My brother has significant debt. A house with a $96,000 mortgage plus credit card debt of about $58,000. He just inherited $75,000 from his wifes parents. Would it be wiser to use that $75,000 and at least pay off the credit card debt, OR should he invest the $75,000 and continue paying down the credit card debt like the rest of us? Problem is that with consumable debt THAT freakin high, it will probably take him close to 35 years to pay off his credit cards. Which is the wiser move, and what would you personally do?
2006-11-30 09:34:27 · 12 answers · asked by Anonymous in Business & Finance ➔ Other - Business & Finance
Pay off the debt first, but keep $5,000. Then take the $5,000 and put it in a high interest bearing account or term deposit account and don't touch that $5,000 for 10/15 years. By that time he would have gone a little further in paying off his debt with his own money and the $5,000 in the high interest bearing account or the term deposit account would have ballooned to a tidy little sum which he can then further apply to his debt or have on hand for emergencies.
2006-11-30 23:38:22 · answer #1 · answered by Sarah B 2 · 1⤊ 0⤋
Take the inheritance and pay off the credit card debt. Then invest what is left over and monthly the money he was using to pay the credit card companies.
2006-11-30 17:39:24 · answer #2 · answered by Steve H 5 · 0⤊ 0⤋
Always pay off the debt.
The rates of interest that you will be charged for debt will always be much higher than any return on investment that you make. Especially credit card debt - that's gonna be like 18% APR - where are you going to get a 18% return investing it?
2006-11-30 17:38:01 · answer #3 · answered by rchlbsxy2 5 · 0⤊ 0⤋
Probably pay off the credit cards. Depends on what rates he's paying on everything, and what return he could expect on investments. I just bought some 5.25% CD's , and I just took out a 5% truck loan, which is deductable. So , it wasn't worth paying cash for the truck. Generally though, it's better to pay off debt anytime you can.
2006-11-30 18:26:40 · answer #4 · answered by Papa John 6 · 0⤊ 0⤋
the best thing do is to invest at least half of the money for that would bring more money in. then pay a considerable amount on the current debt and that would lower the payment, interest rate and the length of time it would take to pay the debt off...
and of course if someone inherited money like that they would not want to pay it all in bills..
2006-11-30 17:45:23 · answer #5 · answered by sexy black 1 · 1⤊ 0⤋
Pay off the credit cards first. You want to keep the mortgage so they have a write off on their tax return.
The interest on the credit cards is higher then the return they would get on investing it.
Hope that helps.
2006-11-30 17:36:33 · answer #6 · answered by Jen 5 · 0⤊ 0⤋
Pay off the credit card, then chop it into a million pieces.
Invest the rest in a mutual fund.
2006-11-30 17:37:42 · answer #7 · answered by Chula 4 · 0⤊ 0⤋
go to a debt consolidaterand get the cards reduced, then pay them off and put the rest of the money into reducing the mortage
2006-11-30 17:39:26 · answer #8 · answered by bayareart1 6 · 0⤊ 0⤋
I'm not a financial advisor by any means, but if it were me, I'd get rid of that credit card debt in a hurry.
2006-11-30 17:37:52 · answer #9 · answered by Mrs. Bass 7 · 0⤊ 0⤋
Pay off the credit cards first and then you can use the remainder of that money and downsize that mortgage.
2006-11-30 18:12:02 · answer #10 · answered by Anonymous · 0⤊ 0⤋