Current Events > Dude on WSB paid off his entire student loan balance off with Gamestop stock

(+) Yeah! (+)

https://finance.yahoo.com/amphtml/news/gamestop-reddit-student-loans-190949534.html

Some student loan borrowers riding the Reddit-fueled GameStop (GME) wave are betting that theyll be able to use the profits to pay off their debt.
I cannot think of anything that Ive seen that is nearly as insane as what is going on with GameStop right now, Loop Capital Markets Analyst Anthony Chukumba said on Yahoo Finance Live (video above).
The video game retailers shares soared more than 130% in recent days before falling dramatically during midday trading on Monday. The rise in shares began after short-sellers and Reddit users on r/wallstreetbets (WSB) clashed over the direction of the stock.

I love you guys , one WSB user posted, along with a screenshot of his consolidated student loan payment of $23,504.45 scheduled on Monday, Jan. 25. In the comments, the user elaborated that the payoff is the final payment on my student loans and added that they never thought I would have this paid off so soon.
The user, a 28-year-old from the American South who has a BFA in graphic design and asked not be identified for privacy reasons, told Yahoo Finance that they started paying attention to GameStop back in November and began buying weekly calls before making about $80,000 last week.

When asked why they didnt hold out for expected student debt forgiveness during the Biden administration, they responded: I dont believe the current administration is going to do anything about student debt getting rid of that debt was more important for me.
On Twitter, Dylan Steele, a student at Valdosta State University and a manager at a fitness chain in Georgia, also said he was planning to use his GME profits to pay off his student loans.
In an email to Yahoo Finance, he said he first purchased shares on Jan. 20 and sold on Jan. 25 for a profit of around $9,000.

I currently hold around $12k in student debt I plan to pay it off before August with the majority coming from this unexpected windfall, he explained, adding that he plans to attend law school after the summer.

Another user, who had not cashed out to pay their student loans yet, also expressed joy at his profits and at the fact that they could soon be debt-free thanks to the stock.

https://mobile.twitter.com/GibMitch00/status/1353747116045328389

Heck


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Another post about stocks and bitcoin

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AzurexNightmare posted...

Another post about stocks and bitcoin

Gamestonks *honk honk*

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Next year they're going to get a nice lesson about US tax law.
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Propane4Sale posted...

Gamestonks *honk honk*

What's weird is I think I blocked you because all you do is talk about stocks or bitcoin. Or both. And yet here you are.

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Good for him.

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Isnt he not supposed to sell? Arent those nerds supposed to be sticking it to short sellers? Cuz selling the stock is gonna bring the value down

I'm sure they've accounted for capital gains.

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harley2280 posted...

Next year they're going to get a nice lesson about US tax law.

CruelBuffalo posted...

Isnt he not supposed to sell? Arent those nerds supposed to be sticking it to short sellers? Cuz selling the stock is gonna bring the value down

Selling just means other people who want to buy can get more, that's all. Doesn't make the value go down.

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AzurexNightmare posted...

What's weird is I think I blocked you because all you do is talk about stocks or bitcoin. Or both. And yet here you are.

This is most definitely the weirdest episode of Mistaken Identity ever.

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harley2280 posted...

Next year they're going to get a nice lesson about US tax law.

Also, you're allowed to deduct a certain portion of your payments toward student loans from your taxes. So this guy should be good to go.

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onedarksoul posted...

harley2280 posted...

Next year they're going to get a nice lesson about US tax law.

Also, you're allowed to deduct a certain portion of your payments toward student loans from your taxes. So this guy should be good to go.

You can deduct interest paid on a student loan up to a certain amount. He won't have any interest if he's paying them all at once.

He's going to have to pay higher taxes on those stock sales since he only held them short term.
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I doubt he took the loan out yesterday, meaning chances are it has a decent amount of interest on it already.

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This unprecedented bull market is going to end in a lot more tears than in these happy little stories. Hell, gamestop alone will leave a lot of fools holding the bag.

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Should have waited for the govt to forgive $10k of it first.

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1337toothbrush posted...

This unprecedented bull market is going to end in a lot more tears than in these happy little stories

I'm not sure about that...the rise of the retail investor is upon us.

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onedarksoul posted...

I doubt he took the loan out yesterday, meaning chances are it has a decent amount of interest on it already.

You have no idea how student loans work do you?
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Considering i had them, yeah i think i do.

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onedarksoul posted...

Considering i had them, yeah i think i do.

So it's taxes you don't understand then?

You pay the interest every month on your student loans along with your payment, and currently student loans aren't accuring interest. He's not getting any taxes reduced by paying off his loans. In fact there's a solid chance his credit score is going to decrease from paying them off. On top of the extra taxes he'll pay for only holding the stocks for short term.
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oki

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GameStop isn't a profitable company and eventually it will fall, but how come the company actually capitalize the most out of this event, and somehow use it to make a profitable company from now on?
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harley2280 posted...

So it's taxes you don't understand then?

You pay the interest every month on your student loans along with your payment, and currently student loans aren't accuring interest. He's not getting any taxes reduced by paying off his loans. In fact there's a solid chance his credit score is going to decrease from paying them off. On top of the extra taxes he'll pay for only holding the stocks for short term.

The interest accrues monthly, and is added to the principal. Assuming he had the loans prior to the pause, which is a reasonable assumption, when he files he will be credited up to a certain amount on all of the interest he accrued.

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harley2280 posted...

So it's taxes you don't understand then?

You pay the interest every month on your student loans along with your payment, and currently student loans aren't accuring interest. He's not getting any taxes reduced by paying off his loans. In fact there's a solid chance his credit score is going to decrease from paying them off. On top of the extra taxes he'll pay for only holding the stocks for short term.

