You are skipping a key factor: emergency savings. No one should be investing if they don’t have at least one month of emergency savings, ideally 3 months minimum. Because of you don’t, and there IS an emergency, chances are you’re going to rack up credit card debt to cover
Consumer debt goes immediately. Very few actual net worth millionaires advise keeping consumer debt around, regardless of potential investment payouts to offset interest.
But for investing there are broker fees and taxes to pay. You won't get the market return and you should pay down debt because that is guaranteed, returns are not.
Ive got no debt. And Saving up to buy a house when the market turns. but in the meantime, how do I get started investing like how you're saying? Iv been messing around with webull but nothing big. How shold be investing.?
I have a student loan well losns since 93 and have to pay them. Well I stop paying them for financial reasons I had none. Now they're in default or worse I need advice. Help and they're high interest rates.
that 8-10% is based on the risk-free rate of return, which is super super high right now. I would say 10-12% would be a better guideline for debt vs investment with fed funds rate over 5%
There are sometimes reasons not to follow this rule – firstly, if your monthly payments are high and you could increase you cash flow by paying off a lower interest debt entirely or by substantially shortening the amount of time you still have to make payments. Sure your car loan may be at 5% but if it's eating up $500/mo and you're making $2000/mo and you get a $10000 windfall, put it toward the car. Another good reason is psychological. My student loans are all under 7%, but the amount is $57k. I was really aggressively paying the higher interest ones pre-pandemic, and when payments were paused I just kept doing that but put the money in a high yield savings account instead. Now they're about to unpause and I have the full amount saved up, so I'm going to get rid of them in one go because I can!
Again…index funds returns are an average….right now that isn't true. With interest rates this high you're better off paying down debt. Given that mortgage debt is at best 5.5% and all other debt is much higher, this is a no brainier.
The borrower is slave to the lender. Living a debt-free life is fantastic. Pay of all your debt then every penny after that can go towards investing and you won’t be working just to pay interest to someone else.
That’s numbers. There is a mindset that needs to be considered. Kill your credit card debt altogether and you will feel better than “oooh! I have a 5%, credit card debt, but I am making 6% on my investment. I am a financial savant “.
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You are skipping a key factor: emergency savings. No one should be investing if they don’t have at least one month of emergency savings, ideally 3 months minimum. Because of you don’t, and there IS an emergency, chances are you’re going to rack up credit card debt to cover
Just learned something new today. 😅
Gold advice!
Find a credit card with 7% interest
Consumer debt goes immediately. Very few actual net worth millionaires advise keeping consumer debt around, regardless of potential investment payouts to offset interest.
You also need to pay tax on stock market returns while paying down debt is tax free returns essentially.
But for investing there are broker fees and taxes to pay. You won't get the market return and you should pay down debt because that is guaranteed, returns are not.
No credit cards, EVER. Designed to keep you paying them. Cash and carry, if not, you can't afford it!
🖤🖤🖤🖤
Isn't the investment profit taxed? Shoud be less than 7% interest rate debt which is still beneficial to pay off before investing into index fund.
Ive got no debt. And Saving up to buy a house when the market turns. but in the meantime, how do I get started investing like how you're saying? Iv been messing around with webull but nothing big. How shold be investing.?
Thank you for this I really like your clips 👍
Haha there are no low interest debt if you habe credit cards
So pay off the credit card and then invest while making payments on student loans
Earlier
Typo eay
I have a student loan well losns since 93 and have to pay them. Well I stop paying them for financial reasons I had none. Now they're in default or worse I need advice. Help and they're high interest rates.
that 8-10% is based on the risk-free rate of return, which is super super high right now. I would say 10-12% would be a better guideline for debt vs investment with fed funds rate over 5%
Hmmm you are from Wall Street some of crooketess people in America how am I supposed to trust you I am not your advice sucks
I'm a millionaire, please give me advice on how to get rich.
It's a good thing the market never goes down ever, or this wouldn't work.
There are sometimes reasons not to follow this rule – firstly, if your monthly payments are high and you could increase you cash flow by paying off a lower interest debt entirely or by substantially shortening the amount of time you still have to make payments. Sure your car loan may be at 5% but if it's eating up $500/mo and you're making $2000/mo and you get a $10000 windfall, put it toward the car. Another good reason is psychological. My student loans are all under 7%, but the amount is $57k. I was really aggressively paying the higher interest ones pre-pandemic, and when payments were paused I just kept doing that but put the money in a high yield savings account instead. Now they're about to unpause and I have the full amount saved up, so I'm going to get rid of them in one go because I can!
As a millionaire, I suggest not coming into your money
Again…index funds returns are an average….right now that isn't true. With interest rates this high you're better off paying down debt. Given that mortgage debt is at best 5.5% and all other debt is much higher, this is a no brainier.
The borrower is slave to the lender. Living a debt-free life is fantastic. Pay of all your debt then every penny after that can go towards investing and you won’t be working just to pay interest to someone else.
What if they are all above 7?
Love your real straightforward advice 💚💚
Great advice! They should teach this information in high school, say the 10th grade.
Are you a millionaire or ..🤔
Trust me on this: pay off your debts FIRST then invest. Now I have more debt on top of my new debt lol
Thk u Vivian…u r so kind
GREAT advice!!
That works great. In theory, unfortunately the majority of people can't save their money. They just blow all their access money like a bunch of idiots
So when I win the lottery…..I’m gonna have you take care of it for me
Oligarchs: Cheat and change the Law so waitresses pay more % in Taxes. Oh and Most Americans CANT AFFORD TO LIVE OR INVEST
I like your channel!🎉 thank you
Wish I knew this when I came into a lot of money
how about 5% mortgage? invest or pay off mortgage first
That’s numbers. There is a mindset that needs to be considered. Kill your credit card debt altogether and you will feel better than “oooh! I have a 5%, credit card debt, but I am making 6% on my investment. I am a financial savant “.