AR, On this one, everyone disagrees with me. I don't believe in debt at all. I would pay off all my debt, even low interest student loans, before ever investing a penny in anything. Obviously, you work in declining order of interest rates. The one exception might be a mortgage, as that is more of a monthly living expense with a tax scam attached. Sort of like a really large phone bill that the govt. allows you to deduct. I would never have one of the things, but it is the only debt that might be worth holding.
The reason for this is not just an aversion to debt. It also has to do with the size and stability of your monthly savings/investment. Once the debt is gone, all of the money you were paying out can go into the asset building pile. Your ability to add to that pile every month depends a lot on absence of debt.
Yes, lots of people have done it in the short term. But I don't think most folks can beat the return on paying off debt over the long run.
BTW, I do have credit cards, in my name and others for motels with married women <G>, but I never pay interest. They are convenient and they pay me a rebate for carrying them. No, I will not get rich on the rebate, but I'd rather be paid than pay.
MB |
