
What I didn’t understand was how much it would cost to live - viburnum
https://luke.substack.com/p/what-i-didnt-understand-was-how-much
======
PragmaticPulp
The math in the viral Tik Tok doesn't add up at all.

She claims to have paid $120,000 on an $80,000 loan with 7% interest over 10
years, with a remaining balance of $76,000.

Worst case: If she had missed every single payment for 10 straight years with
7% compound interest and then paid that $120K lump sum, her loan balance would
be $37K.

If she spread those $120K payments out over 10 years, she would have paid the
loan off already.

There is no scenario in which she pays $120K and still has a balance of $76K,
unless her interest rate was much, much higher than quoted. Any student loan
with a rate of 7% or higher should be refinanced to a lower rate anyway.

It boggles the mind that people are writing so much about this without
bothering to fact check it with basic math.

~~~
pwg
I think this quote from her sums up the problem:

    
    
         "I had no concept of money."
    

Followed by this exchange:

    
    
        "So how much do you pay a month all together for loans?"
    
        "Just under $1,000"
    

Which is probably where the 120k number came from. Ten years times 1k per
month. But that is for plural loans, and we are never told the total balance
of the plural loans, which is why the numbers do not add up.

~~~
PragmaticPulp
She said her starting balance was $80K.

Paying $1000 per month would have paid off the entire balance before the
claimed ten year period. The numbers don’t work at all.

I think it’s more likely that she’s exaggerating for effect in order to go
viral. She’s attempting to raise $30K to publish a zine, according to the
interview.

The author of the linked article is also trying to profit from the story by
selling a subscription sub stack with these stories.

These misinformation campaigns feel like a new version of Fox News or scary
e-mail forwards from grandma, except these are targeted at younger
generations.

The worst part is that exaggeration isn’t even necessary. They could simply
highlight the rising costs of education using normal, honest examples without
burning their credibility in attempts to go viral.

~~~
simonblack
_The numbers don’t work at all._

She wouldn't have stopped spending, negating much (most?) of her payments.
There is very likely _a lot_ of missing information in the article. The
figures aren't important _per se_ , they're likely just for illustration
purposes.

She doesn't have to prove her point, she's just giving us her insights into
the unexpectedly high costs of living.

We've all been there, done that. As in "Right! Who's going to win this month's
lottery to get my outstanding debts paid?"

