Q:

Hello Dr Joel

I have a quick question. In the last year I have opened my own practice and done pretty 
well. I have accumulated enough money after one year in practice on my own to pay off my 
loans. Should I take the money and pay off my loans or invest the money and just make 
payments on the loans as part of my practice overhead?  I would also like to let you know 
that your book Smart Start was a very important part of the success of my new practice. I 
hope you are still teaching your ethics class at Life and are recommending your book to all 
new grads. It's the best!  

A:

Thanks for the e-mail .. I will be sure to check and place your e-mail address on board 
again. I will send below some recent e-mails. Great work being able to pay off your 
student loans. As a business move .. it may be beneficial for you to continue paying off 
your loans as the interest is tax deductible if used as a business expense. The other funds 
can be invested (be careful where you place it) and generate more. Obviously the emotional 
move would be to pay it all off and have it off your back. So you make the call.

What I can add is simple. Th stock market is volatile .. it has its ups and downs and even 
today there are some stocks that are down from their historic high .. but even at this low 
rate it is high. It can go even lower eating at your potential and real profits. If you place the 
money is a secure fixed income .. such as a CD .. you are assured the principal and 
interest. If you wish to place the market somewhat safer .. you can place the funds (dollar 
cost averaging) into a SP Index Fund .. I recommend the Vanguard Index Trust 500. This 
will mimic the stock market and it has very low managemetn and dividend fees.

So .. after all that. Decide if you need to make the buiness or the emotional decision .. that 
is your call

Have a Great Day

Dr. M