22 Responses to “Should we invest or pay off our debt?”
Diane D on
November 26th, 2009 9:18 pm
The clear answer is to pay off your debt. You are paying a higher interest rate on your debt than you would ever get from a safe investment. Don’t blow the opportunity to pay off your debt then put the rest into a good mutual fund.
hslayer on
November 26th, 2009 11:30 pm
AT LEAST pay off the credit cards. No investment is going to pay 20-25% so your savings on credit card interest will be more than return on investment. Whether you should pay off your parents is something of a personal matter, of course, but be careful of breeding resentment if you owe them and don’t repay when you come into some money – though parents are likely to be more forgiving than most other friends or relatives. The home loan, like the credit cards, you should compare the interest on the loan to a reasonable expectation of return on investment; whichever is more is where it should go.
Joel R on
November 29th, 2009 11:44 pm
Everything that you are currently paying interest on should be payed off, or at least as much as you can. If you invested all of it the interest you would make from it would not even cover the interest from your debt. You ALWAYS want to pay off anything that you are paying interest on. If it takes all the money to do that then you should put every penny towards that. It does not seem like it would make you come out better in the end, but it will. Call a financial consultant and they will tell you this too. Even if you do want to invest some at least pay off the parents, and the credit cards, 25% is outrageous.
macki4 on
November 30th, 2009 9:33 am
i think it is smart to do it the way you have it layed out and it is that easy, tell your husband that in ten years if he is smart and he is because he has you you well have him on easy street.. good luck.
Kramer on
December 3rd, 2009 2:54 am
Pay off your debt. It’ll cost you many more thousands in the long run if you don’t.
If you instead invest, you’ll have to use what you make from your investments to pay that many thousands of dollars more that you owe on your debts.
If you pay off your debts then you’ll have money to make monthly investments in the future for your future. Even if you pay off all your debt you’ll still have some money for investing, and better credit. And a brighter future.
Warren H on
December 3rd, 2009 7:55 pm
It depends on how much interest you are paying on the debt. The more expensive the debt is, the more of a hurry you whould be in to pay it off.
You have to make enough on the investment to pay for the interest you could get rid of. Your financial advisor can help you run the numbers and help you make a good decision. If you don’t have one, get one.
What you don’t want to do is pay the debt off and then replace it with new debt over the next couple of years.
xtowgrunt on
December 5th, 2009 10:10 am
Compare interest rates. If debt interest exceeds investment interest, pay off debt. May work off better to pay off some debts and keep others. Definately need to pay off debts to parents, however.
kthor on
December 6th, 2009 8:09 pm
pay debt off…if you have left over put money into kids colleg fund
dont buy new car, no no no..
webuynsellhouses on
December 7th, 2009 5:53 pm
Absolutely PAY OFF THOSE DEBTS FIRST.
Ask your husband if he knows of any investments that can instantly yield 20-25% interest, because that is what you will be saving by paying off those debts. (a penny saved is a penny earned) Then… definitely invest it. Just do your research, some investments are much riskier than others. I’m a real estate investor, and right now I’m playing on the conservative side of a soft California market. Use caution and best wishes…
Laetishaa on
December 10th, 2009 3:43 am
Clear or lessen the credit card loan first if possible. The faster you clear, the lesser interest you’ll be charged. To lessen the load, you may consider doing a Funds/Balance Transfer Service which offers you cash to settle the loan by charging you a much lower interest.. as low as less than 5% and 8% year. Check out with the bank for such service.
Investment involves risk and with the existing loans and education planning, I personally feel that its better to invest only a conservative amount first. Investment is optional and is advised to participate only when there’s extra cash.
country girl on
December 11th, 2009 4:21 pm
Pay off credit cards first due to high interest rates, cancel them and cut them up. Save only one card for emergency and reservation purposes ONLY. Put money back for education for kids second. Try consolidating other loans with bank and make payments using some sort of collateral (home). At least then the parents would be paid off and you wouldn’t have to make two separate payments. Next, sell something, get a smaller house, a less expensive vehicle, don’t eat out so often, don’t buy the expensive name brand clothes or shoes, try living below your means or you will end up back in the same situation in just a few months. There will not always be a nice chunk of money to bail you out so easily.
smiley on
December 13th, 2009 4:45 pm
The most responsible thing to do is pay off the debt especially them credit cards. Think of all the extra money you all could have each month if all the bills was paid for already. Then invest the money that you have saved each month. Tell him to really think about it. Good Luck
denaliguide2 on
December 13th, 2009 6:30 pm
Pay off the debt. It is reverse leverage against you. Sell your second home and divide up any balance in defensive investments while you get your head together.
DO NOT INVEST/SPECULATE with the new money, until you secure your financial position.
