Comments on: Priority: Paying off Debt or Investing

By: Golbguru

Golbguru — Fri, 02 Feb 2007 07:10:23 +0000

Sun, while I do borrow from 0% offers and invest them else where..there is a school of thought which says that less debt means less stress.
There is some kind of a psychological barrier that keeps some people stressed out about being in debt…even thought it charges low interest rates. With this thought, the relief that $50 reduction brings to some people might be much more valuable than the value of $50 20 years later.
Just to be clear, I don’t belong to this category of people, but in the last Festival of Under 30 finances, I heard this sentiment a lot.

By: The Sun

The Sun — Fri, 02 Feb 2007 03:03:07 +0000

While I agree with you that one should concentrate on the 10+% debts first, investing $50 a month won’t change the debt elimination plan a lot. However, $50 today will make a big difference 20 years later. My argument is more like making investing a habit instead of an impulse.

By: moneymonk

moneymonk — Thu, 01 Feb 2007 22:32:48 +0000

The less debt you have , the more you can save! It’s always best to get rid of the high rate debt to free up money for saving and investing.

401k and IRA both also can give tax breaks. So it’s good to start with these investments

By: The Sun

The Sun — Thu, 01 Feb 2007 22:25:49 +0000

Well, I will borrow as much as I can as well for anything at “1% interest for the next 30 years” if that kind of loan is available ). What I meant was borrowing short-term money to invest (like 0% balance transfer for 1 year) isn’t a good idea.

By: Lazy Man and Money

Lazy Man and Money — Thu, 01 Feb 2007 21:12:20 +0000

“However, it’s never a good idea to borrow money in order to invest.” If you want to lend me some significant amount of money at 1% interest for the next 30 years, I’ll be happy to borrow and invest it . My point is that if you can acquire more of that good debt you talk about to either invest (or pay off the bad debt) you should.