting events, clubs, organizations, all at your fingertip. There are so many FREE programs available to college students, you would have to be stupid to not take advantage of them. You aren’t stupid, are you?

So there ya have it, some of my thoughts on the college experience. Take them with a grain of salt as they are only my opinions, and according to Girl Ninja, my opinion means nothing.

I’d love to get some more input on today’s post (especially if you are a college student)

1) For those in school, what year are you and where do you go?

2) For those that have graduated, any other Do’s or Dont’s you would add to the list?

3) Any other advice, support, or comments you would like to mention?

Dave Ramsey often repeats the popular phrase “Cash is king.” While I wont necessarily disagree with Dave, I’d be much more on-board if he said “Liquidity is King.” Two similar statements, but they mean a world of difference. Let’s look at an example…

Say Girl Ninja and I have been diligent little savers and we have $200,000 cash money sitting in our bank account. Then say we find a property that we want to buy valued at $180,000. Dave has always said he prefers people buy a house with cash (although he does tolerate 15 year fixed mortgages). Following Dave’s advice, you’d write a $180,000 check for the house and have $20,000 left in your bank account.

I don’t know about you, but there is no way in h-e-double-hockey-sticks I’d ever put 90% of my liquidity into an illiquid object like a house. That’s just as crazy as going to Vegas and putting $180,000 down on red. Don’t do it. EVER!

I will gladly pay a 4.25% fee (estimated mortgage interest) to keep the majority of my cash as, well, cash. It’s no different than when I had my student loan. At one point I had a $14,000 loan balance, but $16,000 in my savings account. I could have paid Sallie Mae off with the click of a few buttons. But I didn’t. What if I lost my job? What if my car was stolen? What if I had health issues? A paid off student loan isn’t going to put food on the table in the event I became unemployed. Money in the bank, however, allows me to pay my student loan payment, put gas in my car, food in my fridge, etc.

Instead of pay my loan in full, I mitigated my risk by paying bigger payments over a six month time frame. I’d throw a couple thousand at the loan each month, significantly reducing the balance, while still giving me time to replenish my savings. The peace of mind this strategy provided was well worth the $300ish dollars I paid in interest over those six months.

For this Ninja, liquidity is king. A house is only worth as much as someone is willing to pay for it (subjective), but a $100 dollar bill is worth one hundred dollars (objective). If you had $200,000 in the bank and you wanted to buy a $180,000 house, would you pay cash for it? Why or why not?

If my blogs url doesn’t give it away, let me spell it out for you…

I – H-A-T-E- D-E-B-T.

It hasn’t always been this way. Four years ago, I was impartial. I knew debt was bad news, but didn’t really know why. It wasn’t until I used this nifty little student loan calculator, that I realized the ramifications debt could have on my financial situation.

I finished college in 2007 and deferred my student loans for the six months I was able to upon graduation. I then consolidated my $28,000 balance with Sallie Mae to delay the payments for an additional month. This debt thing was pretty sweet at first. I got a four year education and only had to make $178 monthly payments afterwards. It didn’t really bother me that I was on a 20 year payment plan. I thought “My student loan payment stays the same, but my income is sure to go up. Sweet!” Basically I was a big fat stupid head.

I didn’t realize the implications of interest. I knew that I would have to pay off a larger amount than the original $28,000 balance, but didn’t really realize just how much it would be. When I crunched the numbers, I saw my total repayment was over $52,000. I just about crapped my pants. My first thought was “Is this legal? Surely they can’t charge nearly double my loan amount… can they?” Turns out, the devil Sallie Mae can do whatever she wants.

To further fuel the fire, I continued on my number crunching extravaganza and realized the $178 payment plan Sallie Mae put me on was also evil. Running the numbers revealed this tasty little morsel… $28,000 at 7% means I will be paying $1,960 in interest each year. If I made minimum payments each month I would pay a total of $2,136 each year. Do you know what this means? After two years of payments, my balance would have gone from $28,000 to $27,648. Yeah that’s right, after forking out about $4,200 in cash I would have only lowered my balance a whopping $352…bull$h!t.

I hate debt because it’s deceptively expensive. Borrowing money costs too much for me to want to flirt with it ever again (except for a reasonable mortgage). We all know debt sucks, we all know high interest rates suck, but do we all take the time to realize that only $350 of our $4,000 in payments actually went to lowering our balance? At first, I sure as heck didn’t, but you better believe once I saw the light, I was gonna do everything in my power to punch debt in it’s ugly little face.