This is a guest post from A.J. Clark, a long-time lurker at Get Rich Slowly. A.J. is a potential Staff Writer for GRS. He is a recent college graduate who writes software in the financial services industry, while trying to find his financial footing in the Real World.
$76,133.53 — I owe this total to various lenders, who decided four years ago that trusting an eighteen year old with this sum of money was a good idea. However, the original amount of money I owed was much greater ($107,822.33) and even I am amazed with the amount of debt ($31,688.80) I have paid off during my time in college.
Following my heart
A little over four years ago, as I was preparing to graduate from high school, I was in the midst of making a life-altering decision. I needed to choose between attending a public school a few hours from my home in Florida, or my dream school: a private institution in New York City, a school that I fantasized about attending ever since I was a child.
I would be the first person in my family to attend a traditional four-year college or university, and I wanted to make sure that the degree would allow me to live a better life than my parents, and someday achieve financial independence. I was worried that the public school that I had the opportunity to attend would not provide me with the proper set of life experiences that I needed to be successful in life, and I knew that the school in New York City would be able to give me a unique college experience, and put me in a strong position to succeed.
Putting the financial ramifications of my decision in the back of my mind, I decided to follow my heart, and go to New York City. However, I did not fully understand the financial impact of my decision until years later.
A baseball analogy
I liken my current situation to that of Chien-Ming Wang, who is a starting pitcher for the New York Yankees.
Wang had an atrocious beginning to his season, giving up over twenty earned runs during his first three starts. In each outing, Wang lasted no more than two innings or so, and by the time the Yankees decided to put him on the disabled list, Wang had an ERA of over 35.00.
In order to lower his ERA to an acceptable level, Wang would need to pitch a lot of scoreless innings. In fact, during a game earlier this season, an announcer made a comment that Wang would need to pitch sixty or more scoreless innings just to bring his ERA down to his career average of 4.16; needless to say, that feat would break many records.
My financial earned-run average
In a sense, my ERA is my collection of student-loan debt (the composition of which will be a topic for another post), which is barely manageable. In order to bring my debt down to a manageable level, I need to have five or more years of “scoreless innings.”
As many personal finance bloggers can attest, consistently completing scoreless innings is a difficult thing to do — one life emergency is able to impair one’s ability to “compete” financially going forward in life.
- Build an emergency fund?
- Contribute to a 401(k)?
- Be more frugal than a broke college student?
Starting so far in debt to begin with makes it difficult to do these things, though I’m trying to put my best foot forward in my quest for the elusive state of financial freedom. In fact, for the last six months, I have been devouring any and all information that I can find on personal finance, and have learned more or less what I need to do in order to achieve this goal.
Choosing to start behind
However, one thing that has become readily apparent is that unlike Wang, whose high ERA was not intentional, I chose to start behind. I chose to attend a private school in New York City. I chose to incur over a hundred thousand dollars of debt.
Although I am starting with a significant amount of ground to cover before I am able to reach a point where I am debt-free, attending college in New York City, albeit at a high cost, has provided me with many unique opportunities.
For instance, during my sophomore year of college, I was able to obtain an internship with a prestigious firm within the financial services industry. Since I went to college in New York City, I was able to work part-time at the firm during the school year, which ultimately allowed me to begin a full-time job there immediately after graduating — something that is relatively unheard of in this economy.
Much to learn
Growing up, I was taught that some things in life do not come easy, and that money is not the ultimate source of happiness. Although I believe I have a strong working knowledge of the personal finance arena, I know that I still have a lot to learn, and paying off my student loan debt within the next four to six years will be a difficult, if not daunting, task.
Given the opportunity, I would love to chronicle my journey towards finishing ahead (or more immediately, getting to the starting line) here on Get Rich Slowly, and share with the readers the personal finance knowledge I gain along the way, as well as any life experiences that I have relevant to the discussion. If anyone has any questions for me, feel free to leave them in the comments section, and I will respond as soon as I am able.
Chien-Ming Wang photo by Keith Allison.
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Thank you for the post. I can definitely relate to your situation and would like to read more.
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-1. Nicely written and I wish AJ the best but I don’t see the value in this post. I come to GRS for financial advice/tips and in this case, was disappointed to read 15 paragraphs that essentially told me that attending an expensive private college puts you in a financial hole. Is there anyone who did not know this?? At least pare it down to one paragraph if that’s your only point. Please keep up the good work and return to posting content that offers insight and value to your readers.
