Should You Invest if You Have Debt

Getting into debt is one of those things that doesn’t hurt until you realize that your carrying chains around, they start to feel heavy and before you know it, you start to feel overwhelmed.

Then while your indebt you might hear about how over people are investing, and you might also want to invest in hopes that you can use that money to pay off the debt, or just so you don’t pay all your money towards debt

So in this video I’m going to tell you what works best, is it paying of your debt first. Credit cards, Student loan, car loans and all that stuff, or is it investing.

Remember I owed 13k in credit card debt, 20k in student loan debt, then the bank also offered me 25k for a car and 10k for business credit line and I consider a 400-600k mortgage in new york. That’s how things get out of hand, today I can say that I have no credit card debt, student loan money set aside to pay in full and I didn’t fall for the car loans.

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1. First Question ( Paying of Debt or Investing )
– Student Loans or Investing
– Car payments or investing ( but I don’t want to sell my car )
– Mortgage or investing
– Credit Card Debt

The Reason you hear people tell you don’t invest, until your debt free except the mortgage is because of this:
– Credit card interest 18-35%
– Car payments: 8-20%
– Student loan: 4.5% – 7.2%
– Mortgage: 2-4% ( but its obviously a big debt )

Think about it like this:
– If you make 8% on your investments but pay double interest your just wasting money
– It only makes sense to pay debt and invest ( when it comes to the mortgage because it’ll take an average of 10-20 years to pay off )

Tip: Obviously my advice would be Pause all investingment while your paying debt ( excluding the mortgage )

2. What you Need to Make this Happen

First: Rock Solid Budget ( with the bare necessities and that’s it )
– Shelter
– Utilities
– Groceries
– Transportation
– Remember: this is not forever it just for a little while.

Second:
– A little emergency account with atleast $1000 incase something happens
– A lot of people don’t think its enough
– So If you end up having to use, pause debt payments and then rebuild it up ( or if you know your car has problem, set aside $500 extra for it )

Third: Extra Income ( this is where the real hard work come into play )
– 168 hours in one week
– 70 goes towards maintenance -168( Eat, Sleep, shave and pop)
– 98 hours left ( 40 hours a full time and 40 hours a side hustle )
– And still 18 hours to watch a game of thrones

Fourth Pay the Debt: Avalanche Method or Snowball Method
– For People that are finance nerds like me ( and what maximize saving they can use the avalanche method )
– For people that are new and want to get started you can use the avalanche method to build momentum

3. Extra stuff
Quick Wins:
– Balance transfer for Credit Card debt
– Mint Mobile, airvoice wireless, ting can lower your phone bill
– Vision board example showring them mine

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

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