There’s a big debate in the personal finance community over whether it’s best to pay off your debt, or keep low interest debt (like a mortgage) and invest more.
After all, with low interest rates, you can likely earn more over time investing more of your money in the stock market and keeping low interest debt around. However, while the math may support keeping debt around, it certainly doesn’t account for the behavioral economics side of things. After all, as smart and logical as we’d like to think we all are, it’s all too easy to prefer a new car or vacation over disciplined investing, especially if a partner is pushing for those things.
And what about the feeling of being debt free? Being indebted to no one? If you carry a mortgage, you have that debt burden (and responsibility) over your head. Continue reading “Pay Off Debt or Invest?”