WEBVTT - The Best Way to Handle UK Student Debt

0:00:03.160 --> 0:00:21.000
<v Speaker 1>Bloomberg Audio Studios, Podcasts, radio news. Welcome to Meren Talks

0:00:21.079 --> 0:00:24.240
<v Speaker 1>Your Money, the personal finance edition of Meron Talks Money

0:00:24.480 --> 0:00:27.240
<v Speaker 1>and these bonus podcasts. We talk about the best strategies

0:00:27.280 --> 0:00:29.680
<v Speaker 1>for making the most of your money. Ameren Tum's that

0:00:29.760 --> 0:00:32.160
<v Speaker 1>Web and with Me Senior Avoord and Money Just sled

0:00:32.200 --> 0:00:35.680
<v Speaker 1>all for John Steffeck Hi John Hi mel Now, I

0:00:35.680 --> 0:00:38.280
<v Speaker 1>guess everyone's talking about personal finance this week. I'm a

0:00:38.280 --> 0:00:40.360
<v Speaker 1>bit nervous about the budget. You're nerves about the budget?

0:00:40.440 --> 0:00:41.960
<v Speaker 1>Or are you more nervous or more looking forward to

0:00:42.000 --> 0:00:43.600
<v Speaker 1>being entertained? Which way does it work for you?

0:00:44.600 --> 0:00:47.440
<v Speaker 2>Ah? We see this is one of those work life

0:00:47.479 --> 0:00:52.080
<v Speaker 2>balanced dichotomies. For work it's immensely entertained, and for life

0:00:52.200 --> 0:00:55.440
<v Speaker 2>is absolutely gram And the half of me's hiding behind

0:00:55.480 --> 0:00:57.800
<v Speaker 2>the sofa and the other half is like a child

0:00:57.800 --> 0:00:58.760
<v Speaker 2>before Christmas.

0:00:58.920 --> 0:01:01.040
<v Speaker 1>The other half is deaf brilly going laf a curve,

0:01:01.120 --> 0:01:02.280
<v Speaker 1>laf a curve, laver curve.

0:01:04.440 --> 0:01:05.640
<v Speaker 2>You'll haveving a laugh of cove.

0:01:06.840 --> 0:01:09.000
<v Speaker 1>They won't be having many laughs afterwards. They don't think

0:01:09.680 --> 0:01:13.480
<v Speaker 1>they come for the laughs, don't they. Right? This week

0:01:13.480 --> 0:01:16.000
<v Speaker 1>we've got a persent from someone who you know well.

0:01:16.000 --> 0:01:19.880
<v Speaker 1>I think also be watching their budget very very carefully. Hugo.

0:01:20.280 --> 0:01:23.160
<v Speaker 1>The question is from Hugo. Hugo wrote quite a brief email. Actually,

0:01:23.360 --> 0:01:26.040
<v Speaker 1>he's asking for advice for twenty somethings. You've got more

0:01:26.080 --> 0:01:29.039
<v Speaker 1>than fifty pounds in student debt. What should they be

0:01:29.160 --> 0:01:31.600
<v Speaker 1>doing with the money they're earning? Should they pay off

0:01:31.640 --> 0:01:34.480
<v Speaker 1>that loan the extent it's a real loan. Should they

0:01:34.520 --> 0:01:36.679
<v Speaker 1>get on the housing ladder? Or should they buy stocks

0:01:36.720 --> 0:01:40.800
<v Speaker 1>and shares? So lots of things to think about here.

0:01:40.920 --> 0:01:43.120
<v Speaker 1>You know, we're quite please that Hugo is earning good money.

0:01:43.160 --> 0:01:45.440
<v Speaker 1>I'm thrilled by that. But what we don't know is

0:01:45.440 --> 0:01:47.960
<v Speaker 1>what student loan plan he's on, because there are so many,

0:01:48.120 --> 0:01:51.120
<v Speaker 1>and if he's in his twenties, I think that puts

0:01:51.200 --> 0:01:53.160
<v Speaker 1>him on Did that put him on two?

