Joe Mihalic paid off off $91,000 in school loan debt in seven months. $22,000 came from liquidating stocks and his IRA (or, SILVER BULLETS), but the rest came from taking on extra jobs, renting rooms in his house, selling his stuff, and cutting his spending down to only the necessities. This makes sense and sounds promising, except: “Necessity” is a very broad term, and I tend to be generous in my definition of it. Also: He had a Harvard MBA and was making six figures. So there’s that! Not totally applicable or copy-able for all of us! But it’s his personal journey. Epic.
@mlh I think you should just do what works for you. Mihalic paid $22,000 towards his student loans, but only $10,000 of that money paid off the principal—$12,000 went to interest. Very frustrating! He’s still young, and now that he’s paid off that debt, he can invest the money that he would have been paying in interest into IRAs and other investment accounts. I think he did what was right for him.
@Mike Dang I’m sure it was right for him, but there are max contributions for IRAs and those are reduced when you have high income. So replacing an $8000 IRA could take 2 years! And that’s regardless of how much extra he now has available.
It’s insane to me that an already-wealthy (he had two cars and a motorcycle! and a house!) white man with an effing MBA from Harvard still had to go to such extremes to pay off his debt. And also felt so hopelessly trapped by his debt. If a rich white, elite-educated American man can’t make it in this world, who the hell can?!
As a person with about a quarter of the amount of debt this guy had (but also I don’t have an MBA and probably have no hopes of making more than $25k once I actually find a job), this really bummed me out, but not because he had so much debt? I’m down with consuming less and cutting out expenses, but bringing a flask to bars and missing good friends’ weddings when you’ve chosen a totally arbitrary time limit to get yourself out of debt seems like a) the worst year ever and b) being kind of a drag? Maybe I’m just bitter since I’ll probably have to spend ten years paying off my significantly smaller amount of debt, but couldn’t he have taken, like, three years instead? Plus he sold a lot of shit that a lot of people don’t have at all. I think it’s, like, exciting and everything that he’s not in debt anymore, but maybe if he hadn’t bought two cars, a motorcycle and a house he would have been in less debt to begin with?
@lizpie – Yea and that video was only about student loan debt. Maybe he has a mortgage and a car loan. I think it’s very important to get rid of student loan debt when you look at how much power the student loan people have on your life.
They can go after your Social Security for Christ Sakes.
He was so desparate to get rid of his debt that he made some pretty questionable financial decisions.
Unless it was a Roth, liquidating his IRA meant a 10% penalty while also increasing his taxable income. Then he also stopped 401k contributions, again increasing his taxable income, while at the same time leaving free money on the table in the form of company match.
He managed to pay off some pretty low interest loans rather than taking them to term which is great. But if he used his MBA Excel skills, there’s probably a better solution that could’ve avoided those tax events.
In my job I work with men (and a few women) who are EXACTLY like him. I’m almost tempted to check to see if he works for my company.
At the beginning I was tempted to bash him for being a priveledged overpaid douche, but I really do have to give it to the guy. He nutted up and did it. I respect you, sir.
@elizabeast Well, I can tell you one thing: this dude is based in Austin! It was the “pedi-cab” bit that tipped me off, and when I looked in the background of those shots, I could see the Frost tower that is an iconic part of Austin’s skyline. So….if you move to Austin, maybe you have a chance!
I’m baffled by the negativity in some of the comments here. He wanted the debt gone. He didn’t want to pay any more interest. So he took on a pretty austere lifestyle that few people I know would be able to maintain. I’m impressed.
@ilovetobudget It’s his choice what he wants to do with his own money, but it reflects a pretty weird attitude towards money and debt, especially for a Harvard MBA.
I mean, imagine if this guy became CEO of a company that had, say, $10m in annual revenue and $6m in long-term, low-interest debt. If his reaction was “OH SHIT! Lay everyone off and cut operations to the bone until we pay off all that debt!” it would be pretty bizarre, no?
Basically it seems like Americans have debt bulimia — binge one decade, purge the next. We need to develop a healthy attitude towards debt!
@stuffisthings I mean, if I heard about someone who wanted to buy a house but hated debt and lived like a monk for 15 years to save up $300,000 to buy one in cash, I’d be impressed — but I’d still think they were crazy.
Liquidating your IRAs to pay off student loans does not make any sense to me. I’m curious what Mike Dang has to say about this.
@mlh I think you should just do what works for you. Mihalic paid $22,000 towards his student loans, but only $10,000 of that money paid off the principal—$12,000 went to interest. Very frustrating! He’s still young, and now that he’s paid off that debt, he can invest the money that he would have been paying in interest into IRAs and other investment accounts. I think he did what was right for him.
