The Rule of 72

The Rule of 72 is a simple way to estimate how long a particular investment or debt will take to double given a fixed annual rate of return. Some students try to apply this rule to their student loans, but it is not applicable because direct loan interest does not compound. For example, if an

Small, Mid, and Large Cap Stocks

When you start looking towards the U.S. stock market as a potential place to invest a portion of your portfolio, you will find that a stock is classified as either a small, mid, or large cap stock based on how much the company is worth. Small cap stocks consist of companies worth 2 billion or

Amortization and Negative Amortization

Amortization of loans refers to the spreading of payments over a defined period of time often referred to as the amortization schedule. Upon graduation, dental students enter a standard repayment plan where their graduate student loans are amortized over a 10 year term. Since most graduates have no income on the day they graduate, it is

Accrue or Compound

I was interacting with a senior dental student on Facebook a few days ago and it became apparent that some students may not understand the difference between the capitalization of outstanding interest and compounding interest upon graduation. This particular student is going to graduate with approximately $400,000 in federal graduate student loans (all of which are