Pay Down Debt, or Invest in the Market?

I’m often asked the question about whether extra income is better served paying off debt, or continuing to pay minimums while investing the difference. The answer depends on where you’re at in your life stage of money, but there are some no-brainer rules of thumb to follow.

 First, credit card debt and any other debt with interest rates about 8-10% should ALWAYS be priority #1, and you shouldn’t even consider investing into the stock market until these are gone.

On the other end of the spectrum, young people are almost always be best off paying the minimum monthly payment on your mortgage, especially if you have a low rate.

All other types of loans are somewhere in the middle. Student loans and car loans fall in this category. In most cases, the “textbook” answer differs from my real life answer, and will entirely depend on your tolerance for holding debt. 

Pay off Debt Faster, or Invest in the Market?

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