Invest or pay off debt?

#1

Good evening all,

Thought this question would be worth a post.

I’ve currently got around 38k in debt… CC’s and a personal loan.

  • Personal Loan is 18k 10% APR. £350 a month payment (I know I could do with refinancing).

  • CC’s are about 9.5k each averagely but are both 0% interest.

Currently I’ve got just over 2.25k in my index portfolio and awaiting 1500 coming back from the tax office. I’m looking to start putting 250-300 a month minimum in.

I earn about £70k a year (uk) and am thinking about letting the debt do it’s thing and concentrating on investing in the index fund long term aggressively.

Doing the math on different calculators looking at paying off the debt early and compound interest calculators for the index fund I should be better off over a 10 year period with investing more, plus emotionally I feel better about having the liquidity of the index fund increasing each month.

I started about a year ago with just over £50k debt and used some savings and selling shares through work I got rid of about 15k worth which was costing me a lot each month in minimum payments.

Any thoughts and comments greatly appreciated.

Many thanks in advance,

Tom

#2

I’d absolutely pay off the debt first. Real life rarely works out like the spreadsheet says. Instead it’s about mindset, behavior, habits, etc. Go HAM on getting debt free. Then take all those debt payments and dump them into investing. Then you’re rich without the risk of our investments dropping and your debt increasing!

Here’s our generally accepted prioritization:

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