investment/debt question - Page 2

BruceInCA · #1 10-28-2005, 05:31 PM

As other posters have said, if you already have 2+ months of living expenses in savings, investing isn't a bad idea financially.

However, when I paid off my school loans and my car, it was a great feeling. It was nice to be completely debt free. (Which lasted until a new car.) It's like a psychological weight lifted off your shoulders.

Marlow · #2 10-28-2005, 07:42 PM

Hi All,

Thanks for all the great relpies. I'm sorry I couldn't respond earlier, but I was working...

I agree that it seems right to invest that money and then use it to pay off the loan. But one poster hit on something that has been rolling around in my head, that I hadn't been 100% conscious of: the psychological implications of being debt-free. I have a family and a good job, but I also have an irrepressible wanderlust. Someday in the next 5 years, I'm going to want to travel for a good long while (with the fam), and it would be better if I was debt free at that time. Not sure if it's possible, but we'll see.

So I'm still not decided, but you all have given me some good stuff to think about.

Best to you all...

Marlow

HDPM · #3 10-28-2005, 10:12 PM

Good for you for thinking of it. I guess I should disclose a bias of mine and where I am coming from. I am looking at making a big decision. Part of the decision is financial. If we were overburdened with debt, the decision would be affected, and I might not have the option. We would be working for the banks, not to produce the life we want. I guess to be fair I should also say we have some money invested and more than 2 months savings. But we also had to knock out a lot of debt the past 7 years or so. School loans, credit cards, bla bla bla. All those cheap good debts that everybody said were so great that made it so it seemed like we had the same amount of money evry month. Automatic retirement investing is great. So is investing more than that (you should). But carrying the debt some investment sellers say is OK is more suspect IMO.

As I said once before, your grandparents weren't totally nuts when they lived in a smaller paid off house and didn't borrow money for cars or vacations. Maybe they should have bought some more mutual funds, the smart ones did. But they probably had a smaller paid for house and no car note to go along with them. [img]/images/graemlins/smirk.gif[/img]