Quote:
Originally Posted by AlpineWhite_SJ
Normally, I’d agree with this, but the amount of easy returns out there is shrinking fast. 1.5% sadly isn’t even a bad return nowadays. Depends on how you feel about risk - you could pay off that loan and be guaranteed the 1.5 vs an unknown return that could be higher or lower. I’m leaning into paying off debt with 2-4% APR because it’s not a bad return given everything going on and it lowers my monthly expenses and risk.
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Quote:
Originally Posted by qba335i
+1
I got a car loan @ 2.79%. With current volatility and low rates I will pay off the car this year. I already paid ~40% in 4 months.
2.79 after tax risk free return.
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I guess I'm in the other camp.
The last two recessions I did that.. I paid off my loans with the cash I had on hand... and missed out on buying some really good investments, whether it was property or stocks.
I agree that paying off debt makes sense... I guess if you have the disposable income to pay off the debt and still have money aside for emergencies, sure (credit cards excluded or anything with high interest).
With these low rates and uncertainties, cash is king vs paying off something that is depreciating fairly quickly and has the potential to be extremely hard to liquidate if cash injection is needed fairly quickly. Everyone has their own priorities and financial vision.