When I began my journey through nursing school I had to take out student loans like most people. After nursing school I was 14k in debt, which is unheard of, but due to

my hospital paying for my bachelor’s degree, I was only in debt with my associate degree. At that time, I dreamed of being debt free like most of us. Nobody wants to

worry about a monthly bill. I refinanced to get a lower interest rate at 2% and was able to pay it off with my savings I had accumulated for a few years. In my journey

through life I learned more and more about finance and wish I had kept that money.

I would have invested it into my retirement or into real estate and just paid my $110 monthly payments for the next 10 years. Since I paid off my loan I saved $1,458

(calculated with a loan interest calculator), but if I just kept paying on the loan and used that $14,000 for retirement for 10 years I would have took my $14,000 and turned

it into $39,752 (Roth IRA Calculator)! But because I would still be paying off my loan, I would minus $39,758 - $15,458 (the loan amount plus interest) = $24,294. Also

minus the initial invest of $14,000, which equals $10,294 profit. Would you rather save $1,458 liquid cash or make $10,294 in retirement? This example can also be

utilized for other debts such as a mortgage, or car payments.

Every year, inflation goes up 2-3%, but this June 2021 inflation rose a whopping 5.4%* and investing in a retirement account, on average, makes you 11% per year*.

Here is an example of normal inflation as of June 2021: $10,000 in a savings account on average makes 0.06% APY (annual percentage yield) which makes you 50 cents

a month all the while inflation of 5% is taking away 41$ of the value of your $10,000 each month. The government secretly lowers the value of your money because of the

increased inflation. You want to be able to take that money and put it somewhere so inflation doesn’t affect the value of your money.

*https://www.bloomberg.com/news/articles/2021-07-13/u-s-consumer-prices-increased-in-june-by-more-than-forecast

*https://money.usnews.com/money/retirement/401ks/articles/what-is-the-average-401-k-return

**This is for entertainment purposes only. Consult a financial advisor for investments or do your own research.

May 12, 2023

Natasha Osei

Passionate Nurse Practitioner | People person
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