0:01:53.880 --> 0:01:57.120
<v Speaker 2>Probably because that's if you start to just course between

0:01:57.200 --> 0:02:02.080
<v Speaker 2>September twenty twelve and July twenty twenty, So yeah, almost

0:02:02.440 --> 0:02:04.120
<v Speaker 2>it does. That would be what he's doing.

0:02:04.320 --> 0:02:07.000
<v Speaker 1>Well plan to But the essence of all the student

0:02:07.040 --> 0:02:10.320
<v Speaker 1>loans are roughly the same. After a certain threshold, you

0:02:10.400 --> 0:02:13.720
<v Speaker 1>pay nine percent of your income towards your loan, regardless

0:02:13.760 --> 0:02:16.680
<v Speaker 1>of how much you are earning, it remains the same,

0:02:17.120 --> 0:02:20.520
<v Speaker 1>So the essence is the same. A large percentage of

0:02:20.560 --> 0:02:24.280
<v Speaker 1>your income will go in what they call loan repayments,

0:02:24.280 --> 0:02:26.600
<v Speaker 1>but you and I really think of as a tax,

0:02:26.880 --> 0:02:29.919
<v Speaker 1>and you can make that tax go away by paying

0:02:29.960 --> 0:02:32.359
<v Speaker 1>off the loan. And the extent of whether it's worth

0:02:32.360 --> 0:02:35.839
<v Speaker 1>it or not is just about maths, isn't it. Yeah?

0:02:35.919 --> 0:02:38.480
<v Speaker 2>And the maths bet is that that makes it difficult.

0:02:39.520 --> 0:02:42.239
<v Speaker 2>I guess it's about maths, But it's also about have

0:02:42.320 --> 0:02:46.560
<v Speaker 2>any make assumptions, which is the checky bet, having.

0:02:46.360 --> 0:02:49.480
<v Speaker 1>Made assumptions about your future earnings. For example, I mean,

0:02:49.600 --> 0:02:53.639
<v Speaker 1>what if? What if? Sacred argument? Hugo, who's earning very

0:02:53.720 --> 0:02:58.040
<v Speaker 1>nicely at the moment. Let's say that Hugo meets the

0:02:58.080 --> 0:03:02.680
<v Speaker 1>lover's life, gets married, has two kids. Hugo's the one

0:03:02.680 --> 0:03:04.480
<v Speaker 1>that gives up work to look after the kids. Get

0:03:04.520 --> 0:03:07.680
<v Speaker 1>on your Hugo because his wife's a higher owner, etcetera.

0:03:07.720 --> 0:03:10.680
<v Speaker 1>Tuesdays at work, Suddenly he's earning nothing and he may

0:03:10.800 --> 0:03:13.840
<v Speaker 1>never again get above the thresholder you know, Welcome, Welcome

0:03:13.880 --> 0:03:16.000
<v Speaker 1>to the ladies world, Hugo. Sometimes you never make back

0:03:16.040 --> 0:03:18.440
<v Speaker 1>up to your old income after your maternity lives, paternity

0:03:18.480 --> 0:03:19.440
<v Speaker 1>lives in your case.

0:03:19.240 --> 0:03:21.160
<v Speaker 2>I mean, Shugo. If I was you, I would make

0:03:21.200 --> 0:03:29.480
<v Speaker 2>that your plenty. Mary Rach marry out. Yeah softly, let's

0:03:29.480 --> 0:03:30.080
<v Speaker 2>go with the pop.

0:03:31.120 --> 0:03:33.720
<v Speaker 1>If only it was so easy anyway. So that's the

0:03:33.760 --> 0:03:36.680
<v Speaker 1>point that you are making all these assumptions about your

0:03:36.680 --> 0:03:40.080
<v Speaker 1>future once you start talking about overpaying the loan or

0:03:40.080 --> 0:03:42.400
<v Speaker 1>paying back the loan, and that makes it incredibly difficult

0:03:42.400 --> 0:03:45.200
<v Speaker 1>because obviously, even predictive AI can't tell you how much

0:03:45.240 --> 0:03:47.560
<v Speaker 1>you're going to be earning in a decade or fifteen years,

0:03:47.600 --> 0:03:49.160
<v Speaker 1>can't tell you who you're going to meet, where you're

0:03:49.160 --> 0:03:51.240
<v Speaker 1>going to live, how you want to live, what kind

0:03:51.240 --> 0:03:52.840
<v Speaker 1>of house you want to live in, how many children

0:03:52.840 --> 0:03:54.720
<v Speaker 1>are going to have, etc. No one can tell you that.

