I have a student loan at 2.9% (I've already paid off the other student loans which were at 5.5% and 6.8%). I like the idea of being debt-free by 30 (in 5 years), which would mean paying the loan off at ~3.3x the required rate. I could also just make the minimum payments, but then it would take something like 15 years to pay it off.

Anyway, my question is, what's the inflection point to where you should stop worrying about paying the debt off as quickly as possible? Obviously it depends on how much you think you can earn by investing the money instead, but is there a general rule? 4%? 5%?

The problem with all the advice in this thread is that we are writing it from a US point of view.

Let's be realistic here. Sweden is a pretty socialist country with all sorts of benefits and loopholes one can take advantage of.

Before doing anything else, you should research what people are doing in Sweden and how they are gaming the system. You need to ask this question on some Swedish forums.

Had a question I might as well ask here:

I'm a 22 year old student that wants to start investing $100 per month into just an index fund (if anyone has better recommendations go ahead). How do I go about this? Do I deal with my bank and tell them each end of month to withdraw $100 from my chequing account and put it into an index? But I guess they'd charge me a fee for this?

I'm in Canada btw.

It'd be interesting also if I could invest in some blue chips but I don't see how it'd be possible to do this with the $100 per month withdraw deal? Would I have to open up a brokerage account and buy stocks myself?

How can people think like this? They must love being poor for life.

All the major Canadian banks have both discount brokerages and full service brokerages. You would need to open up an account with the discount brokerage.

At $100 a month fees will generally make this a horrible idea. There is one possible exception -- Scotia Bank's discount brokerage iTrade offers commission free trading on a series of about 50-60 ETFs. There is a almost 100% certainty at least some of these are index ETFs. You'd need to look into if there is an account minimum.

You have the same issue with fees but again iTrade offers all those ETFs so some of them would allow you to at least target sectors / industries.

If this is the only investing you do then you should be doing this inside of a TFSA.

Is there anyway I could just invest $100 a month without getting crushed by fees? I've always heard the standard ''start investing early, compounding etc etc'' but what kind of investment are people thinking of when they mention this? Because I want to start saving/investing but can only afford $100 or $150 per month at the moment..

It's very likely that the 1.5% loan is a variable interest rate. My wife had one that had something like a 7% rate, so we were paying it off fast, and now it's dropped below 3%. It's common in the US to have NO interest until you graduate for subsidized loans. I don't think that's the case here. But even private loans have super low rates now, so it's very believable. But if interest rates go up, he may get screwed. But he can always just have enough money stashed away that he could throw at the loan if the rate goes up high.

MXdotCH,

I have no idea what people mean when they say stuff like that. I have never been a fan of investing small amounts because of fees -- when I opened my first account minimum fees were about $50 and I don't believe I ever had a trade with less than $125 commission. Now I think you can get trades done for $9.xx and if you have a decent balance or a lot of trades $6.xx.

Even $9 though out of $100 is ridiculous. If that is all you can invest then maybe do it every six months for $600 rather than every month.

Beyond that iTrade might also work. They have commission free trades on 50-60 ETFs. I looked up the list and CRQ and HXT are both Canadian index ETFs. They have CLU and HXS for US index. They also offer a Claymore international index ETF. You can buy and sell these and 50-60 others (mostly Claymore but some iShares and Horizon ETFs as well) with zero commissions. The only thing you'd need to look into is if there is a minimum requirement to open an account.

Yeah true in a 30 year span between like 1960 to 2005 that would have happened. Maybe even more than a million. Compounding interest.

But putting away 5k now for the next 30-40 years I highly doubt will yield anything near the gains you could have gotten in the past 40-50 years for 30 years.

cliffs - It won't happen going forward because stock market is going to crash and burn. Interest is a horrible thing.

Without some more information (expected salary, cost of living where you want to live, etc), people can only recommend so much. I will tell you I went through exactly the same predicament, in a much worse scenario. I had bills and more debt to deal with.

I'll give you general advice though - start investing/saving right now. First paycheck. Take it off the top and live within that means. If you can't save 5-20% of your paycheck, you can't afford to live your lifestyle, period.

I'm all for having fun when young and enjoying it. The only issue is there absolutely will come a day when you are talking to someone your age and they have 5x the assets you do and you wonder where you went wrong. Without some luck or some big breaks later, you WILL be absolutely behind. That's not a position you want to be in.

It's really hard the first 5 years. Everything you make goes right out and you're trying to live the best lifestyle you can. You have a choice: 1) spend everything you make and enjoy your life to the fullest. 2) sacrifice in a few categories but still live decently and have some savings/retirement along with it.

It's your choice, no one can tell you what to do, but peace of mind 10 years from now that you're "on track" is more important than you think. I'm 36 years old and am happy with what I have in retirement so far, I've spoken to people who are around my age who have 1/10th of what I have in retirement and it's pretty shocking. Their sentiment is "retirement is so far away, I need to use my money right now". You don't miss 100-200 a month all that much, but 10 years later when you have 50k you'll be glad you did it. It snowballs, and it's not something you realize until it becomes a significant number, and that takes years and years to do. I have well over 200k in assets with some luck and some dedication to saving, something I've never even dreamed of 6 years ago (although I have to admit we have dual high incomes).

You always think you don't make enough. That feeling never goes away. I've had this conversation countless amounts of time whether it was about buying a car, buying a house, getting married, etc. If you could only make over 50k, you'd be alright. Then it's if you could just make over 75k, you'd be alright. Just need to break 100k, I'll have plenty. Guess what? It's always there, you always want just a little more to make life "comfortable". It keeps changing, and your targets change with it. You go from "needing" a 150k house to a 400k house, and your kid needs to go to private school and then a top 10 college. You never feel ready, so just jump in and do it. Start saving.

Sign up for the 401k or retirement plan at work the first day you walk in and put in 5% at least (or whatever the company matches). Of course we have no idea what they offer in retirement in Sweden, but that's what they give us here in the US. That's my advice.

iTrade looks good but I'd prefer dealing through my current bank to make things easier. Think I should just set up a savings account and have $100 transferred to it every end of month and invest all of that once every year? That seems kind of ridiculous though..

You don't have to setup things like that. For example, at Vanguard you can have an account and get charged no fees for periodic investing.

There is a minimum amount to invest into a fund, 3k, but if you set it up so that you can put in say 100 every two weeks, you can start with just that (I'm pretty sure, it's been a while since I looked). So you can set up a retirement account by just putting in that 100-200 a month but automatically deducted (it must be automatic to avoid the min investment). They don't charge you for every time you put in the money, so it goes in fee-free.

The issue is that this only works with vanguard's funds. If you wanted to buy, say, a fidelity mutual fund you'd have to open a brokerage account within vanguard then get charged for every trade, so it wouldn't be optimal.

I expect that other banks will follow Scotia's lead. I have heard rumors that BMO plans to allow commission free trading on some ETfs.

I have not slept so too brain dead to do the math but with respect to frequency that is a simple math question that will depend on what the commission is at your bank's brokerage and what you expect the ETF to do over a certain period of time.

Def wait til you have minimum $500 before buying anything. This will save a killing on fees. You absolutely need to get an online brokerage account. Doing it through your bank will most likely kill you in fees. If nothing else just stash the money in a savings account or CD until you have enough to not be crushed my fees.

cross posted due to error yesterday on my part:

I had no idea Vanguard had opened in Canada. Based on the website https://www.vanguardcanada.ca/individual/portal.htm it seems like this is a recent development.

Edit: There doesn't seem to be an option to invest directly. The site seems to be just to announce that Vanguard ETfs will be trading on the Toronto exchange but you still have to buy them through a broker.