UPDATE: Ok, I just read through most of the other comments and I feel I need to be more harsh. What is the fascination with this post? “Great Job… best submission”… are you kidding me? Maybe I should write about how I chose to buy an Audi instead of a Volkswagen (fictional example btw). I expect it to be a more pleasurable driving experience but now I’m a little worried because I spent twice as much money. Was that interesting?? Just because many people can relate to the basic reality of having student loan debt doesn’t mean it makes for a good story. And the Chien Ming Wang example? This guy has yet to achieve anything significant and for the most part has been considered a bust. Once again… where are you going with this??
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As a recent college grad also obsessed with personal finance, I’d be really interested in hearing more on the subject since there isn’t a lot of material out there coming from people in my peer group.
I appreciate all the stuff I read from people who are in the biz/have been doing this for years, but it’s nice to have perspective from people my age too.
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Really good post!!! I can relate, but not with student loan debt. I attended college on full scholarship. I don’t say that to gloat, I’m just really grateful(in that aspect). BUT that doesn’t mean that I escaped the debt trap, because I didn’t. My husband (who paid his way through college with cash) and I still managed to accumulate over 95k worth of debt within the next few years after college.
So, I think that we all have lessons to learn in the course of our lives. A. J.’s journey of personal financial awareness just came sooner vs. later.
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Patrenia (154)–Your story isn’t at all unusual. Young people are particularly vulnerable to being lured into the debt trap.
Youth is optimistic by it’s very nature, and if you add a fresh college education to the mix, it’s easy to tell yourself that you can borrow now and pay for it in the future with your “unlimited” potential.
But potential is a promise and it isn’t unlimited, while debt is here and now and unwilling to wait for you to reach that potential.
I also think that heavy debt early in life has the capability to limit earning ability because of the worry and stress that come with being deep in debt. (That’s very real too!)
We really need to rethink the whole debt concept, even as it relates to education. It’s all that borrowing that forces the cost of everything to go up, then forcing the need for still more debt to pay the higer prices. At it’s core, it’s paying for today with tomorrows money, only tomorrow hasn’t gotten here yet. In the meantime, it’s a tough way to live.
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I wouldn’t comment, except that I’m concerned by the number of “best submission yet!” comments on this post… personally, I know a lot of folks like AJ, as I also went to an elite college and make a decent amount of money. I don’t think it’s particularly interesting to hear the story of “How I paid off a lot of student loans by landing a really great job straight out of school”. The baseball references also turned me off, and overall the writing style is still closer to AP essay than attention-grabbing blog post.
I come to this blog to read the wisdom JD’s picked up from many years of bad decisions. It’s fascinating and inspiring. If I want to hear from bright 22 year old kids who always make the right decisions in life, I could just join my school’s alumni association.
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This is the best guest post yet.
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I liked the post until I realized there were no numbers involved in anything. I am a numbers guy and agree with other posters who mentioned that paying off $75,000 on a six figure salary even in NY is not as impressive.
Based on the comment from the author that he paid off $30,000 by working two summers full time and putting 75% toward loans, that would mean he put $15,000 per summer to loans and thus made $20,000 per summer. Assuming even a full 3 months of work, that would equat to an annual salary of $80,000 for a summer intern who has not even completed their undergrad education. Unless the author can provide more details instead of fuzzy comments about how things are expensive in NYC, I do not see how people can relate to his current issues in future posts.
Also, as a side note to the author, in a potentially lucrative career like computer programming, you would be better off to devote your time to being amazing at your job than to working additional part time jobs for relatively low hourly salaries. The pay raises will pay off much better than those other jobs would. One of JD’s often mentioned blogs is the Art of Non-Conformity and its author writes about being extraordinary at your job on frequent occasion. I suggest reading those posts for your own development.
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@Matt (#157)
In addition to my summer salary, every windfall that has come my way (tax returns, bonus, refund from overpaying school) I have put on my loans as well. This has helped me make a significant dent in them. I do not feel that I should be required to list my balance sheet here.
As far as having another part-time job, the money would be a bonus to add on my loans. I genuinely enjoy writing and tutoring. I already work anywhere from 50 – 60 hours a week, and would not take on extra work unless it was truly enjoyable to me.
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@ChicagoShane (#152) and @Matt (#158), I completely agree. This post has really been given WAY more credit then it deserves. I am not trying to be mean (I in fact feel that I should stick up for you considering you are close to my age (24)). However, this post was very amateurish in my opinion. I hope that AJ’s next post is more substantial in terms of providing VALUE to our readers here (outside of your personal biography).
