Debt is no fun, no one likes to owe money. However, debt is sometimes essential for us to progress and achieve our goals. The big question is should I pay- off my debt before I invest? How do I invest when I owe so much money? It feels like all my money goes to paying bills. Maybe I should pay off my debt then invest. That seems like the logical thing to do, right? Maybe not!
By delaying investing, you can miss the opportunity to make great returns, which could help you pay down and pay off your debt as well as create wealth for you. Remember investing occurs when your money works for you, earning you more money. Most of us have some form of debt, whether it is a mortgage, student loan, car loan, or credit card debt. Today I am going to teach you how to pay down debt and invest at the same time creating a ‘win-win’ for you. Yes, it is possible! Let us have a look:
- Budgeting is the first step. Set aside money to pay down debt and invest. Take from other areas of your budget if you need to. Look at the things you spend on that can be cut – such as entertainment, non-essential online shopping (we know Amazon is favorite and they always seem to show what you need, but do you really need it?), or eating out.
- Start investing with what you can afford – There is no minimum for investing. What is important is that you start. Remember the old Jamaican saying – every mickle mek a muckle. In addition, once you start you will develop the good habit of investing consistently.
- Be consistent with paying your debt – Do not ever skip a payment. Debt typically attracts high-interest rates and late payments. Therefore, we want to get rid of it as quickly as possible especially if it is not making you any money. Know and commit to a monthly payment to pay off debt and stick with it. You will be happy in the long- run, trust me on this.
Before I wrap up I want to show you an example of how investing can help you pay off your debt quicker and the missed opportunity when we wait. If you had invested in FESCO in March 2021, at 0.80 per share, you would have made almost 10X your investment. FESCO last listed price on Friday, March 4 was $7.92. $10,000 would be worth $79,200 today. These earnings could have been used to help you pay off debt and reinvest, into other viable investments that will continue to create more wealth.