| Financial Security vs. Financial Growth |
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Avino
Preferred Member
Cash: $ 24.80
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Joined: 27 Mar 2006
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| Financial Security vs. Financial Growth |
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I know there have been many posts on this age old question, do you pay down your debt or invest? And the answer is usually somewhere in between, you pay off very high interest debt and keep low interest debt so you can invest.
Even so, I find myself tempted to just pay off all my debt first and then invest. The reason for this is quite simple. If I keep some of my debt and invest, and then during the next couple of years the value of my investments go down, I still have my debt AND much less money than what i started with. However, if I pay off all my debt, and then invest, if the value of those investments go down, I wont be as troubled because I am debt free.
On the flip side if I pay off all my debt and find that I would have had much more money (which may be the case) had I invested and not paid off all my debt that will in hindsight also bug me.
So what it boils down to is Security (no debt) vs. Financial Growth. But another thing to consider is my age, I am 26, so if I pay off all my debt now, I still have plenty of time to keep investing debt free. I started my 401k when I was 18, and have rental income from one of the units in my two family home so I have already been investing, but now I have the oppertunity to become completely debt free. And that security seems to me to be worth more than any future returns in investments.
~A.
Also blogging @ avinos2cents.blogspot.com
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Fri Aug 01, 2008 9:34 pm |
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Shaun Paul
New Member
Cash: $ 0.65
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Joined: 14 Nov 2011
Location: France
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I agree with your facts. but i believe more on financial growth as compare to financial security.
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Tue Nov 15, 2011 9:47 am |
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