You are a recent Chicago graduate, and you left college with outstanding student loans of $50,000. You have savings of $10,000. What’s the best use of them?
Here is seriously meant advice from
Dr Pangloss Ian Ayres of Freakanomics fame:
Most young college and professional school graduates have amassed significant student loans, and many more take on home mortgages. But Barry [Nalebuff] and I now believe that many of these savers would be wise to expose themselves to leveraged stock risk rather than merely use any savings to pay down existing debt.
What can I add to this?
- On your second date with someone you really like, use your margin investing to illustrate your financial acumen.
- If the investments go sour, and Enzo and Igor come calling from the debt collectors, remind them civilly but firmly that you can’t get out of your student loans by bankruptcy.
Commenters are invited to offer further advice to young Candide.