So, I didn't specify it in the video, but the debts you have to pay off as soon as you can are debts like credit cards and student loans, because they usually have a higher interest rate than what you'd get from investing. In the case of a car, there are more variables to consider. Can you actually pay it off sooner than planned? There are often fees that prevent you from doing so. Secondly, is the interest rate higher or lower than what you'd get from your investments? Example: if you have a 4% interest rate on the car and your return on investment is 10% (S&P500 average), it is better to invest in the stock market. But if it is of 14% it is better to pay off the car. I hope this helps!!
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When you say if you have debt pay that off first then invest, what would you do if you owe money on a car? And you have 3yrs left to pay it off
So, I didn't specify it in the video, but the debts you have to pay off as soon as you can are debts like credit cards and student loans, because they usually have a higher interest rate than what you'd get from investing.
In the case of a car, there are more variables to consider. Can you actually pay it off sooner than planned? There are often fees that prevent you from doing so.
Secondly, is the interest rate higher or lower than what you'd get from your investments? Example: if you have a 4% interest rate on the car and your return on investment is 10% (S&P500 average), it is better to invest in the stock market. But if it is of 14% it is better to pay off the car.
I hope this helps!!