Why don’t you feel like you should provide more detail about your personal balance sheet? JD talks in specifics all the time (as do I when I comment). I want to pull for you AJ, but you really will need to be more transparent for GRS readers in order to provide value.
Also, if you are working 60 hours a week, I really don’t think you will be able to provide the necessary research and effort involved in blogging professionally.
Of course I will give you credit for igniting a fury of comments on the student loan subject; I have rather enjoyed reading them all. I can see how you would be able to provide a submission like this because there was minimal research involved etc.
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I agree that more specifics would definitely add value, especially when you’re coming from such a personal angle. I understand the desire for anonymity, but numbers and finances just go together, and if you can’t talk about that then I think it just leaves readers wanting. JD has extensively covered most generic personal finance topics already, so I’m not sure what exactly he has in mind for this guest writing position.
Just some food for thought. Anyway, this story (like the baseball analogy) still has much left to tell, so I wish you the best of luck.
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Hi A.J.
Thanks for the reply. I am 25 and also have student loans to contend with.
I agree with other readers that a younger voice would be refreshing.
PS: Ignore the haters.
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Hello,
These posts come straight to my email, and I have only visited this site a few times. I wanted to state that of all the potential candidates that I have read, I really enjoyed AJ’s perspective, probably because my wife and I are in a hole also. I would like to continue to read about AJ’s progress. I would imagine that the degree earned from this great school will pay off in the future, so it will have been well worth it. Good luck! Hope to continue reading your work.
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I thoroughly enjoyed this article, not only because of its style and good story sense, but in being able to relate to its’ content. I myself am a student saddled with debt — and even for those who have never been in this situation, I find all forms of debt aren’t all too different from one another. I agree that more specifics would have provided greater stregth and depth, but it did make a great guest post. (Just look at the variety and length of the comments it stirred up!) It’s a close call between this and that of April’s, but I still feel her article to be more experienced, more complimentary of JD’s writing style, and a little more focused. However, with a bit of practice, I could most certainly see the author himself with a blog of his own which would be a great source of encouragement and inspiration for those living through similar experiences.
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While I appreciate a writer closer to my age, the above statement didn’t sit well with me. I went to a public school and even with my scholarships, ended up with ~$30k in student loans. I bummed around Europe after graduation, ended up living in Dublin and working for Microsoft (no, I don’t have a com sci or software engineering degree). I eventually got bored, returned home, and got a job. Paid off the student loan in less than 6 months, bought an apartment-style condo 3.5 years ago in a hideously expensive area and will be paying it off at the end of 2009 because I combined my mad budgeting skills with a decent salary. That’s not too shabby for someone who didn’t attend a private school.
So…
Private school – no
Life experiences – lived in 5 countries on 3 continents
Successful in life – looks like it so far
Frankly, you’re young and you sound like it. I think a few more life experiences would rectify that.
ETA: The student loan debt wasn’t actually $30k. A lot of it was losses in the stock market. Ah, Nortel. Had I not been so greedy back then, I wouldn’t have owed anything after graduation.
ETA again: Moral of the story: don’t get student loans if you don’t need them. I thought I’d be smart, take out the student loans, play the stock market, collect the returns, and repay the loans before the banks started charging interest. I learned my lesson, painful as it was.
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Huh. This post was vague and boring, something that thousands of other people could/would write, and with a pointless baseball analogy to boot! I don’t think this kid has a whole lot of wisdom to impart, and his style’s much less engaging than is J.D.’s.
MAN, that sounded harsh. Eek.
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As a recent NYC college graduate I found this writer’s point of view unique. Many of my peers, myself included, don’t have a concept of money that we can not see (student loans, credit cards) and are getting into debt very quickly. I would like to hear from a young voice, it seems that there aren’t any out there that I can relate to. I don’t want to hear just how to save a few pennies or dollars here and there- especially because many of these posts aren’t very helpful if you are living in New York City- but rather how to change my attitude towards money and see the discussion of saving money grow among people my age. I also would like to hear from someone in New York City because it’s a place that seems to promote spending and buying at every corner!
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Wow… I am a lurker but I have to speak up, for the same reason as already mentioned. While I also appreciate the young perspective (I’m in my late 20s paying off the student loans as well), this poster presents absolutely no relevant tips, skills or helpful advice. The baseball analogy was to me a very weak attempt to enhance the writing, which itself is quite weak. I just feel the perspective was very naive, and does not speak to a very big audience. I enjoyed April’s entry MUCH, MUCH more. She actually knows how to write.