I imagine a lot of student loans have a large accrued interest already that doesn't get knocked out with each monthly payment. The freeze on interest actively accruing didn't eliminate already accrued interest.

_Rinku_ posted...

harley2280 posted...

So it's taxes you don't understand then?

You pay the interest every month on your student loans along with your payment, and currently student loans aren't accuring interest. He's not getting any taxes reduced by paying off his loans. In fact there's a solid chance his credit score is going to decrease from paying them off. On top of the extra taxes he'll pay for only holding the stocks for short term.

I imagine a lot of student loans have a large accrued interest already that doesn't get knocked out with each monthly payment. The freeze on interest actively accruing didn't eliminate already accrued interest.

Anybody with any financial sense would pay off their accured interest every month other wise you'll never pay off the loan.

Even if he did have interest that's going to be small compared to the taxes. My point is hopefully he put aside the money he needed to for the taxes on that or else the IRS is going to fucking ravage him next year.
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Max deduction for student loan interest on taxes is $2500.

Which translates to only $250-$500 saved.

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This is the problem with calculating people's wealth via net worth. Elon Musk is now "richer" than Bezos but Tesla is literally monopoly money.

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Wait, why is GameStop doing so well?

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harley2280 posted...

Anybody with any financial sense would pay off their accured interest every month other wise you'll never pay off the loan.

too bad our school system doesn't teach people financial sense >_>

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I was playing clubhouse games on the switch during the entire spike period. I checked when it was at 95 and the next time I looked it was at 90 and falling. RIP my gains

Now I'm wishing I had invested. I could use that kind of money as down payment on house or buy a not so nice house.

The_Creep_2020 posted...

Wait, why is GameStop doing so well?

Reddit memed it into being a high price.

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harley2280 posted...

Anybody with any financial sense would pay off their accured interest every month other wise you'll never pay off the loan.

That's not reality. At least you learned something new here.

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Good for him. Hopefully he doesn't squander the rest of it on dipshit wsb option plays

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onedarksoul posted...

harley2280 posted...

Anybody with any financial sense would pay off their accured interest every month other wise you'll never pay off the loan.

That's not reality. At least you learned something new here.

That is reality. If you're not paying off the interest you would never be able to pay your principal.
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The_Creep_2020 posted...

Wait, why is GameStop doing so well?

GameStop stock is doing so well because the Subreddit /r/wallstreetbets/ decided to buy a whole load of stock in order to raise the price of the stock. They did this mostly because Citron Research, a stock trading company, was short selling the stock. Short selling stock is when you sell the stock in such a way that you make money by the stock value going down, if GameStops value goes up, Ctiron Research loses money.

harley2280 posted...

That is reality. If you're not paying off the interest you would never be able to pay your principal.

No, the reality part is that isn't always possible. You'd know that if you ever talked with anyone who had any.

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onedarksoul posted...

harley2280 posted...

That is reality. If you're not paying off the interest you would never be able to pay your principal.

No, the reality part is that isn't always possible. You'd know that if you ever talked with anyone who had any.

I have them, my wife has them, everyone I went to college with and still talk to has them.

If you don't pay off the interest your payment will never reach the principal. That's not something that's up for debate. That's how student loans work.
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personally I think it's awesome that these low level investors are fucking with people who try to control the market.

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berlyman101 posted...

personally I think it's awesome that these low level investors are fucking with people who try to control the market.

Same. I just hope they understand the tax side of it and put the amount they'll need for taxes aside.
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harley2280 posted...

Same. I just hope they understand the tax side of it and put the amount they'll need for taxes aside.

what's the highest short term capital gains rate? 30 percent? 40?

absolute worst case for them they end up on an irs payment plan and maybe a fine.

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harley2280 posted...

I have them, my wife has them, everyone I went to college with and still talk to has them.

If you don't pay off the interest your payment will never reach the principal. That's not something that's up for debate. That's how student loans work.

So you have them yourself and didn't understand the taxes work, and now you don't understand that I'm not disputing how they work, I'm saying that people aren't always able to pay the monthly interest.

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berlyman101 posted...

harley2280 posted...

Same. I just hope they understand the tax side of it and put the amount they'll need for taxes aside.

what's the highest short term capital gains rate? 30 percent? 40?

absolute worst case for them they end up on an irs payment plan and maybe a fine.

Short term is just treated like it's part of your normal income. So whatever brackets it out you through. 37% being the most.

I'd actually say that's medium case scenario. Worst case is they don't file it correctly and the IRS catches it down the road, and then applies interest to it.

Depending on his normal income though that extra amount might catch him off guard.

Again that's just hypothetical. Chances are of he's gambling in the market like that he knows the tax considerations.
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archedsoul posted...

Max deduction for student loan interest on taxes is $2500.

Which translates to only $250-$500 saved.

I knew it was something low like that. Which for this guy should be around where he was at, depending on the interest rate on his loans and how long he held them (6-8 years at most, given he was 28 I believe).

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onedarksoul posted...

I'm sure they've accounted for capital gains.

ouch

short term capital gains at that

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onedarksoul posted...

I knew it was something low like that. Which for this guy should be around where he was at, depending on the interest rate on his loans and how long he held them (6-8 years at most, given he was 28 I believe).

Unless you were in deferment or forebearance, there will be no accruing interest to capitalize over the years.

Interest is based off your principal between payments. If you're paying on time, part of your monthly payment is to pay for that interest.

He's probably looking at $15-$20k in taxes depending on his state and job.

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Lol this is a wild ride. Saw GME up about 90% a few minutes ago and now it is up only 70%.

Anyway, the usual market manipulators are getting pissed they are lossing billions of dollars because they got outsmarted by some memers on Reddit. Would be interesting to see if they can keep this up by targeting other short sellers in the future.

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