Tell your husband, he has a smart wife. !!!
Good Luck
DG2
Nuwagaba M on
December 15th, 2009 1:22 pm
You invest you will the debt later.
Emperor Norton II on
December 18th, 2009 6:03 pm
You have not included some important information in your posting. Your age and total income would help, as well as the ages of your children, and the source of the money you are going to be getting (gift/inheritance/winnings, etc.) – just because of the possibility of taxation on the amount, which would likely change some of your plans. But with the information you gave, here is what I would do in your situation:
Wait until you actually have the money before doing anything.
Once you actually have the money in the bank, you then have the leverage to negotiate better loan terms with your creditors OR get new creditors OR pay off the loans. I would not simply pay off the entire debt, all at once, since there are some benefits to NOT doing so.
You clearly wish to reduce the amount of interest you are paying. I mean this is obvious, and doesn’t really need to be repeated. The point of interest however is that you will want the solution that provides you with the most cashflow, and the lowest interest – and you didn’t mention the rates of interest you were paying on the first or second mortgages.
With 100 thousand dollars in the bank, you could easily buy down (i.e. lower) your interest rate on a mortgage – if this would help you. So it should be a possibility.
You don’t mention insurance – not that you needed to – but that is one area that needs to be addressed. It goes a little beyond the scope of your question, but it impacts monthly cashflow, and that’s why I bring it up.
Investing some of it could be a good idea, but your husband doesn’t appear to have the required experience to be making financial decisions.
The only way you could go about investing MOST of it without paying off MOST of your debts and actually making a significant profit would be to lower the interest rates on your debts and then invest making enough in profit to pay the interest on the debts, PLUS taxes on the earnings and then re-invest the remainder. – BUT I WOULDN’T DO THAT IF I WERE YOU, Because you don’t have the safety net when it goes bad, and neither of you has the experience to justify the risk.
The best answer though, is to take this problem to a one-on-one professional. I mean, you have a situation and areas of concern that truly require more than I could type in response. It will probably take at least several hours, and cost several hundred dollars (depending on who you hire) up to a thousand, or more – but you and your family owe it to yourselves to get the best advice your money can buy.
Very likely you can find someone agreeable to both you and your husband in the local phone directory. look under “financial planners”. Some people recommend “Certified Financial Planners”, some don’t – it doesn’t really matter. Other prefer “fee-only financial planners”, once again doesn’t matter too much. Whoever you get, just make sure you get someone Your situation is worthy of a decent solution, and I see a number of potential problems that could arise – especially with your husband’s viewpoint of not paying off any of the debts.
I am always in favor of a second opinion. After you talk with the financial planner you choose, feel free to contact me and I will be happy to give you MY opinion about your financial planner’s recommendations. At best, this will prevent you from being taken advantage of by a predator. At worst, it will only confirm that you have wisely chosen a good planner that will be able to serve your family for years to come.
Good luck to you. hope this helps.
RAY on
December 22nd, 2009 2:54 am
Get out of debt then invest or at least do half and half. Why would you invest to make 3-12% interest (with higher interest being long term and higher risk of loss) and continue to pay 20-25% on existing debts??? That doesn’t make sense. Get those family members paid off first. You never know when you may need their help again.
Patrick L on
December 23rd, 2009 6:28 pm
Pay off the cards. It’ll give you peace of mind and saves you a lot on interest. Pay off a bit to your parents, at least to make them clear you’re going to pay of the rest soon enough. Than get you a good solid financial plan (go to, they do that for free), that pays you enough for your general expenses, your payments on all other debts and let you start up the funds for your kids and set something aside for yourself.
dawn18417 on
December 25th, 2009 12:19 pm
Pay the credit cards off and pay your parents off this should be good for family relations i would think, then invest the rest in a oil company stock like exxon or valero people don’t get rich earning 5 percent a year.If the stock you buy is 50 dollars a share and it goes up to 60 dollars a share in a year then you have a twenty percent gain right there.Do you think that this is possable?In fact it is very possable it happens almost every year.exxon is up about 80 percent in three years.Invest your money do not spend it on stupid stuff and you will be on your way to financial security.
comer085 on
December 28th, 2009 1:11 am
definetely pay off ur debt asap, and save as much as you can but only after the debt has been paid off
mom on
December 30th, 2009 6:36 pm
Consider the return on your investments. Is your money safe on where you are going to invest it? And another thing, will not paying your debts not ruin your reputation as not put on the risk of losing your credit line with the bank? Ask opinion of a third party.
ckm1956 on
January 1st, 2010 11:10 am
YOU are absolutely right. It makes no sense to invest money and make (if you’re lucky) 10% when you’re PAYING 20-25% in interest on the debts.
