Coming into large sum of money...pay off debt or invest it? - Page 2 - The Finance Forums: Financial planning, debt help, loans, mortgages, retirement and 401k, investment, and general finance discussion forums

UK-Finance · #11 (**permalink**) 02-09-2008, 09:58 PM

For now I would bank the money and wait a while. Bonds are no longer safe so what is.
Has inflation takes hold there will be opportunities for those who wait and strike at the right moment. Commodities are soon set to rise and stocks such as rapeseed used for biofuel will be worth keeping an eye on.
At this time banking your money is the only safe bet but there will soon be exciting times ahead for those who are brave enough.

Sorry I did not answer question but I do believe stock trading in commodities is going to fly.

vacationofwealth · #12 (**permalink**) 03-01-2008, 10:09 PM

It really is quite simple. What is the rate on the debt? Can you find cash flow options that have greater rates than the debt borrowed. I think you are better off investing that capital in the long run you will be better off.

realworldknowledge · #13 (**permalink**) 03-14-2008, 08:14 PM

you can find a savings account that offers over the 5% you are paying on the debt. As long as you make more than you are spending on finance charges you are good.

I agree, dont pay off that debt sitting at that low APR. You can find pleanty of investments that are pulling better returns than the finance charges.

I would put some cash in a readily available savings/mutual fund. One that makes more than the 4.xx% you are paying. Invest the rest in a stable investment and watch that money grow.

AllThingsPersonalFinance · #14 (**permalink**) 04-10-2008, 08:47 PM

Quote:

Originally Posted by jkozlow3

I recently got laid off and will be receiving over $30k in severance money from my employer. I am expecting a job offer this week (making more than with my previous employer), so it looks I won't be needing to live off the severance money.

I have roughly $30k in debt from credit cards, student loans, etc. I've played the balance transfer games long enough to where ALL of my debt is at an interest rate of 4.9% or lower for life.

So, do I pay off my debt with my severance money or invest the money in some good mutual funds and hopefully earn a lot more than the 4.9% interest I'm paying on my credit cards?

Any advice is greatly appreciated.

Thanks!

Once you get your new job and you are there for three months, take the severence money and pay off all of your debts.

I say wait three months because you or your employer may not be happy with each other. You need a safety net. There will be no severence from a job with a tenure of 8 weeks.

TonyLS · #15 (**permalink**) 04-29-2008, 06:31 PM

Which investments would you recommend that can yield > 30%

Quote:

Originally Posted by Hermes

Personally, I would invest it but definately NOT in mutual funds but that is mainly due to my definition of a good return and investment strategy and I just can't qualify 15% or 30% as a good return and anything below 15% is nothing more then a bad joke, in my opinion.

It's all about definition and if you think that a mutual fund which will get you 8% (and therefore more then the 4.9% interest you pay for you CCs) then you may want to look into that.

I would not recommend that you take that money and pay off your debt, it will be a very poor financial move. So, if mutual funds is what you favor and if they will accomplish the goals you want your investment strategy to accomplish then go for that. In the end mutual funds are better then nothing at all.