0:03:54.840 --> 0:03:57.640
<v Speaker 1>So all you can do is make some rough guesses

0:03:57.960 --> 0:04:01.120
<v Speaker 1>about your earning power, and some rough guess is about

0:04:01.160 --> 0:04:04.520
<v Speaker 1>any capital you might or not received during your life. Now,

0:04:04.680 --> 0:04:10.560
<v Speaker 1>I think probably the first place to start is should

0:04:10.600 --> 0:04:14.880
<v Speaker 1>you pay off your loan rather than saving to buy

0:04:14.880 --> 0:04:17.719
<v Speaker 1>a house. And John, I think you would say, I

0:04:17.720 --> 0:04:19.360
<v Speaker 1>want to put words into your mouth there. I think

0:04:19.440 --> 0:04:21.479
<v Speaker 1>you would say saved to buy the house.

0:04:22.800 --> 0:04:27.240
<v Speaker 2>Yeah, because I think it's reasonably straightforward this question, because

0:04:27.279 --> 0:04:29.760
<v Speaker 2>if you've decided that it's time to buy a house

0:04:30.279 --> 0:04:32.479
<v Speaker 2>and like it or not, you know, and I'm not,

0:04:33.160 --> 0:04:35.839
<v Speaker 2>you know, completely a fan of this, but buying a

0:04:35.880 --> 0:04:38.680
<v Speaker 2>house is like a life stage for almost everyone in

0:04:38.720 --> 0:04:41.360
<v Speaker 2>this country, and so if that's what you need to do,

0:04:41.480 --> 0:04:43.920
<v Speaker 2>then you need to save the money towards it. The

0:04:44.520 --> 0:04:46.800
<v Speaker 2>one thing I understand about this is that the student loan,

0:04:47.040 --> 0:04:51.640
<v Speaker 2>its impact on your ability to borrow, is only and

0:04:51.720 --> 0:04:55.320
<v Speaker 2>as much as it reduces your monthly income. So the

0:04:55.360 --> 0:04:57.679
<v Speaker 2>fact that you've got fifty grand a day, it doesn't matter,

0:04:57.760 --> 0:05:01.000
<v Speaker 2>that doesn't count towards it mortgage. It's just in as

0:05:01.080 --> 0:05:04.440
<v Speaker 2>much as it takes nine percent of your monthly salary.

0:05:04.920 --> 0:05:06.440
<v Speaker 2>So from that point of view, you don't need to

0:05:06.440 --> 0:05:09.240
<v Speaker 2>worry about it in terms of getting the mortgage. So yeah,

0:05:09.400 --> 0:05:12.440
<v Speaker 2>save up for the house to posit if that's what

0:05:12.600 --> 0:05:19.479
<v Speaker 2>your goal is. I don't really see any exclusion to that.

0:05:19.760 --> 0:05:22.000
<v Speaker 1>Yeah, And I think it's also worth saying that again,

0:05:22.080 --> 0:05:24.120
<v Speaker 1>you know, the interest rates on student learns whack all

0:05:24.160 --> 0:05:27.039
<v Speaker 1>over the place, but the majority of the time it's

0:05:27.360 --> 0:05:30.560
<v Speaker 1>probably true that the interest rate on your loan, which

0:05:30.600 --> 0:05:34.159
<v Speaker 1>is not real interest of course, but the technical interest

0:05:34.240 --> 0:05:35.919
<v Speaker 1>rate on your loan is going to be lower than

0:05:35.960 --> 0:05:38.040
<v Speaker 1>the interest rate on a mortgage, right, So if you're

0:05:38.080 --> 0:05:39.960
<v Speaker 1>going to hold onto one kind of debt, it might

0:05:40.000 --> 0:05:41.400
<v Speaker 1>as well be that. Yeah.

