Pay Off Interest Or Invest?

A major problem people face is debt.  Most people rush to pay down their mortgage because they hate the idea of owing someone money.  What if I told you that maybe paying off debt right away isn’t your best option?  You heard me right.  It baffles me that people are not smarter on this topic.

Lets say you have a loan which gains interest at 3% each year.  An average person would get any money they had and throw it at that loan.  Now, a person who is investing in their future would not do this.  Lets say you receive 2000 dollars and you invest it.  Average return in the markets are 8%, so now you have 2160 dollars and gained 5%.  Now, if you would have payed off your debt you would have essentially “made” a 3% return, but instead you invested it and got 8%.   Hopefully you guys see my point and realize that paying off debt is not always the priority and sometimes debt is good.

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