Invest or Pay Debt?

Is it better to pay off debt, or to invest?

You may be in a situation where you have some spare cash and you’re now wondering whether you should invest this money or rather pay off some debt that you have. You are definitely not alone in wondering what is best to do, but unfortunately there is no definitive answer to this. See why I decided to pay off my home loan rather than invest. There are so many factors that come into play that the best solution is to read, read and read some more! And of course do some calculations. Learn as much as you can about this (it’s really quite simple) and then analyse your own situation and decide accordingly. You may want to consult a financial advisor, but be sure to understand the reasons they give and don’t be afraid to argue or question the motives. This is your money and your future, don’t simply pass the decision making across to some random guy.

Some of the factors to take into consideration?

  • Your age
  • Current amount of debt
  • Payment terms & interest
  • Your cashflow
  • Tax implications (can be complicated to work out)
  • What’s more important to you (being debt free or having investments)? What will make you sleep better?
  • Your gut

I’ve compiled a list of articles to get you started on learning more about this (no affiliates or hidden agendas; just articles I’d recommend)

Articles addressing the decision of paying off debt or investing

Is it better to save money or pay off debt?


As you see there is really no single answer to this as it depends on your own situation. For me I’ve decided that it is best to pay my home loan off first and currently I’m putting every spare cent I can into my bond. Something which is tricky though is when friends or family question me about my motives and then try to advice me otherwise. It’s strange how so many people have an opinion about what I should do with my own money.

My advice: Once you made your decision and set your goals; stay strong! Don’t be swayed by peoples opinions or uninformed advice. And don’t get upset… life is too short.

Do you have any great articles or resources on this? Please add to the comments below as I would love to build up a larger collection.


Please share your thoughts

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