And Speaking of Paying Down Loans . . .

Yesterday I talked about Uncle Sam paying down his debt. Here are two instructive notes on the subject from much more personal points of view.

From Andy D: “Regarding the pre-payment of loans and such, I have to agree with you. Last summer I came into a nice amount of money — a little more than $50,000. The stock market was hot and my new broker was promising me the moon. This was back in June.

“Instead of putting the entire amount into the market, I paid all of my debts and invested the balance with my broker. At the time I felt that the return on the money used to pay off the debt would be more of a psychological benefit than a monetary one. I had approximately $20,000 in debt at the time. I figure that by paying that off I have avoided paying $1,500 in interest to date.

“In the meantime, I invested $30,000 with my broker in individual stocks. The balance of that account today? $23,500! [Ah, the joys of the full-service broker. — A.T.]

“Besides the better return on my money that I got by paying off my debt [saving $1,500 versus losing $6,500], the peace of mind that comes with being debt free is absolutely amazing. I have a greater sense of freedom than I did when I was in debt, plus the lack of monthly payments has given me an immediate increase in my standard of living. Thanks again.”

And from Michael Logan: “To pay down my student loans, I have done several things to cut back my monthly expenses. I quit my subscription to the New York Times. (This was very painful for me to do). Savings: $40.00 monthly. I got rid of call waiting and caller ID. Savings: $10.50 monthly. I changed my local calling plan (I found out I don’t make many local calls). Savings: $20.00 monthly. Over the next 12 months, this will lead to $846 in savings. I don’t have much else to cut in the way of fat. Now I’m looking at ways to increase my income. Also, I plan to borrow a copy of The Only Investment Guide You’ll Ever Need from a friend. Savings: about $12.00.”