Should I invest in a DRIP or pay off loans first?
Right now about 12% of my income (pretax) goes to my 401(k) and the rest goes to bills and making payments (usually double) on my student loans.
I am wondering if I should lower the amount I am investing in my 401(k) and put some of it into a few DRIPs. Or would I be better served to pay off my loans before investing further?
Thanks
Technically I realize you cannot “invest in” a DRIP, as it is an option for existing shareholders, but humor me…
OK, here’s what you have to consider: can the gains you make, ultimately, from your DRIPs or 401k, make up for the increased costs of your student loans? Secondly, drips are a quite nice device, but they’re not tax-exempt, like your 401k. And, you’re assuming that you can beat the market by investing in drips. Personally, unless your a sophisticated investor, gambling with your money sounds dangerous. Just my suggestion.