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 meant X+Y%. Missed the <shift> key there.
It would be awesome if I could take my money, make the normal payments on student loans and then invest the rest in something that will bring a return greater than the interest I would be paying on my debts. Unfortunately, we're not talking about a lot of money to invest right now and it's a lot easier to find ways to incurr a debt with a high interest rate than it is to find a way to secure an investment with an even higher interest rate...