0:05:41.480 --> 0:05:44.200
<v Speaker 2>But also if you think of it as a tax

0:05:44.320 --> 0:05:48.000
<v Speaker 2>rather than a loan, then the idea of haven't you

0:05:48.200 --> 0:05:50.479
<v Speaker 2>keep the loan at a certain level is less of

0:05:50.520 --> 0:05:53.400
<v Speaker 2>an issue because you know, I mean especially the other

0:05:53.440 --> 0:05:55.200
<v Speaker 2>thing is she goes on if you go isn't planned to,

0:05:55.279 --> 0:05:57.280
<v Speaker 2>and I guess he must be, or almost certainly must be.

0:05:57.560 --> 0:05:59.680
<v Speaker 2>That's going to get right and off thirty years after

0:05:59.720 --> 0:06:03.680
<v Speaker 2>he could situated anyway, so he will get that weight

0:06:03.800 --> 0:06:08.240
<v Speaker 2>clean before he's a patientage. So that's the other thing.

0:06:08.279 --> 0:06:10.360
<v Speaker 2>I mean, some of the later loans are going to

0:06:10.440 --> 0:06:12.560
<v Speaker 2>have less for the problems.

0:06:12.360 --> 0:06:14.960
<v Speaker 1>Horrible that the new ones are the poor people who

0:06:15.000 --> 0:06:17.360
<v Speaker 1>started in twenty twenty three. That loan sticks with them

0:06:17.400 --> 0:06:19.960
<v Speaker 1>for forty years, so that I mean that really is

0:06:20.000 --> 0:06:21.720
<v Speaker 1>a tax. You can stop all the arguments, but it

0:06:21.800 --> 0:06:23.640
<v Speaker 1>is a loan r a tax. By that that is

0:06:23.800 --> 0:06:26.840
<v Speaker 1>definitely a taxes with you for forty years, and it

0:06:26.880 --> 0:06:29.240
<v Speaker 1>takes your marginal rate of tax for high end as

0:06:29.279 --> 0:06:31.680
<v Speaker 1>well well over fifty percent of the scandal. So I

0:06:31.680 --> 0:06:33.520
<v Speaker 1>don't know why we put up with it. Young people

0:06:33.560 --> 0:06:38.640
<v Speaker 1>do something process well, protest, get on the streets, vote,

0:06:38.920 --> 0:06:41.080
<v Speaker 1>vote for someone who's going to make your tertiary education

0:06:41.200 --> 0:06:44.600
<v Speaker 1>more efficient for you financially. But come back to that

0:06:44.640 --> 0:06:49.080
<v Speaker 1>in another podcast. So most likely, although there's not financial advice,

0:06:49.120 --> 0:06:51.760
<v Speaker 1>it's just what would most likely be the better thing

0:06:51.800 --> 0:06:54.279
<v Speaker 1>to do for most people. Save up for your house

0:06:54.360 --> 0:06:57.480
<v Speaker 1>as opposed to paying off your paying off your student

0:06:57.520 --> 0:06:59.480
<v Speaker 1>loan in any kind of lump somewhat over payment. That's

0:06:59.480 --> 0:07:02.159
<v Speaker 1>an INEFFICI into use of money. But when it comes

0:07:02.200 --> 0:07:04.280
<v Speaker 1>to anything else, now I think we would both agree,

0:07:04.320 --> 0:07:06.159
<v Speaker 1>I'm not even sure we have to talk through this one.

0:07:06.320 --> 0:07:09.240
<v Speaker 1>We would both agree that you should definitely continue to

0:07:09.279 --> 0:07:11.720
<v Speaker 1>contribute to your pension through order enrollment rather than pay

0:07:11.760 --> 0:07:13.840
<v Speaker 1>off your student them. That's that's a given.

0:07:13.600 --> 0:07:17.040
<v Speaker 2>Right absolutely, And just in case you don't know, because

0:07:17.840 --> 0:07:21.160
<v Speaker 2>that is because it's part of your overall compensation, your

0:07:21.160 --> 0:07:24.160
<v Speaker 2>employer has to contribute to it. If you don't join

0:07:24.240 --> 0:07:27.920
<v Speaker 2>nod to enrollment, your sacrifice and X amount of your

0:07:27.960 --> 0:07:30.800
<v Speaker 2>salary for absolutely noughtiesn't at all.