@Mike Dang I’m sure it was right for him, but there are max contributions for IRAs and those are reduced when you have high income. So replacing an $8000 IRA could take 2 years! And that’s regardless of how much extra he now has available.
It’s insane to me that an already-wealthy (he had two cars and a motorcycle! and a house!) white man with an effing MBA from Harvard still had to go to such extremes to pay off his debt. And also felt so hopelessly trapped by his debt. If a rich white, elite-educated American man can’t make it in this world, who the hell can?!
@gigglefest It’s insane to me that an already-wealthy (he had two cars and a motorcycle! and a house!)
Was he really wealthy or did he have a nice line of credit?
I think how we define wealthy differs.
If a rich white,well built, elite-educated American man can’t make it in this world, who the hell can?!
That’s a very good question and it looks like few us of can.
@gigglefest he didn’t have to do this at all. paying off your student loans in 7 months is 110% optional.
@blahstudent the standard repayment plan is 10 years, and there are 10 and 25 year options.
As a person with about a quarter of the amount of debt this guy had (but also I don’t have an MBA and probably have no hopes of making more than $25k once I actually find a job), this really bummed me out, but not because he had so much debt? I’m down with consuming less and cutting out expenses, but bringing a flask to bars and missing good friends’ weddings when you’ve chosen a totally arbitrary time limit to get yourself out of debt seems like a) the worst year ever and b) being kind of a drag? Maybe I’m just bitter since I’ll probably have to spend ten years paying off my significantly smaller amount of debt, but couldn’t he have taken, like, three years instead? Plus he sold a lot of shit that a lot of people don’t have at all. I think it’s, like, exciting and everything that he’s not in debt anymore, but maybe if he hadn’t bought two cars, a motorcycle and a house he would have been in less debt to begin with?
@lizpie – Yea and that video was only about student loan debt. Maybe he has a mortgage and a car loan. I think it’s very important to get rid of student loan debt when you look at how much power the student loan people have on your life.
They can go after your Social Security for Christ Sakes.
He was so desparate to get rid of his debt that he made some pretty questionable financial decisions.
Unless it was a Roth, liquidating his IRA meant a 10% penalty while also increasing his taxable income. Then he also stopped 401k contributions, again increasing his taxable income, while at the same time leaving free money on the table in the form of company match.
He managed to pay off some pretty low interest loans rather than taking them to term which is great. But if he used his MBA Excel skills, there’s probably a better solution that could’ve avoided those tax events.
In my job I work with men (and a few women) who are EXACTLY like him. I’m almost tempted to check to see if he works for my company.
At the beginning I was tempted to bash him for being a priveledged overpaid douche, but I really do have to give it to the guy. He nutted up and did it. I respect you, sir.
The Awl had something about this dude starting the video game of life with the difficulty level really low.
My mother would like to know if this industrious young man is single and interested in a young Jewish girl from Pennsylvania.
@elizabeast Honey if not you then me :) Chocolate is sweet!
I like that he made a goal and stuck to it although it must’ve been very painful along the way.
@elizabeast Well, I can tell you one thing: this dude is based in Austin! It was the “pedi-cab” bit that tipped me off, and when I looked in the background of those shots, I could see the Frost tower that is an iconic part of Austin’s skyline. So….if you move to Austin, maybe you have a chance!
If I owned a company, I wouldn’t trust this Harvard MBA to go anywhere near my finances. Jesus.
I’m baffled by the negativity in some of the comments here. He wanted the debt gone. He didn’t want to pay any more interest. So he took on a pretty austere lifestyle that few people I know would be able to maintain. I’m impressed.
@ilovetobudget It’s his choice what he wants to do with his own money, but it reflects a pretty weird attitude towards money and debt, especially for a Harvard MBA.
I mean, imagine if this guy became CEO of a company that had, say, $10m in annual revenue and $6m in long-term, low-interest debt. If his reaction was “OH SHIT! Lay everyone off and cut operations to the bone until we pay off all that debt!” it would be pretty bizarre, no?
Basically it seems like Americans have debt bulimia — binge one decade, purge the next. We need to develop a healthy attitude towards debt!
@stuffisthings I mean, if I heard about someone who wanted to buy a house but hated debt and lived like a monk for 15 years to save up $300,000 to buy one in cash, I’d be impressed — but I’d still think they were crazy.
This article mentioned the “Harvard MBA” so many times I felt like I was reading the guy’s OKcupid profile.