Wednesday, October 21, 2009

A Most Important Day

Today I paid off my student loans, twelve years early. I graduated college in May, 2001, so it has taken me eight years to pay back the $23,000 of debt.

When I graduated I had the option of selecting a repayment plan. I could choose between the same monthly payment for 20 years or I could start with low payments that would graduate to higher payments later on. I would pay more in interest (overall) with the latter plan, but I selected it since I knew at any time I could just overpay. This was a wise decision as it allowed me to do really interesting things in my young adult days without worrying about finances. My plan, which is exactly what happened, was to eventually get a job that paid real money and just knock out the loans quickly.

This is a pretty important moment in my adulthood. Perhaps the most important yet for financial or love turning points. I can't help but look in both directions to assess the significance.

This debt has been an albatross since college. The interest rate was low, but owing money is just no good. It was always hard, though, to draw a connection between the large sum of money I owed (when it was over $15,000 I just couldn't even comprehend it) and its connection to me. What it meant, of course, was my college degree. But for the jobs I have pursued, that degree (major in Business Administration with a concentration in finance) didn't matter much. Since I wasn't applying for finance-industry jobs, the relevance of my degree seems have been a credibility inference from the highly-ranked university I attended.

So since I am not using my really expensive finance degree, do I regret getting it? That's a pretty hard question, the one of regret. Especially for something so big as an expensive, four-year period of my life. I know people who insist on living their lives without regret. It sounds nice, but mostly I think that's just a cop-out to avoid admission of bad decisions. It's an easy way to say "I love the person I've become" but it ignores the other [equally great/better] person you could've become with different decisions. So here's what I think about my college experience: I would do it differently. I would go to college, absolutely, but I would study something different at a different university. My college groomed its students for a life that I will never lead. I should have listened to the people who insisted that I do what I love (outdoors) instead of doing what I thought I loved (something that would pay me a lot of money). Or I should have concentrated on a foreign language. I can think of no more marketable skill in my transient life than the ability to communicate in another country.

But it's taken me eight years of adult life to learn what I'd wished I'd known 12 years ago when my outlook on life (make money = be happy) was incorrigible. The conclusion I've reached through living most years in poverty is that money doesn't mean freedom, mostly it just complicates things. So while regret is probably a fair word, remorse is not. I can hardly hold a decision this big against my 18-year-old self.

I didn't end up using what I excelled at during college - trading (options/stocks/and those fancy derivatives that cut your portfolio value in half last year) - but it's not fair to paint the college experience a wash. My time on the crew (rowing) team was arguably more valuable than my academics and I fully credit it with the dedication I have developed to health and running in adulthood. I will refrain from mentioning everything else one gets from a college experience because my point is to describe how my experience at my school differed from another university.

Ironically, now that I have paid off the degree, I get to start using it. From now on, my money is mine. I can invest, buy, and give away what I want. And as long as I stay in Japan I will be earning real money and I'll get to make decisions about investing (as opposed to some of my past jobs when I was just trying to survive). Fortunately my upbringing and college experience have left me with firm confidence in all matters money. I know how and where I want to diversify. And I have a thinly tentative goal of one day accumulating enough money to buy a piece of land or a house somewhere to serve as a home base. But as long as my parents stay cool with letting me store my permanent belongings at their house I will have nothing to do with my money but save it.

Thank you, Japan, for bringing me this day of freedom.


Cliff said...
This comment has been removed by the author.
Cliff said...

Dude, congrats! I hope to have a similar post sometime in the beginning of next year.

As for regrets, I actually think you should try to live without them. I can think of a few things I truly regret, but I don't regret not going to the college I went to, studying what I studied, and getting the loans I did. If I could do it now, I would do it differently of course, but it's exactly because of the path I chose to take at that time that has led me to where I am right now.

As for having the freedom to invest, I thought you are not allowed to invest in America if you are not earning any income there. Or is that IRAs only?

Justin said...

Dave - Congrats - I remember this day in my life a few years back. Its so great to be debt free! Now you truly have no obligations financially!
I'd go with the land before the derivatives, but that's just me ;)

Wren said...

As usual, great post, but this one esp. so.

(P.S. If you are looking for investment opportunities, I hear great things about this company.)

Liz Brooks said...

I agree with you about people who claim to live without regrets. I've long considered that assertion a cop out.

Also, I paid my own way through college without taking any loans, and I still have regrets about it (especially my major). Maybe most 18-year-olds are simply too inexperienced to make excellent long-term life decisions? Heck, I still consider myself too inexperienced to be making some important decisions.

Anyway, best of luck to you on your hunt.

Dave said...

Thanks for the comments on this post everybody.

Cliff, I want to respond to your question about investing in America: You are definitely allowed to invest in America even if you are not earning income there. That rule only applies to IRAs.