In How I Paid It Off, Bustle's asking real readers about the, uh, unconventional ways they paid off their student loans. Here, Alexis, 28, tells us about how she made $13,000 in one day by investing in GameStop.
Tell me a little about your college experience. How much debt did you take on to go?
I went to college at Augusta State University, in Augusta, GA, where I was born and raised. I got my bachelor's degree in 2015 in information systems and I now work in IT full time.
Originally, I took out $30,000. The thought of even having debt is cringey to me — I don't like the idea of owing people money. As soon as I graduated, I started making monthly payments, trying to get my balance down as quickly as possible. I consolidated my loans in late 2017, so that lowered my interest. At the start of this year, my balance was down to $13,000.
Talk to me about that last $13,000.
I got into stocks post-graduation, and started taking it seriously around two years ago. My boyfriend at the time was also very into stocks, and had an investment portfolio. He originally introduced me to the foreign exchange market but that was hard to grasp, so I started investing in the stock market. Last year, I noticed that GameStop was only about $11 a share, and thought it could go up, so I bought an options contract for 100 shares of GameStop at $16 each.
Before I knew what was happening with Wall Street, around January, I saw GameStop was going up in price. I just sold it and broke even because I didn’t want 100 shares. A week went by, and it went up to $30, then $50. The next day it was like $100. Of course, I'm like, ‘Oh my God, I had 100 shares at $16. I could have made so much money.’ At this point I started buying again, and the stock just kept going up. I remember waking up the next morning and I checked my investment account and I was up $18,000. I didn’t cash out, because I always reinvest the money I make into future investments.
Will you pay off your loans immediately, or hold onto the investment?
I haven’t paid it off yet. If I was to withdraw all of that money from my investment account, it would be taxed tremendously. So I have to hold it or roll it over to an IRA and hold it there for a year, then I can pay off my student loans with it. But it’s in there!
It feels like a weight is finally lifted off my shoulders. Even if I don't pay it off right away, just knowing that I can pay it off allows me to focus my energy on other bills and debts that need to be paid. As of now, I am continuing to make my monthly payments.
What’s the biggest money lesson you’ve learned from taking out student loans?
To be knowledgeable about loans in general. I mean, I was 18 when I took out these loans for college and I didn't know what I was doing. I'm one of the first people in my family to go to college. So no one really educated me about loans. With what I know now, I would've tried to pay it off while I was in college so that when I graduated, it wouldn't be so much of a burden.
I didn’t need a lot of the money from refund checks — extra loan money left over from a financial aid package — but I was getting them while I was in college. I got $1,000 every semester, and my 18-year-old self was like, ‘This is great’ and spent it. With more insight, I probably would have been more responsible and saved it.
Would you recommend other people invest in the stock market in order to pay off their loans?
I would recommend finding a way to multiply your money. It just made a lot of sense to me to start investing my money because my savings were just sitting there. I knew my savings would pay for things emergency-wise, but for anything else, I would be working forever — if I wanted to travel, if I want to get a nice apartment.
The quickest way to take $100 and to turn it into $500, legally, is the stock market. And you don't need a lot of money to start. Of course, there’s a risk you’ll lose that money. I suggest investing in a good training course or book that will teach you the basics of trading. I studied the stock market for an entire year before investing any money. In order to make a good investment you have to educate yourself on the bad ones.
If student debt were to get cancelled tomorrow, how would you feel?
I think that would be great. People could focus on other things they want to do with their money, like buy a house, or a car, or travel. I feel like we all have the same story: we just didn't know any better and were pushed to go to college. No one said, “Go to a community college for two years and then transfer” or try to pay your way through it. They said, “Go to college.”
This interview has been edited and condensed for clarity.