Comments on: The Priority: Paying off Credit Card Debt or Starting Investing

By: John Caven

John Caven — Tue, 03 Jun 2008 06:09:12 +0000

Take the little bit discipline,I think it need more discipline to accomplish it well. Just make it happened.

By: Steve "The Credit Card Debt Man" B

Steve "The Credit Card Debt Man" B — Fri, 24 Aug 2007 18:46:48 +0000

Both of these can be accomplished at the same time with a little bit of discipline

By: deemzzzz

deemzzzz — Thu, 16 Aug 2007 04:46:08 +0000

“I have stated many times in my previous responses my intention of the post. I am not suggesting borrowing at 18% to invest for 10% return. I won’t even use money borrowed at 0% to buy stocks, let alone 18%.”

If I borrow $600 at 18% (about 1.5% per month)

Scenario 1
I pay $509. Next month I’ll owe $101.50 I invest $100.

Scenario 2
I pay $609 but borrow $100 that same day to invest it. Next month I’ll owe $101.50

Where’s the difference? Either way you just borrowed that $100 at 18% whether its on an old loan or new loan.

All you’ve done is obfuscated it by taking the loan into the long term.

You ARE suggesting borrowing at 18% in order to invest. At the very least don’t lie or pretend that it’s any different.

Lastly -
“There could be many excuses of not to invest as early as possible and paying debt is just one of them that I could imagine.”

There are also many excuses for not getting a free $4 smoothie before the promotion runs out such as not taking a $6 cab ride.

It’s not an excuse sir – it’s a smart choice of action.

By: Sun

Sun — Thu, 16 Aug 2007 02:39:54 +0000

I have stated many times in my previous responses my intention of the post. I am not suggesting borrowing at 18% to invest for 10% return. I won’t even use money borrowed at 0% to buy stocks, let alone 18%. The
only thing I wanted to say is investing should never be delayed, even when one is in some tough situations, such as paying off debt. It will an ideal that the same $1000 used to pay debt are invested when the debt
is gone. But do you believe that will happen to every person in debt? I don’t. I could use a couple of hundreds out of that $1000 to eat out a little more often or go to movies, or do things that I wasn’t able to do when I was in debt. Can this happen? I believe so. There could be many excuses of not to invest as early as possible and paying debt is just one of them that I could imagine.

By: Phillip

Phillip — Wed, 15 Aug 2007 06:25:59 +0000

This is terrible advice – especially on a personal finance blog. Your example is flawed because the different situations put different total amounts towards (debt reduction + investing). Why would you use those situations? You CAN’T compare them and expect to make any logical conclusion.

Simply put:
Borrowing at 18% to invest at 10% is an obvious mistake.

PAY OFF YOUR CREDIT CARD DEBT – THEN INVEST

Please do everyone a favor and take this post down. I wouldn’t want anyone believing you.