So, in this respect, perhaps investments with high expected returns get purchased before paying off debt and vice versa. If you're expecting to make 10% and your debt is at 2%, even if it is 2% variable, it seems kind of dumb, at least from a mathematical perspective, to pay off the debt. Yes, we paid off our mortgage in less than 7 years, but we never put an extra dime toward it until we had maxed out our retirement accounts, HSAs, and as much as we wanted to give to our kids ( 529s, UTMAs) first. If we had a sweet tax deal being offered to us for investing, we usually took it instead of paying off debt. This has had a major effect on our debt vs investing choices over the years. If you aren't going to invest aggressively, then you might as well get the guaranteed return available from paying off debt. Even though the math would sometimes indicate you should carry a debt and invest, behavioral and cash-flow considerations often argue for just paying it off. There is a significant behavioral aspect to this. There are even people who think you should stay in debt your entire life. The more you dislike being in debt, the more likely you are to want to pay it off instead of invest. I dislike it enough that it was a major factor behind why I spent four years on active duty. The important decision is probably what percentage of your income is going toward building wealth rather than consumption.ħ Principles That Determine Whether You Should Pay Off Debt or Invest Trust me, in the end, this decision isn't the one that is going to determine whether you are financially successful or not. If it is really paralyzing you from doing either of them, just split the difference and put half of your extra money toward debt and half toward your investments. If you can't tell which one is better for you, it probably doesn't matter much. At its worst, one is a little more right than the other. One of them isn't wrong and the other right. In general, it also builds your net worth. Paying Off Debt and Investing Are Both Good Things Physician Wellness and Financial Literacy Conference – Park City.Continuing Financial Education – Las Vegas.Financial Wellness and Burnout Prevention for Medical Professionals.
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