Tuesday, December 22, 2020

where to from here?

I am now free of scholastic debt. I spent a lot of time, last night, just sitting in my darkened apartment, shaking my head in happy wonder at the fact that I'm now liberated from a twenty-year-long imprisonment. Not entirely trusting the idea that I really am free of this debt, I just signed in to Navient once again, specifically to look up the big "What happens now?" section of the FAQ. Here's what I discovered:

Loans Paid in Full

Once a loan is paid in full, consolidated, sold, or transferred, the loan's status is reported to consumer reporting agencies.

Note that for 30 and up to 60 days after a loan is paid in full, the status may continue to reflect "In Repayment" online.

The credit-reporting agency that tells me my credit-rating status recently said my rating had dropped, probably because my credit card, with its limit of almost $10,000, is getting close to 80% capacity. That doesn't alarm me; paying back the almost-$8000 balance will be a breeze, and psychologically speaking, it's nothing like the emotional burden that came with being saddled with massive scholastic debt. Still, it disturbed me that the credit agency hadn't been factoring in how close I was to zeroing out my debt, so I felt a bit scandalized when, around two weeks ago, I got the notice saying my credit rating had dropped a bit. Well... according to the above FAQ response on the Navient site, Navient won't report my paid-in-full status for up to 30-60 days. In other words, my credit rating ought to shoot up significantly in about two months.  I fully expect to be over a score of 800 (the max is 850), especially once I start paying down my credit-card debt over the next few months.

What to do after that?  Well, people are telling me to get investing, but before I can get investing, I need to get saving:  that's Priority Number One.  Once I have a few thousand to play with, two things need to happen:  (1) I need to keep on saving enough money for my emergency-funds account, which is supposed to have 3-4 months' worth of my salary in it to tide me over in case of huge, life-changing events, and (2) I need to be investing in safe-bet alternatives like index funds, which I've seen several online investment gurus talk about.  I kind of wish my friend Kent Davy were still alive; he was a career investor, and his financial advice could have served me well.

My emergency-funds account will need to be at around $20,000, I think; that's a rough reflection of four months' pay.  As for investing... the scrupulous financial advisors warn that money doesn't appear instantaneously; it has to snowball slowly, and you need to be constantly curating your investments and not merely trusting that passive income will roll your way in a happy torrent.  I've seen some gurus talk about real-estate-related investments, but those seem like a hassle—possibly even a hustle.  Index funds seem more doable; I'll do more research and report what I've learned once I've learned it.  Like it or not, the old dog is going to have to learn some very new tricks.  More later.

1 comment:

John Mac said...

Ha! First world problems! It's great to have options. I'm no investor, I always played it safe in IRAs and the like. So it seems your first step will be to figure out how much risk you can endure and the rate of return you are seeking consistent with that risk factor.

Congrats again on your freedom. You've earned it!