[spider]

Lots of good questions here, but really hard to give many concrete answers. In terms of saving vs paying off loans, from a strict economic perspective, it just depends on what you earn vs what you pay to borrow (and you have to compare this on an after tax basis). But that's really going to be a secondary issue compared to your risk aversion and comfort with debt. Most people don't like additional loans hanging over their heads for a small and risky profit. If you are a brilliant investor though, it can be worth it.

A couple of points that don't need to be qualified:

1) If you don't have good credit or friends/family you can borrow from, it's nice to have $5k or whatever in the bank for emergencies. In this case you probably just want to keep it in a money market or bond type of fund, don't bother with stocks.

2) If you save, do it in a Roth. That way you won't pay taxes on whatever you earn. Also, you can still withdraw your original deposit w/o any kind of penalty (i.e. you deposit $4k and it grows to $5k. You can't take out the whole $5k for an emergency, but you can take out $4k at any time for any reason).