Pay off the debts, and THEN invest.
andre h on
January 2nd, 2010 1:30 am
I HAVE BEEN TRADING CURRENCY FOR A WHILE FOUND THAT IT IS WAY MORE LUCRATIVE THAN STOCKS SO IF YOU ARE INTERESTED IN CHANGING THE WAY YOU LIVE AND WANT MORE FROM LIFE,THAT NICE CAR, BIG HOUSE, THEN MAYBE YOU SHOULD INVEST IN CURRENCIES, I WILL TELL THAT I STARTED OUT WITH ABOUT 5000 INVESTED AND I MADE AN ADDITIONAL 4000 IN ABOUT 3 MONTHS.
The clear answer is to pay off your debt. You are paying a higher interest rate on your debt than you would ever get from a safe investment. Don’t blow the opportunity to pay off your debt then put the rest into a good mutual fund.
AT LEAST pay off the credit cards. No investment is going to pay 20-25% so your savings on credit card interest will be more than return on investment. Whether you should pay off your parents is something of a personal matter, of course, but be careful of breeding resentment if you owe them and don’t repay when you come into some money – though parents are likely to be more forgiving than most other friends or relatives. The home loan, like the credit cards, you should compare the interest on the loan to a reasonable expectation of return on investment; whichever is more is where it should go.
Everything that you are currently paying interest on should be payed off, or at least as much as you can. If you invested all of it the interest you would make from it would not even cover the interest from your debt. You ALWAYS want to pay off anything that you are paying interest on. If it takes all the money to do that then you should put every penny towards that. It does not seem like it would make you come out better in the end, but it will. Call a financial consultant and they will tell you this too. Even if you do want to invest some at least pay off the parents, and the credit cards, 25% is outrageous.
i think it is smart to do it the way you have it layed out and it is that easy, tell your husband that in ten years if he is smart and he is because he has you you well have him on easy street.. good luck.
Pay off your debt. It’ll cost you many more thousands in the long run if you don’t.
If you instead invest, you’ll have to use what you make from your investments to pay that many thousands of dollars more that you owe on your debts.
If you pay off your debts then you’ll have money to make monthly investments in the future for your future. Even if you pay off all your debt you’ll still have some money for investing, and better credit. And a brighter future.
It depends on how much interest you are paying on the debt. The more expensive the debt is, the more of a hurry you whould be in to pay it off.
You have to make enough on the investment to pay for the interest you could get rid of. Your financial advisor can help you run the numbers and help you make a good decision. If you don’t have one, get one.
What you don’t want to do is pay the debt off and then replace it with new debt over the next couple of years.
Compare interest rates. If debt interest exceeds investment interest, pay off debt. May work off better to pay off some debts and keep others. Definately need to pay off debts to parents, however.
pay debt off…if you have left over put money into kids colleg fund
dont buy new car, no no no..
Absolutely PAY OFF THOSE DEBTS FIRST.
Ask your husband if he knows of any investments that can instantly yield 20-25% interest, because that is what you will be saving by paying off those debts. (a penny saved is a penny earned) Then… definitely invest it. Just do your research, some investments are much riskier than others. I’m a real estate investor, and right now I’m playing on the conservative side of a soft California market. Use caution and best wishes…
Clear or lessen the credit card loan first if possible. The faster you clear, the lesser interest you’ll be charged. To lessen the load, you may consider doing a Funds/Balance Transfer Service which offers you cash to settle the loan by charging you a much lower interest.. as low as less than 5% and 8% year. Check out with the bank for such service.
Investment involves risk and with the existing loans and education planning, I personally feel that its better to invest only a conservative amount first. Investment is optional and is advised to participate only when there’s extra cash.
Pay off credit cards first due to high interest rates, cancel them and cut them up. Save only one card for emergency and reservation purposes ONLY. Put money back for education for kids second. Try consolidating other loans with bank and make payments using some sort of collateral (home). At least then the parents would be paid off and you wouldn’t have to make two separate payments. Next, sell something, get a smaller house, a less expensive vehicle, don’t eat out so often, don’t buy the expensive name brand clothes or shoes, try living below your means or you will end up back in the same situation in just a few months. There will not always be a nice chunk of money to bail you out so easily.
The most responsible thing to do is pay off the debt especially them credit cards. Think of all the extra money you all could have each month if all the bills was paid for already. Then invest the money that you have saved each month. Tell him to really think about it. Good Luck
Pay off the debt. It is reverse leverage against you. Sell your second home and divide up any balance in defensive investments while you get your head together.
DO NOT INVEST/SPECULATE with the new money, until you secure your financial position.
Tell your husband, he has a smart wife. !!!
Good Luck
DG2
You invest you will the debt later.