Sorry, sounds harsh, but I’m just shocked by how many people enjoyed reading this!
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I finished college in 2004 with an undergraduate degree and a professional degree. On the day I graduated, I had approx. $83,000 in student loan debt. I paid it all off in 4 years. Without any assistance from family, etc. To all of those just finishing college now, it can be done.
Granted, I was employed during those 4 years, and I was living in downtown Toronto, not NYC, but still, it took some serious planning on my part. My only source of income during those 4 years was my salary. I started at approx $45,000/yr, and finished the 4 yrs at approx $75,000/yr.
I made some financial decisions that were viewed by certain friends and colleagues as downright bizarre at the time (multiple roomates, walking everywhere, cash budget, etc), but I held my ground. And had a reasonable standard of living along the way. You can do it too. Good luck.
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This is a great column. I found it well written and introspective, which honestly, I would not expect from a recent college graduate! I worked in academia for a time, and it seemed that students came in ill-prepared and often left without a clear goal. AJ seems to have made excellent choices regarding his education and career goals. I wish him the best of luck and hope to be reading his columns here on a regular basis.
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Debt can make sense. So many people that read these columns have problems with mindless consummer debt that we seem to get focused on always avoiding debt. A.J. took a big risk by taking this much debt to go to school. BUT, he had some clear goals when he did. He chose a degree program that would lead to a solid career with many opportunities. He chose a school that would likely help him to get those opportunities. And he is young, healthy, and smart, so he has a lot of time to recover if it doesn’t work out as he planned.
I grew up being taught by my depression era parents that debt was pretty much always bad. My first two cars in the mid-70s were clunkers that I bought for cash. However, neither was reliable and I had to beg rides to work more often than I’d like to admit. Finally, I realized that borrowing some money to buy a car that that was reliable made financial sense, as long as I had a plan on how I would pay it off.
Still the only other thing I ever borrowed money for in the next decade, was my first home. Then one day, a young man working in the university laboratory where I worked, came and told me that he was quitting his work study job and borrowing the money instead. He explained that he was a computer engineering student, that it was going to take him longer to finish school if he kept working – and that it would therefore cost him more money to finish. And he would make way more money at his first job when he did finish than he could ever make in his campus job.
A light bulb went off in my mind. He was right. He had those important aspects of any good loan – the loan was for an investment in his future and he had a plan as to how he would pay it off.
So whether you agree with A.J.’s analysis of his debt or not, this is a great post that gets beyond the frugality aspect of money management. I’m a bit older than most of the readers here and I still avoid most debt – more so as I approach retirement, but there are times when it makes great sense.
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I really enjoyed this posting. However, I wish the recent college grad was in another field, say Social Work or Education. I appreciate A.J.’s efforts, but fully believe that he’ll be able to pay off his debt rather quickly due to the high paying salaries in that field. However, there are other college grads out there who always dreamed of going to a private school to study something less lucrative as they knew it was a top program, would help propel their careers, and was filled with top-notch research/professors that would help them to become better in their field. They took out the student loans to realize their dreams, and now they will strive to make good on those loans with a smaller salary and still hoping to realize the “American Dream.”
Great post. Great guy. I’d just rather read about someone (perhaps a Social Worker) who has to work a little harder (like me) to pay off those student loans from their dream school (like me).
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Great post. I have found myself in the same situation after 4 years of Pharmacy school. The mountain of debt I have amassed is incredible and repaying that debt over the next 25 years is a hard proposition to swallow. I’d love to be done with it sooner. I’d love to here more from you AJ.
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First off I think the article is great simply because I can very personally relate. After much argument I decided to move away for school while many of my high school friends stayed living with mom and dad and hung out with the same high school people at local schools. Four years later these kids had the degree with little debt but are facing huge anxiety issues about being on their own for the first time/not knowing how to cook themselves a decent meal. This isn’t saying that all the financially-savvy kids who did this are worse (or better) off, they just chose a different path. I wouldn’t trade my higher cost experience (50,000+ debt) for the world. I had to scrape by with loans only covering tuition and housing and I got to learn how to live frugally on my own while going to school in my dream city. Yes I have a huge financial burden but I also have the confidence I need to take on responsibility that for me, came from being completely independent after high school. I hate when my friends back home scoff at school debt, I realize it’s all for the same credential but you’re only young once and for me, life is too short to let opportunity pass by when you can still responsibly grab it (I chose a medical career that earns a substantial salary). In short, love the article and want to know so much more about someone who chose a very similar path.
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