As some of you know, I took out a student loan when I was back in Cegep for the purposes of investing. Currently I owe RBC $25 258 and, seeing as I finished my schooling last month, it’s become due (although, I’m not sure… shouldn’t they have emailed me or called me?).
I’ve decided that I’m not going to pay back my student loans.
Woah, what? You might be thinking. Well, I’ve thought this through extensively.
First of all, just the fact that I’ve been earning 5.5%/year when the interest rate is 3.5% should be reason enough. However, markets are unpredictably and so I don’t feel comfortable enough with that small of a spread for my decision to have been cut and dry based on the numbers alone.
If I were a perfectly rational person I would pay my loan back and live off of my savings because they are more than adequate to cover my living expenses for a very long time (if I stop going on trips and “shopping sprees” of $300). However, I am a normal irrational person and am freaking out that I will go broke. I haven’t been broke since fall 2005 and it sucked SO badly that I never want to return to that place again. And so I will take my $25 000 cushion and just bank it to reassure myself every day that I am not going to be destitute and homeless.
Finally, I live in a place where tuition is nominal. I can take a university course for like… $400. I can take a Cegep course for $150. I can, literally, stay in school forever at a very low cost and never have to pay back my loan. Technically.
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