“Pay off your debt first. Freedom from debt is worth more than any amount you can earn” — Mark Cuban

July 18th, 2020, 8am pacific standard time. I no longer work at an office, my commute has been reduced from a 1 hour CalTrain ride to a 30 second walk from my bedroom to my home office. I log into my Earnest student loan portal, something that I do every morning, to check the payoff balance of my student loans, originally $170,000. …

“I used to care what people thought about me until I tried to pay my bills with their opinions” — Unknown

It has been 90 days. No, i’m not talking about sobriety, the elimination of junk food, or how many days in a row i’ve meditated (all pretty cool goals). The 90 days i’m referencing is a financial disease which impacts 80% of Americans: student loan debt. It has been over 90 days since i’ve paid off over $170,000 of student loan debt and embarked on a journey of debt freedom and wealth creation.

In the middle of a pandemic, economic uncertainty, a sideways stock market, and rising unemployment, being debt free..not owing anyone anything..being able to use your income to invest/save/give is the saving grace that has kept my wife and I sane in an insane 2020. I’ve thought alot about how to best summarize my journey towards debt freedom and wealth creation into a series of “actionable” bullet points that one can apply in their day-to-day journey towards debt freedom. I am convinced that if an individual who is currently in any type of consumer debt were to apply these “actionable bullet points” into their lives, they would be on a path towards debt freedom in 12 to 24 months. …

I recently saw an ad by Bank of America where their CEO Brian Moynihan made the following statement:

”We are focusing our resources on the number one priority — looking after people”.

This statement made me cringe and ultimately serves as the basis for this article. Here’s the punchline: Credit cards are destroying the US economy not the coronavirus.

Close your eyes and dream

Imagine if you woke up tomorrow and the following two statements represented your financial picture:

  1. You owed no one nothing. This means no credit cards, no student loans, no car loans, no car leases, no mortgage. …

Consider the following questions

  1. Does the traditional path of taking on obscene amounts of debt in the spirit of “higher education” make you angry?
  2. Ever made a financial decision which you later regretted?
  3. Do you have a point of view on wealth creation which beats to a different drum?
  4. Have you experienced an injustice in the world you want to share?

If any of these questions pique your interest, submit your app to become an Educated and Broke contributor.

Educated and broke was born in San Francisco, CA early 2018 after a series of poor financial decisions left John with over $170,000 of student debt. 2 years later, it has turned into the fastest growing personal finance publication on medium. Share your voice today.

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March 25th 2020, the United States Congress passed the “Coronavirus Aid, Relief, and Economic Security Act” or the “CARES Act”. It was a $2.2 trillion dollar tax pay funded bail out as a result of a stalled economy from shelter in place orders at the national, state and local level. Of the $2.2 trillion dollars allocated via the US Cares Act[1], $349 billion dollars were allocated to the “Paycheck Protection Program” (PPP) [2], a forgivable loan program for “small business owners” which allocates up to $10 million dollars to cover (primarily) payroll costs, mortgage interest, and other operational expenses.

The spirit of the PPP was to encourage employers to keep employees employed and not furloughed or unemployed. SBA owners are able to get up to 75% of the loan amount forgiven if it is used to cover payroll costs. Unfortunately there were many loop holes which ultimately served as a mechanism to abuse the program. Another job well done by the cesspool of mediocrity known as the US Government. The US Cares Act has carve outs for restaurants and hotels which DO NOT limit the number of employees. Originally the PPP was designed to target small business owners with < 500 employees. Due to lobbying from the “National Restaurant Association”, this regulation was removed for restaurant and hoteliers[3]. …

“The best time to start was yesterday, the next best time is now”

Repeat after me, “It is not too late to start blogging…it is not too late to start blogging”.

Ok I get it — blogging is sexy and it’s an awesome side hustle. The idea of having people read the (amazing) content you write with the hope that you’ll find a path to monetization is clutch, but blogging in 2020 isn’t the same as blogging in 2009. Fortunately, it’s a lot easier. In 2009 I launched a technology blogged which, at its peak, had around 25,000 unique visitors a month. It was a pain in the butt to maintain because, in addition to writing, there was a ton of ‘technical debt’ and administrative activities that you have to deal with as well. …

There is *so much* mis-information regarding the US Cares Act (commonly known as the “corona virus stimulus check)” that i’m beginning to think the mis-information may be just as problematic as the virus itself.

The purpose of this post is to clearly define what benefits are available to individuals with federally insured student loan debt. I am not going to reference the US Cares Act documentation and nothing else. No news, not CNN, not Fox, not MSNBC. They’re all freak shows right now. I am going to reference actual language within the bill. Let’s start.

First — the US Cares Act student loan “assistance” only applies to federal student loans

“Federal student loan debt” means that your loan server is the US Department of Education. They own your debt and you are making payments to them. For example , If you have a stafford loan it is federally if you did not refinance it.

What a wild ride it has been. July 2018 I started blogging about my $170,000 of student loan debt and plan with a plan to have it paid off by March 2020 (yikes..now!), you can see the original post here:

Fast forward past a $90,000 wedding, three personal health emergencies, two career changes, and one coronavirus scare later, here we are, the last weekend of March 2020. Did I hit my goal of paying off $170,000 in 21 months? Unfortunately not.

Over the 21 month window I paid an aggregate $112,920.49 towards the debt, an average of $5,377.17 per month. Of that aggregate amount, $100,832.42 went to principal and $12,088.07 …

Student loan debt is accelerating so fast that it has become a burden on the U.S. economy. The Federal Reserve Bank of New York said in February of 2017 that student loan debt rose for the 18th consecutive year and that borrowing for higher education has doubled in just eight years. Pathetic.

The average borrower in the college class of 2017 is expected to carry more than $38,000 in student loan debt, which may be accompanied by growing credit card debt, as well as an auto loan and maybe even a mortgage.

The reality of student loan debt

The costs for a higher education are among the fastest-rising costs in American society today. Since 1980, tuition costs at public universities has risen from $2,119 to $9,410, a jump of 344%. Private college tuition is up from $9,500 in 1980 to $32,410 in 2017, a jump of 241%. By comparison, food and electricity costs have risen about 150% and gasoline prices have risen more than 200% over the same period of time. …

“The only man who sticks closer to you in adversity than a friend is a creditor”. — Unknown

So i’m not really a fan of refinancing student loan debt, or any debt in general. I get that there’s a quantifiable reduction in interest paid over the term of the loan. I also understand that there’s a potential to reduce the minimum monthly payments. Cool. I’m not a fan of refinancing debt because it gives the illusion that the debtor (you, the broke one with no savings) is actually doing something…like you’re making progress?

You’re not making any progress. You are moving paper from one side of the room to another. You’re exchanging the billing address of the ridiculous amount of student loan debt that you took out to goto some 4 year liberal arts college where you now work in a field completely unrelated to your major. …


John Cook

Financial insanity @ Educated & Broke. Get the book now — https://amz.run/3eeD

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