0:07:30.960 --> 0:07:34.000
<v Speaker 1>Yeah, So don't do that. So that's clear the other bit,

0:07:34.040 --> 0:07:36.520
<v Speaker 1>Would it be a better idea to instead invest into

0:07:36.560 --> 0:07:38.080
<v Speaker 1>stocks and shares? Do you know what I'd like to

0:07:38.120 --> 0:07:41.160
<v Speaker 1>run a little campaign. Join me in this campaign. I

0:07:41.160 --> 0:07:45.640
<v Speaker 1>would like to stop saying stocks and shares. Yes, nobody

0:07:45.680 --> 0:07:47.560
<v Speaker 1>knows what that means. What does that mean? It means

0:07:47.600 --> 0:07:51.280
<v Speaker 1>shares and shares, equity, equities and equities, stocks and shares?

0:07:51.560 --> 0:07:54.240
<v Speaker 1>It is it because it brings in debt as well?

0:07:54.240 --> 0:07:57.160
<v Speaker 1>Are we talking about? What? What? I remember?

0:07:57.200 --> 0:08:00.080
<v Speaker 2>Try to look this up at one point and it

0:08:00.080 --> 0:08:02.040
<v Speaker 2>it really it's yet another one of those things like

0:08:02.080 --> 0:08:04.760
<v Speaker 2>bulls and bears that is not entirely clear at all

0:08:04.880 --> 0:08:08.920
<v Speaker 2>what the definition ever was or where it's originated. And

0:08:09.000 --> 0:08:12.600
<v Speaker 2>I totally agree. It's like stocks and shares are the

0:08:12.680 --> 0:08:16.320
<v Speaker 2>same thing now. They're both equities as far as we're concerned.

0:08:16.560 --> 0:08:19.040
<v Speaker 2>So either change it to binds and shares or just

0:08:19.160 --> 0:08:21.280
<v Speaker 2>chairs invest.

0:08:21.480 --> 0:08:23.000
<v Speaker 1>Or why didn't we just say invest it? Would it

0:08:23.080 --> 0:08:26.080
<v Speaker 1>be a better idea to instead invest? That's how it

0:08:26.120 --> 0:08:29.560
<v Speaker 1>we're changing the question removing stocks and shares? Would it

0:08:29.600 --> 0:08:32.319
<v Speaker 1>be a better idea to invest? Is it a better idea,

0:08:32.440 --> 0:08:36.520
<v Speaker 1>John to invest than to overpay on your loan?

0:08:37.080 --> 0:08:42.720
<v Speaker 2>I mean, that's a good question. And this is where

0:08:42.800 --> 0:08:49.360
<v Speaker 2>all of the assumption stuff kind of comes in because hmm, well.

0:08:49.200 --> 0:08:54.440
<v Speaker 1>Yeah, you're you're running through so many different scenarios in

0:08:54.480 --> 0:09:00.400
<v Speaker 1>your no no idea, What is happening in anyone's into it.

0:09:00.400 --> 0:09:03.440
<v Speaker 1>It's so difficult to say what the right thing to

0:09:03.520 --> 0:09:06.760
<v Speaker 1>do is. I think what I would say, but the

0:09:07.440 --> 0:09:10.120
<v Speaker 1>starting point would be, do you have savings and let's

0:09:10.160 --> 0:09:12.640
<v Speaker 1>put the saving for a house deposit to one side

0:09:12.679 --> 0:09:16.120
<v Speaker 1>for a moment. You shouldn't ever pay down any debt

0:09:16.520 --> 0:09:19.080
<v Speaker 1>until you have a certain amount of savings. It's never

0:09:19.120 --> 0:09:20.840
<v Speaker 1>a given you'll be able to get out new debt

0:09:20.880 --> 0:09:23.720
<v Speaker 1>when you need it, So, particularly if you've got cheap debt,

0:09:23.880 --> 0:09:26.000
<v Speaker 1>seems a good idea to make sure that before you

