should you invest when in debt?

To help you decide you should compare your expected investing return vs. how much interest you are paying.

If you have high-interest-rate credit card debt of 16% or higher, mathematically speaking it is best to focus on paying it off first.

Historically, the average rate of return for stock market investments is around 10% before inflation, while on average the APR on credit cards is 16% or higher.

At this rate, your investment rate of return would not outweigh your interest rate.

The money you're earning through investments would not keep up with the level of your debt and the speed at which it would grow.

Once you’ve paid off your credit card debt, you would have saved hundreds or even thousands in interest to now invest.

❔Should You Pay Off Your House or Invest?

If you wait until the mortgage has been paid off before you start investing, you‘ll be limiting your time in the market.

One of the benefits of investing is putting compound interest to work for you by giving your money time to grow.

❔Should you pay off your debt before investing for retirement?

If you have the opportunity to participate in a retirement plan at work, and your employer makes matching contributions it would be advantageous to invest while paying off debt and benefit from the tax free addition.

This can be a debatable subject, as some people feel at ease and secured knowing they have no debt, whilst others would prefer to look into the numbers to decide which makes more sense mathematically speaking.