Pay Off Debt Or Not?

[gabrielnovar]

'owe the bank a little, they own you'

'owe the bank a lot......you own them'


- Alexander Hamilton

[locutus49]

This is a point I constantly make and can back it up with studies that show you are better off staying invested rather than timing the market, which most people cannot do accurately. Kudos, Doc.

Originally Posted by DocHorton

People have been saying that for years....yet here we are....

People who cashed out a couple years ago have missed out on a lot of gains.

[Laszlo]

Pay it all off and go to town!

[ArdenJaguar]

I would at least pay off the heloc and personal home mortgage. The cars will be paid off in 18 months and it sounds like you won't be running off and buying new ones right away. I do believe a recession is coming. A few years sho I did the Dave Ramsey FPU. I had over $60k in credit card debt. Now I have none. My Jag is almost paid off as end when i turn in my expensive Infiniti lease I'll be buying a Honda for cash. Then it's just student loans AZ nd z mortgage. Being debt free or near free is really liberating.

[roadie1]

We’ve been debt free for a few years now. It’s such a wonderful, freeing feeling!

[austinp]

Still mulling over which path to take. I will probably do a mix of both. Pay heloc but probably keep servicing the other debts. The account is up 3% since the original post! 7 straight weeks of gain. Quit a run for this market. Have a great weekend everybody.

Sent from my SM-G935P using Tapatalk

[BNA/LION]

Eliminate Debt. IMHO

[ejvette]

Im not a huge fan of debt but my first question is how old are you if your 50+ then dump the debt if your young then get rid of anything with a high interest rate and stay invested.

[brianrbenton]

[QUOTE=austinp;10122395]My brokerage account has grown to the point that its now slightly surpassed the amount of all of my debts. 3 mortgages, 2 car loans, and a Heloc. Would it be smart to sell the stocks and pay them off or keep paying the loans? This account is separate from my retirement accounts. Ive never minded borrowing inexpensive money but the idea of being debt free sounds pretty good as well.


It's all about the cost of the money. For example, if your mortgage has a rate of 5%, but that cash is getting you a return of 9%, you are actually losing money by paying off the debt. Conversely, if you have high interest debt, like a interest only heloc, in most cases, you would want to pay that down quickly.

The mistake people make is that they dont do anything productive with the cash. All of your money should be working for you at all times and remember to keep whatever percentage you deem necessary easily accessible.

[erhein]

Originally Posted by brianrbenton

It's all about the cost of the money. For example, if your mortgage has a rate of 5%, but that cash is getting you a return of 9%, you are actually losing money by paying off the debt. Conversely, if you have high interest debt, like a interest only heloc, in most cases, you would want to pay that down quickly.

The mistake people make is that they dont do anything productive with the cash. All of your money should be working for you at all times and remember to keep whatever percentage you deem necessary easily accessible.

After you do the above financial analysis, then you factor in the psychological value of being debt free. Using the example above, if the psychological value of being debt free is greater than the 4% delta between the 5% cost of your debt and the 9% return on your investments, pay off the debt. Only you can decide the value [I]to you[I] of being debt free, but without savings.

[replicator]

Pay some off or just put it into money market.

Never hurts to take money off the table.

[reficul_x]

I worked like a slave and pay my debts....

[PackPride]

Pay off the debt- if you don’t like your decision in 6 months, go borrow against your rental or house to invest.