03-10-2015, 09:31 AM
Good question. Age old question, but good nonetheless.
From a quantitative, common sense, perspective what you laid out is the correct path: pay down if debt interest rate is higher, purchase equities if debt interest rate is low.
But with all of life there's a subjective quality as well: peace of mind. Paying down debt is extremely satisfying and head-clearing. Being debt free, if ever really possible, is the holy grail to clear thinking.
I doubt if you've spent months, years or decades being true to your goals of paying down debt you would immediately go bananas with your spending once you reached the land of No Debt.
Go with what allows you to think more clearly.
From a quantitative, common sense, perspective what you laid out is the correct path: pay down if debt interest rate is higher, purchase equities if debt interest rate is low.
But with all of life there's a subjective quality as well: peace of mind. Paying down debt is extremely satisfying and head-clearing. Being debt free, if ever really possible, is the holy grail to clear thinking.
I doubt if you've spent months, years or decades being true to your goals of paying down debt you would immediately go bananas with your spending once you reached the land of No Debt.
Go with what allows you to think more clearly.