Posted on March 11, 2008 at 6:24 pm The Question comes to me quite often.  "Should I pay off my debt with the extra money I have or invest it?"  My response is always the same: "Isn't paying off your debt a good investment?"  I love answering questions with questions because it makes me feel really smart.Isn't it logical to think if you save yourself from paying interest on debt, in a way, you are making money?  Now of course the money you are saving from paying off debt is a future savings, therefore, an investment.A lot of people who invest money would like to see a good return over the life of an investment.  Let's say an average return on a moderate mutual fund over a 20 year span has returned 10%.  The average Credit Card interest rate is 12.99%.  Are you beginning to see where I'm going?The main difference between paying off debt and making an investment is risk.  The investment is not guaranteed to produce (Hence your risk) The debt, however, is guaranteed to keep charging interest.The problem is most people don't know anything about investing, and most people don't know how to speed up paying off their debt.  For isn't paying off a principle balance faster, much like having a stock skyrocket?Okay now we are getting somewhere.  Paying off debt quickly is much like having a investment making huge gains.  So the question is how do we as debtors pay off our debt faster than the amortization table tells us?There are only a few ways.  One is to decrease the rate of interest.  Another is to decrease the term, which will of course increase our payments, or the final way increase the payment activity and payment amounts.If you learn how to leverage your lines of credit against one another you will be on your way to paying off your debt at an accelerated rate.  We have determined this is a fantastic way for you to invest your money until you are debt free.

Posted on March 16, 2008 at 5:38 pm If you are only 15 years away from retirement, start some kind of savings program. Like you say, the medical bills aren't going away. It is more important to actually have money in the bank. Besides, your medical creditors can't automatically take any money you have in a savings program without going through the courts. I don't know your personal situation but I would bet you have money you can put into an IRA or some other forced savings account. Do it. It is far better to have a few extra dollars when you retire than not to have that money.

Posted on March 21, 2008 at 7:08 am The way I see it is that consumer debt is best only when it's paid off. Investment should form part of a wealth creation strategy that comes into play AFTER consumer debt is gone. I guess I think this way because I can't think of an investment that's going to give me a return of more than the interest being charged on something useless like a credit card or car loan? Having said that, I do completely agree with debt when it's used as leverage for an investment, like a mortgage on an investment property, or perhaps (in certain cases) a margin loan on a carefully considered share portfolio. In those instances, debt can be a great wealth creation tool. But consumer debt needs to be out of the financial picture. Just my two cents Raven

Posted on March 31, 2008 at 11:18 pm Call me old fashioned and maybe stupid but since the tax deduction for credit card interest was eliminated, I see no benefit in having the debt if you can afford to pay it off. If your investment portfolio is doing well, once your debt is paid off, take the same amount of money you budgeted monthly to pay towards your cards then apply it towards your investments.