Should you invest while in debt?


should you be investing while you are in
debt and there’s no black and white answer here but I want to look at four
different things you should consider if you were thinking about investing but you
actually have some debt and this actually is a question that came from a
reader the other day and he was asking this he said I just watched your recent
investment videos what are your thoughts about investing while in debt
we’ve been going crazy at paying off our debt which has been great but then I see
other things that make me wonder if I’m missing out on some investing so I think
the most important thing to think about here is what interest rate you are
paying on your debt because oftentimes for most of us that is the actual best
investment that we can make so for example if you are paying 20% on your
credit card that is a 20% return on your money if you put that money that you
have set aside directly towards that debt and additionally it is a guaranteed
risk-free 20 percent return on your money just by eliminating that debt and
when you consider investing you basically need to be sure that you are
going to beat a 20% return on your money in order to make that a better financial
move over paying off that debt and if you ever find any way to invest your
money and earn a guaranteed 20% first off its most likely a scam but if it’s
not you have to tell me about it because I want to know about it the reality is
is that most investors are tickled pink if they can just get a 10% 12% return on
their money and that’s really hard to come by and that comes with a decent
amount of a risk attached to it so that’s where paying off this debt and
that guaranteed return that you’re going to get by eliminating it is very very
enticing all right next thing to consider is how long do you want to be a
servant and Proverbs 22:7 says that the borrower is servant to the lender in
some translations say the borrower is slave to the lender and when we are
paying off our forty six thousand dollars a debt when we first got married
this was something that felt very very true to me I felt like I was in bondage
I felt like the creditors Chase and MasterCard our bank who had our car note I just felt like they were coming down on me and I felt like they controlled me
and owned me and being able to pay off that debt just felt so so liberating and
so while I have had a whole lot of fun investing and
we’ve been able to make some money investing and that’s been a fun thing to
do the relief that has come from paying off our debt like far superseded any of
those joys that have come from being and having some investments next thing to
consider is the education factor of getting started investing and this is
kind of a counterpoint to the previous two but by getting started invest in
you’re beginning your investing education and when I first started
learning about investing I created some mock portfolios and you can do some of
the stuff online where you pretend to buy certain stocks or certain
investments and you see how they do to kind of see how you would have performed
and it’s fun but the reality is is that everything I’ve really learned has been
when I had skin in the game and when I really put some money in because you
really pay attention when it’s your real money and so that’s something to
consider if you are waiting to get started investing until you pay off your
debt and especially if you know it’s gonna take a long long time for you to
pay off your debt what is the cost of delaying at education because the
lessons that you’ve learned from those investments and even the ones that you
lose money and especially the ones you lose money those are gonna be lessons
that you’re gonna have for the rest of your life and they’re ultimately going
to help you in every investment decision that you make going forward
so I don’t at all think that’s a reason you should absolutely start investing
today regardless of your debt situation but it is something to consider and
along those lines you don’t have to invest all your money to learn some of
those lessons you can get started investing really cheap we’ve created
some other videos that show you how to get started investing really cheap or
even with no money at all and so you can check those out if you want all right
and the last point to consider is are you more like The Tortoise or more like
The Hare and if you remember the old children’s story about The Tortoise and
The Hare you’ll know that The Hare was very impatient and The Tortoise was very
slow and steady and so the question I’m asking to you is which are you and so if
you’re more like The Hare where you’re very impatient you’re jumping from one
thing to the next you get distracted easily then I suggest focusing on that debt and just really buckling down giving it
everything you have to try to knock it out as soon as possible before you get
distracted by the next thing but if you’re more like The Tortoise which is a
little bit more like me where I’m a little bit more slow and steady and I
can stick with something for a while then you might be able to do both at the
same time and you might be able to get some of the benefits of learning about
investing and making some progress they while paying off your debt but again
back to the number-one point you really want to make sure that what you’re
earning or what you’re able to earn is higher and better than the interest
rates of your paying on your debt all right so let me know down in the
comments what I missed what else you would consider or think should be
considered when investing well in debt and we just revamped our free eCourse on our website and so if you haven’t gotten that yet head over to SeedTime.com I
think you’re going to like it it’s Five of the Most Valuable Lessons
that I’ve Ever Shared and I think they’re gonna be really helpful to you
and it’s completely free so just head over SeedTime.com get signed up right
on the homepage and you can get access to that immediately and again it’s
completely free alright so that’s all for today have a great rest of your day
be blessed be blessing and I will see you soon

13 Replies to “Should you invest while in debt?

  1. Killing it, man! I love the advice! I’m trying to do something similar with my own channel

    I’m off the opinion that you should see where you can get higher returns. If your debt is only 3%, but you can get 8% returns, definitely invest.

  2. You are a Godsend, Christian here, and I had recently subbed to your channel. This question was in my head all week, I'm wondering If I should take out my Roth IRA currently paying 13% to pay my credit card debt at 26%. This helped me and my wife, Thank you so much.

  3. Very important question i enjoyed hearing the answers especially because i was going to ask can i do both. But thank God for the answer. I was a hare not so long ago but now am a tortoise after lessons learnt. Thanks Bob

  4. What do you think about consolidation loans..Are they a good idea or am I potentially making matters worse? I know how to pay off debt with more than one over extended credit bill but If they were together and one payment it would be better but I don't want to make matters worse. There is one on Acorn but still just because Acorn suggested it still may be the wrong answer.

  5. I'm not in debt right now but I will be when I get out of college so do you recommend investing or saving up for when I get that debt?

  6. Duh! It's called investing in your debt. Just by doing this simple process you could free up to 37% ROI on your money!

  7. Alot of times we dont think about a 401k match. When your employer matches your contribution, that's a 100% return on your money. In my case my employer does 50% match up to $750, so that's exactly how much goes to my 401k.
    My highest interest rate is a 6% rate, but I would do this even if I had a debt with up to 25% interest rate.

  8. Great…. I really think all Christian needs to learn how to manage financial while we are in the world and teach kids… hope I can share what I learn the biblical financial POV through you… God bless

Leave a Reply

Your email address will not be published. Required fields are marked *