Quote:
Originally Posted by SeeGeeWhy
Well, when x = y it is a wash, but consider that you can liquify savings or lend against other investments whereas bad debts just get you more interest payments.
It is a very rare case that interest on a loan is less than or equal to what you would be able to earn by holding your money in a GIC, so it is usually best to pay off all of your loan debts first.
The other thing I don't get is why people accelerate their mortgage payments. If the debt is good and cheap (as Photon mentions above), then why do you want to get rid of it? Take more on and leverage it into greater wealth.
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I suppose I'm a simpleton because I don't understand how you can "leverage" your debt into greater wealth. Wouldn't paying off the debt completely so that you have 0 debt be the ultimate goal?
Please try and explain like you would to a student?