0:09:26.080 --> 0:09:29.040
<v Speaker 1>even look at that, you've got your two, three, four, five,

0:09:29.120 --> 0:09:31.560
<v Speaker 1>six months worth of savings or freedom money as we

0:09:31.679 --> 0:09:34.439
<v Speaker 1>like to call it, sitting in a bank account. Only

0:09:34.559 --> 0:09:36.520
<v Speaker 1>then can you start saying, well, hang on, now, I

0:09:36.559 --> 0:09:40.520
<v Speaker 1>want to make a choice between my student loan and investing. Now,

0:09:40.600 --> 0:09:43.440
<v Speaker 1>if you're young, and we're assuming that Hugo is in

0:09:43.440 --> 0:09:46.040
<v Speaker 1>his twenties, he's going to be investing for the long term,

0:09:46.160 --> 0:09:48.840
<v Speaker 1>or I hope Hugo will be investing for the long term,

0:09:49.120 --> 0:09:52.720
<v Speaker 1>so we should assume that he will get a better

0:09:52.840 --> 0:09:57.040
<v Speaker 1>return over forty years or thirty years of investing in

0:09:57.040 --> 0:10:00.560
<v Speaker 1>the equity market than his loan is costing him.

0:10:01.240 --> 0:10:02.320
<v Speaker 2>Yeah, that sounds fair.

0:10:03.120 --> 0:10:06.360
<v Speaker 1>Well, I guess again slightly repoinds which scheme he's on.

0:10:07.320 --> 0:10:08.800
<v Speaker 1>But if he's on this game we think he is,

0:10:09.280 --> 0:10:10.680
<v Speaker 1>then that works. Yeah.

0:10:10.720 --> 0:10:12.960
<v Speaker 2>It is one of those things where the way to

0:10:13.040 --> 0:10:15.679
<v Speaker 2>think about it is to look at how much is

0:10:15.720 --> 0:10:18.880
<v Speaker 2>the debt course in versus what is my likely return

0:10:18.960 --> 0:10:22.200
<v Speaker 2>in the stock market, And from that point of view,

0:10:22.240 --> 0:10:26.040
<v Speaker 2>as you say, then all else being equal, then it

0:10:26.040 --> 0:10:30.280
<v Speaker 2>probably does make sense to invest, especially I suppose, because again,

0:10:30.400 --> 0:10:33.040
<v Speaker 2>if he's on the thirty year one, then by the

0:10:33.040 --> 0:10:35.560
<v Speaker 2>time he's company to take his pension out, then if

0:10:35.600 --> 0:10:38.640
<v Speaker 2>there is stuff left, then it will get written off.

0:10:38.920 --> 0:10:41.480
<v Speaker 1>I think the other thing says that what might happen

0:10:41.520 --> 0:10:44.120
<v Speaker 1>to Hugo. Hugo's doing very while well done Hugo, as

0:10:44.240 --> 0:10:45.800
<v Speaker 1>we don't know how well he goes doing. I keep

0:10:45.840 --> 0:10:47.880
<v Speaker 1>looking at the fifty thousand pounds in student debt and

0:10:47.960 --> 0:10:50.439
<v Speaker 1>thinking that Hugo is making fifty thousand pounds, he might

0:10:50.480 --> 0:10:51.200
<v Speaker 1>not be well.

0:10:51.200 --> 0:10:53.720
<v Speaker 2>But if he's in his early twenties and he's making

0:10:53.840 --> 0:10:56.440
<v Speaker 2>enough to start paying off the loan. Then he's not

0:10:56.520 --> 0:10:59.360
<v Speaker 2>doing like two bads because he must be, and then

0:10:59.400 --> 0:11:00.720
<v Speaker 2>at least a high twenties.

0:11:02.080 --> 0:11:04.400
<v Speaker 1>So maybe they'll come a point when he's earning two

0:11:04.520 --> 0:11:06.760
<v Speaker 1>hundred and fifty pounds three hundred thousand pounds and this

0:11:06.760 --> 0:11:09.719
<v Speaker 1>whole problem just goes away. That's great for Hugo.

