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Author: Hyperborea Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 5084  
Subject: Re: Poll: Most important steps to FIRE Date: 2/25/2004 7:15 PM
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If you had $250 extra this month would you put it towards an existing debt (auto loan or CC) or towards an investment account?

It would depend on the rate on the debt versus my expectation of investment returns. In most cases it would make sense to pay down your CC as the rates are often high. If you've got some temporary great rate (i.e. 0%) then as long as you've got the money to pay it off when the rate expires why not invest the $250?

Also, I think a passive investment strategy works great.
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What by this? are you referring to paying off your house so you build equity?


They might have been referring to long term buy and hold of indices.

There is quite a bit of sense to this. I find it funny that some people put there money into CDs and other low interest savings vehicles at less than 5% interest when they are paying out 5% or more in interest on their house payment. Maybe I'm way off the mark.

Well, you need to think about your cost of funds - that depends on the rate that you are paying on your mortgage and whether it is tax deductible. From there you also want some liquidity beyond your emergency fund and your house doesn't give it. Besides where are you finding 5% CDs?

Hyperborea
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