Im currently about $5,000 in debt (will be paid off by August!), is it okay to invest right now?
2007-03-01 03:33:44 · 9 answers · asked by Cuteness 4 in Business & Finance ➔ Investing
There is no interest rate. All of my debt is over really lame stuff like rental cars, library fines, broken lease, hospital bills.....just my being a REALLY irresponsible teenager a few years ago.
2007-03-01 04:00:10 · update #1
It would be foolish for a market novice to invest available money in the stock market if you could use that money to pay off your debts.
Investing in the stock market ain't easy and involves significant risk. The obvious risk is that you could conceivably lose all of your money and still have all of your debt -- and wouldn't that really, really suck?
2007-03-01 15:22:33 · answer #1 · answered by AZ123 4 · 0⤊ 0⤋
It is hard to give you a good answer without knowing what interest rate you are paying on the debt. If you have a low rate student loan at 4%, you may want to invest rather than pay it off. High interest debt like credit cards should be payed off before investing. If you tell us what interest rate you're paying we could give better advice.
If you can invest in a 401K at work, where the company does a match, it usually best to do this and let the debt ride. The company is giving you free money.
This link will discuss this matter more:
http://www.kiplinger.com/basics/managing/cash/wp_save-debt.html
2007-03-01 03:52:09 · answer #2 · answered by Anonymous · 1⤊ 0⤋
If you have the option of participating in a 401k, 403b or other retirement savings vehicle, invest their first. You receive a tax deduction for the money you contribute to your 401k. If this is not available to you, then I'd open a Traditional IRA if you want a tax deduction and to be taxed when you withdraw your money, or a Roth IRA if you want to withdraw the money tax free.
If you just want to invest your money for personal savings, I would pay off your debt first. It may seem like a good time to get in the market now, but chances are you're paying a very high interest rate on your debt.
2007-03-01 03:38:46 · answer #3 · answered by peachygurl86 2 · 0⤊ 0⤋
You did not mention what the interest is on the debt (assuming its a credit card debt).
Either way, there is no stock that will meet or surpass the interest on the debt.
Pay the debt as soon as possible, then consider stocks.
2007-03-01 03:42:49 · answer #4 · answered by docscholl 6 · 0⤊ 0⤋
Invest
But first invest in knowledge, if you are new to the stock market.
Get some books, seminars, courses.
Do some fake trades -paper trading-, to get experience, and practice, practice, practice.
After a year of paper trades with some profits, put some real money on the line.
2007-03-01 08:11:30 · answer #5 · answered by Carlos G 3 · 0⤊ 0⤋
It depends on numerous factors, like how tight the budget is, the amount you were considering investing, knowlege of the stock market, prospects your considering, how well it's managed among other things. Some good sites to visit are tmtt.com, tradingmarkets.com, morningstar.com and http//finance.yahoo.com.
2007-03-01 03:50:27 · answer #6 · answered by sporty1997neon 2 · 0⤊ 0⤋
Pay the Debt...it opens up options
2007-03-01 04:48:12 · answer #7 · answered by bob shark 7 · 0⤊ 0⤋
Yes.
2007-03-01 06:38:22 · answer #8 · answered by Anonymous · 0⤊ 1⤋
No, numb nards!
2007-03-01 03:36:26 · answer #9 · answered by Winette 5 · 0⤊ 2⤋