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templerfool: "We currently are investing our money in an index fund type account that is "like" a money market in that we can withdraw from it similarly."

It is not withdrawal features that determine whether an account is a money market account; if you have a typical index fund you are miles away from a money market account. Easy question - what is the index?

"We also have . . . Life Insurance. The Life Insurance allows us to invest over the premium of the life insurance as another investment vehicle that is TAX free when we withdraw from it (for college for our children, etc.)"

There is no insurance policy that allows you to withdraw funds in excess of premiums paid tax free. I suspect that you have been sold a variable universal life insurance policy without fully understanding what you were buying; and I further suspect that your alleged tax free withdrawal is more likely a policy loan that will require you to keep the policy in force until you die in order to stave off undesired tax consequences.

Color my cynical.

As to your primry question, people differ as to its interpretation - I bleive that most would suggest that credit card debt should be paid off, most probably would also still agree WRT car debt, student loan debt is frequently perceived differently (but much depends upon its interest rate), and most would accept mortgage debt (i.e., only a few argue strongly that a house should be paid for in cash).

Regards, JAFO

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