0:11:09.840 --> 0:11:11.800
<v Speaker 2>It would be that would almost be as good as

0:11:11.840 --> 0:11:13.600
<v Speaker 2>the direct partner scenario.

0:11:16.440 --> 0:11:18.440
<v Speaker 1>I wish I'd never put the thought in your head.

0:11:18.720 --> 0:11:22.280
<v Speaker 1>This is that feminist backlash we've got on the very show.

0:11:23.720 --> 0:11:25.600
<v Speaker 1>So he needs to hope, he needs to hope that

0:11:25.640 --> 0:11:29.360
<v Speaker 1>this budget really does bring growth and productivity as promised,

0:11:29.640 --> 0:11:31.960
<v Speaker 1>so that his income goes up very sharply and this

0:11:32.040 --> 0:11:36.160
<v Speaker 1>problem disappears by itself. Yeah, the other thing we should say,

0:11:36.240 --> 0:11:38.760
<v Speaker 1>there's a lot of emotion in here, isn't there? You know?

0:11:38.800 --> 0:11:40.720
<v Speaker 1>How can how do you cope with that? How do

0:11:40.760 --> 0:11:43.839
<v Speaker 1>you feel about debt? How how troublesome is it? Do

0:11:43.880 --> 0:11:45.960
<v Speaker 1>you feel this is hanging over you or do you

0:11:46.040 --> 0:11:48.040
<v Speaker 1>never think about it? How do you feel about it?

0:11:48.040 --> 0:11:49.800
<v Speaker 1>Because that matters, you know, we can we can talk

0:11:49.840 --> 0:11:51.679
<v Speaker 1>about all these numbers. I'm most people not doing very

0:11:51.679 --> 0:11:53.520
<v Speaker 1>well because we can't come up with any specific numbers

0:11:53.559 --> 0:11:57.560
<v Speaker 1>because of everyone different situations. But when you really come

0:11:57.800 --> 0:12:00.400
<v Speaker 1>down to it, it's it's about money, but it's also

0:12:00.520 --> 0:12:05.520
<v Speaker 1>about living standards, life satisfaction where you head it. If

0:12:05.520 --> 0:12:08.280
<v Speaker 1>this debt is a real problem for you emotionally, then

0:12:08.320 --> 0:12:10.320
<v Speaker 1>you might need to take a different approach. Am I

0:12:10.400 --> 0:12:12.679
<v Speaker 1>veering away from what this podcast is supposed to be about.

0:12:12.840 --> 0:12:16.720
<v Speaker 2>I mean, Haughy investment is about psychology, and although one

0:12:16.800 --> 0:12:19.560
<v Speaker 2>reason for understanding these kinds of things is so that

0:12:19.600 --> 0:12:22.320
<v Speaker 2>you can override when your brain is telling you to

0:12:22.320 --> 0:12:25.160
<v Speaker 2>do something daft, you know. So if you are in

0:12:25.200 --> 0:12:28.120
<v Speaker 2>that issue where you just can't handle the existence of

0:12:28.120 --> 0:12:33.040
<v Speaker 2>this debt, then perhaps try and offset that with putting

0:12:33.080 --> 0:12:35.080
<v Speaker 2>a little bit more to it than you need to,

0:12:35.240 --> 0:12:37.880
<v Speaker 2>but perhaps not as much as you're you're wanting to,

0:12:38.320 --> 0:12:40.280
<v Speaker 2>because in most cases it probably will be better to

0:12:40.280 --> 0:12:43.200
<v Speaker 2>put it somewhere else. And actually, the other thing is

0:12:43.720 --> 0:12:47.480
<v Speaker 2>that we hadn't mentioned, and I've just remembered it's political

0:12:47.520 --> 0:12:51.480
<v Speaker 2>as well. Right now, nobody's really talking about student loan

0:12:51.559 --> 0:12:54.680
<v Speaker 2>forgiveness in the UK. I mean, it's happening in the US.

