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‘I have around $120K worth of purchased shares’: Should I sell my company shares to pay off my $16K student loan debt at a 4% interest rate?

‘I have around 0K worth of purchased shares’: Should I sell my company shares to pay off my K student loan debt at a 4% interest rate?

Hi Money Minder,

So, I’ve got about $120K in company stock from my ESPP. On the other hand, I still have around $16K in student loans with a 4% interest rate. Is it a good idea to sell my stock to pay off my debt?

Oh yeah, I work at Intuit, just in case that changes anything.

Thanks for the help!

Response from THE MONEY MINDER:

Hello There,

Congratulations on accumulating around $120K worth of purchased shares through your ESPP at Intuit! It’s always a great achievement to build up a solid investment portfolio. Regarding your question about whether to sell and use the funds to eliminate your $16K student loan debt at a 4% interest rate, here is a practical approach to consider.

Given that the interest rate on your student loan debt is relatively low at 4%, and assuming your shares have the potential for further growth, it may be more financially beneficial to hold onto your shares and continue making scheduled payments on your student loan. By holding onto your shares, you can potentially benefit from any future appreciation in the stock price.

However, it’s essential to also consider the psychological aspect of debt repayment. If having the student loan debt hanging over your head causes stress or affects your financial peace of mind, selling some of your shares to pay off the debt can be a valid option. It could provide you with a sense of relief and allow you to focus on other financial goals.

Ultimately, the decision to sell shares to pay off debt should align with your overall financial plan, risk tolerance, and long-term financial goals. It might be wise to consult with a financial advisor who can help analyze your specific situation and provide personalized advice based on your individual circumstances.

All the best from THE MONEY MINDER.

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