Have you talked to a financial advisor about this? Interest rates are low enough now that this might be your best use of the money but there have been many periods where holding onto your student loans and investing the money you haven't paid yet is a net increase in income.
The mental shift and peace of mind GP is talking happened for me when we could pay off all of our debts with our liquid assets. We chose not to do this however because of interest rates, and because the nest egg meant we never had to pay for anything, even a broken car or arm, on credit. I believe that you will discover you feel the same way.
Don't confuse 'no debt' with 'wealthy'. Wealthy people take loans too, when it's cheaper than the alternative.
Be very careful investing with loans that aren't cleared in bankruptcy. If you misbalance a portfolio and get overexposed to a downturn you might be throwing away your entire financial future. Restarting from $0 in bankruptcy is very different than restarting in lots of debt with high interest. Even if this is sometimes +EV it seems worthwhile to pay off the student loan just like it's sometimes worthwhile to buy insurance.
That's the tricky bit with student loans, yes. Part of why I opened with 'financial advisor'. With low interest balance transfers and mortgages the math is much simpler.
I think about this a lot and weigh your line of reasoning heavily. My reasoning is that we(my family) would like my wife to be able to focus on raising children and only work if she wanted to...we could, in theory, afford to do this on my paycheck alone - but not if we also have to pay minimums on student loans. Therefor it makes more sense to us to focus on paying them off as quickly as we can so that her time becomes freed up.
I understand the financial reasoning behind not paying them off...but I think her time is worth more to us than whatever money we would save if she had to continue working.
I think the previous poster is trying to say something slightly different.
If the interest rate on your student loan is lower than the investment returns you make, then you:
(1) End up with more money if you don't pay off your student loans, and
(2) Can still pay off your student loans whenever you need to, so your wife would not have to continue working any longer than she would otherwise.
It is strictly more money, and doesn't change your wife's timeline. You basically get free money at the spread in yields between your student loan debt and your investment returns.
One way to think about it is this: If you could borrow $50k at (say) 3% interest and could invest it in a way to make (say) 8% returns, why wouldn't you? You'd make 5% on that $50k!
The fact that you already have the debt, and the cash comes from saving monthly instead of in a lump sum doesn't change that basic math, and doesn't change how long you need to keep saving for -- in fact, it would lower it!
Of course, that assumes a low student loan interest rate and a high rate of return on investments, as well as risk tolerance, etc. etc. etc.
That's part of what I was getting at. But in addition to the math you're talking about, there are some pretty big psychological factors at play here, and I think we neglect them at our own or each other's peril.
If you ever want to be comfortable (nevermind wealthy for the moment), you must overcome the urge to spend money that you have 'lying around'. The forced austerity of paying off your loans as fast as you can is a different kind of discipline that is useful, but it avoids temptation. When you pay off your loans you make that money disappear, in a much more concrete way than for instance setting up automatic transfers.
Eventually, you have to learn to resist that temptation, and I think it's healthier and more efficient to exercise those muscles long before you hit a net worth of $1. You have to get comfortable having liquid assets, and still live below your means. To spend it when it's wise to do so instead of when you want to. If you can do that your wife can quit her job, or you can take a chance on that new job that is in a new town, or might explode in a fiery cataclysm. You can remodel your kitchen to make your house worth more than you spent on the remodel.
Even simple stuff like putting aside money for a new TV or laptop and then not buying it until there's a sale can make a huge difference in your spending money. Or bigger, like a car. Don't get the one without air conditioning because it's the color you like. Just wait.
The rationale is that instead of paying extra on your student loans you invest the extra and so long as the return on your investments is higher than your student loan rate you come out ahead. When the rates flip, such as in a market downturn, liquidate the investments and apply it to the student loans.
If you feel you do not have the discipline to avoid dipping into your investments, then by all means continue as you are.
The mental shift and peace of mind GP is talking happened for me when we could pay off all of our debts with our liquid assets. We chose not to do this however because of interest rates, and because the nest egg meant we never had to pay for anything, even a broken car or arm, on credit. I believe that you will discover you feel the same way.
Don't confuse 'no debt' with 'wealthy'. Wealthy people take loans too, when it's cheaper than the alternative.