Paying Off Your Debts Quickly Is Like Having An Explosive Stock

Category: Finance.

From time to time I get asked: "Is it smarter to pay off my debt with the extra money I have or put it into an investment? " I usually respond with this question: "Paying off your debt is a good investment in your future isn t it? " Think about it, because it does make sense.

The money is of course a future savings, which by definition is an investment. Doesn t it make sense to you, if you keep yourself from paying the interest on a debt, you are making future money. A lot of people who invest money would like to see a good return over the life of an investment. The average Credit Card interest rate is 199% . Let s say an average return on a moderate mutual fund over a 20 year span has returned 10% . Are you beginning to see where I m going? The investment is not guaranteed to produce( Hence your risk) The debt, is guaranteed to, however keep charging interest.

The main difference between paying off debt and making an investment is risk. The problem is most people don t know anything about investing, and most people don t know how to speed up paying off their debt. The point I m making here is this. For isn t paying off a principle balance faster, much like having a stock skyrocket? Paying off your debts quickly is like having an explosive stock. There are only a few ways. The main question is how does one pay off debt quickly without spending more money?

One is to decrease the rate of interest. If you learn how to leverage your lines of credit against one another you will be on your way to paying off your debt at an accelerated rate. Another is to decrease the term, which will of course increase our payments, or the final way increase the payment activity and payment amounts. We have determined this is a fantastic way for you to invest your money until you are debt free.

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