0:12:55.520 --> 0:12:58.760
<v Speaker 2>You don't know what's going to happen over the next

0:12:59.040 --> 0:13:03.680
<v Speaker 2>thirty years, and it's possible that at some point there

0:13:03.720 --> 0:13:07.720
<v Speaker 2>would maybe be a debt jubilee where they say, actually,

0:13:07.720 --> 0:13:10.920
<v Speaker 2>we're going to scrap the student loans, or you know,

0:13:11.040 --> 0:13:13.480
<v Speaker 2>future government might decide that a whole host of people

0:13:13.520 --> 0:13:17.199
<v Speaker 2>were just absolutely missold the whole idea of university education.

0:13:18.200 --> 0:13:21.480
<v Speaker 2>That's just one small thing to factor into the mix.

0:13:22.280 --> 0:13:25.120
<v Speaker 2>Probably this step won't be canceled, but there's a chance

0:13:25.160 --> 0:13:26.920
<v Speaker 2>that it might be at some point in the future

0:13:26.960 --> 0:13:29.800
<v Speaker 2>in a way that your mortgage is never getting canceled

0:13:30.040 --> 0:13:34.280
<v Speaker 2>or you know, your your your pension isn't going to magically,

0:13:34.840 --> 0:13:36.200
<v Speaker 2>you know, appear by itself.

0:13:36.559 --> 0:13:38.880
<v Speaker 1>Yeah, yeah, it does make sense. And I think we've

0:13:38.920 --> 0:13:42.560
<v Speaker 1>pretty much ended up with a general view that once

0:13:42.600 --> 0:13:45.480
<v Speaker 1>you've got your student debt, you might as well just.

0:13:45.080 --> 0:13:46.959
<v Speaker 2>But if no one else is paying it off for you,

0:13:47.000 --> 0:13:49.520
<v Speaker 2>because you know, you're you know, if your parents aren't

0:13:50.440 --> 0:13:53.719
<v Speaker 2>don't have the money you kind of have taken it

0:13:53.760 --> 0:13:56.160
<v Speaker 2>away in the first place, then yeah, you're you're just

0:13:56.240 --> 0:13:57.679
<v Speaker 2>kind of stuck with it, and it feels like a

0:13:57.720 --> 0:14:00.320
<v Speaker 2>low priority thing rather than a high priority.

0:14:00.440 --> 0:14:02.040
<v Speaker 1>And if your parents were to give you a lump sum.

0:14:02.040 --> 0:14:03.760
<v Speaker 1>Now your grandparents were to give you a lump sum.

0:14:03.760 --> 0:14:05.120
<v Speaker 1>Now you'd be better off buying a house.

0:14:05.559 --> 0:14:08.240
<v Speaker 2>Yeah, actually, yeah you would probably. Yeah.

0:14:08.280 --> 0:14:10.320
<v Speaker 1>Okay, Well I think that's settled then, Although of course

0:14:10.320 --> 0:14:12.360
<v Speaker 1>that was not financial advice. It was simply a ramble

0:14:12.400 --> 0:14:14.720
<v Speaker 1>through the possibilities, and I hope HUGO that it was helpful.

0:14:14.760 --> 0:14:16.920
<v Speaker 1>I rather suspect it wasn't, but I really hope it was.

0:14:17.440 --> 0:14:19.000
<v Speaker 2>Thanks John, Thanks.

0:14:18.720 --> 0:14:23.840
<v Speaker 1>Bill, Thanks for listening to this week's Maren Talks Money.

0:14:23.880 --> 0:14:26.360
<v Speaker 1>If you like our show, rate review, and subscribe wherever

0:14:26.360 --> 0:14:28.480
<v Speaker 1>you listen to your podcasts. Also, have you follow me

0:14:28.520 --> 0:14:31.080
<v Speaker 1>in John on x or Twitter at marinas w and

0:14:31.160 --> 0:14:34.960
<v Speaker 1>John underscore Steppe. This episode was produced by Summersidi, Production

0:14:35.040 --> 0:14:38.040
<v Speaker 1>support and sound designed by Moses And Questions and comments

0:14:38.040 --> 0:14:40.440
<v Speaker 1>on this show and all our shows always welcome. Our

0:14:40.440 --> 0:14:43.720
<v Speaker 1>show email is Meren Money at Bloomberg dot net