You have not included some important information in your posting. Your age and total income would help, as well as the ages of your children, and the source of the money you are going to be getting (gift/inheritance/winnings, etc.) – just because of the possibility of taxation on the amount, which would likely change some of your plans. But with the information you gave, here is what I would do in your situation:
Wait until you actually have the money before doing anything.
Once you actually have the money in the bank, you then have the leverage to negotiate better loan terms with your creditors OR get new creditors OR pay off the loans. I would not simply pay off the entire debt, all at once, since there are some benefits to NOT doing so.
You clearly wish to reduce the amount of interest you are paying. I mean this is obvious, and doesn’t really need to be repeated. The point of interest however is that you will want the solution that provides you with the most cashflow, and the lowest interest – and you didn’t mention the rates of interest you were paying on the first or second mortgages.
With 100 thousand dollars in the bank, you could easily buy down (i.e. lower) your interest rate on a mortgage – if this would help you. So it should be a possibility.
You don’t mention insurance – not that you needed to – but that is one area that needs to be addressed. It goes a little beyond the scope of your question, but it impacts monthly cashflow, and that’s why I bring it up.
Investing some of it could be a good idea, but your husband doesn’t appear to have the required experience to be making financial decisions.
The only way you could go about investing MOST of it without paying off MOST of your debts and actually making a significant profit would be to lower the interest rates on your debts and then invest making enough in profit to pay the interest on the debts, PLUS taxes on the earnings and then re-invest the remainder. – BUT I WOULDN’T DO THAT IF I WERE YOU, Because you don’t have the safety net when it goes bad, and neither of you has the experience to justify the risk.
The best answer though, is to take this problem to a one-on-one professional. I mean, you have a situation and areas of concern that truly require more than I could type in response. It will probably take at least several hours, and cost several hundred dollars (depending on who you hire) up to a thousand, or more – but you and your family owe it to yourselves to get the best advice your money can buy.
Very likely you can find someone agreeable to both you and your husband in the local phone directory. look under “financial planners”. Some people recommend “Certified Financial Planners”, some don’t – it doesn’t really matter. Other prefer “fee-only financial planners”, once again doesn’t matter too much. Whoever you get, just make sure you get someone Your situation is worthy of a decent solution, and I see a number of potential problems that could arise – especially with your husband’s viewpoint of not paying off any of the debts.
I am always in favor of a second opinion. After you talk with the financial planner you choose, feel free to contact me and I will be happy to give you MY opinion about your financial planner’s recommendations. At best, this will prevent you from being taken advantage of by a predator. At worst, it will only confirm that you have wisely chosen a good planner that will be able to serve your family for years to come.
Good luck to you. hope this helps.
Get out of debt then invest or at least do half and half. Why would you invest to make 3-12% interest (with higher interest being long term and higher risk of loss) and continue to pay 20-25% on existing debts??? That doesn’t make sense. Get those family members paid off first. You never know when you may need their help again.
Pay off the cards. It’ll give you peace of mind and saves you a lot on interest. Pay off a bit to your parents, at least to make them clear you’re going to pay of the rest soon enough. Than get you a good solid financial plan (go to, they do that for free), that pays you enough for your general expenses, your payments on all other debts and let you start up the funds for your kids and set something aside for yourself.
Pay the credit cards off and pay your parents off this should be good for family relations i would think, then invest the rest in a oil company stock like exxon or valero people don’t get rich earning 5 percent a year.If the stock you buy is 50 dollars a share and it goes up to 60 dollars a share in a year then you have a twenty percent gain right there.Do you think that this is possable?In fact it is very possable it happens almost every year.exxon is up about 80 percent in three years.Invest your money do not spend it on stupid stuff and you will be on your way to financial security.
definetely pay off ur debt asap, and save as much as you can but only after the debt has been paid off
Consider the return on your investments. Is your money safe on where you are going to invest it? And another thing, will not paying your debts not ruin your reputation as not put on the risk of losing your credit line with the bank? Ask opinion of a third party.
YOU are absolutely right. It makes no sense to invest money and make (if you’re lucky) 10% when you’re PAYING 20-25% in interest on the debts.
Pay off the debts, and THEN invest.
I HAVE BEEN TRADING CURRENCY FOR A WHILE FOUND THAT IT IS WAY MORE LUCRATIVE THAN STOCKS SO IF YOU ARE INTERESTED IN CHANGING THE WAY YOU LIVE AND WANT MORE FROM LIFE,THAT NICE CAR, BIG HOUSE, THEN MAYBE YOU SHOULD INVEST IN CURRENCIES, I WILL TELL THAT I STARTED OUT WITH ABOUT 5000 INVESTED AND I MADE AN ADDITIONAL 4000 IN ABOUT 3 MONTHS.