Whether to pay off your debt before you start investing. It’s one of the most common financial questions, financial arguments really.
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Pay Off the Mortgage First or Invest?
There can never be one perfect answer to this question because it always depends so as for financial experts, they advise individuals to seek out their personal best option.
Experts advise individuals to seek out their personal best option, weighing numerous factors such as interest rates, time horizon for investment, available returns, risk tolerance, income needs in retirement, etc.
Why the Answer to Investing vs Paying Off Debt is Not a Numbers Game
You’re told to compare the interest rates on debt against investment returns and put money to the biggest numbers first.
The Numbers Behind Pay Off Mortgage or Invest
Just going off the numbers, it makes sense to pay off just about any type of debt before you start investing and it’s a wash whether you pay off the mortgage or invest.
Reasons to Invest instead of Debt Payoff
Getting started investing early, even if it’s just $50 a month while you pay off debt is going to motivate you to save.