When it comes to managing our personal finances, we are often faced with the dilemma of whether to invest any extra money we might have or use it to pay off debt (or at least substantially pay it down). Both options have their merits and can contribute to your long-term financial well-being. However, the decision ultimately depends on individual circumstances, risk tolerance, and financial goals.
In this article, we will explore the pros and cons of investing and paying off debt, helping you to consider what might be relevant to your particular circumstances.
Investing is the process of putting your money into various financial assets, such as shares, bonds, EFTs, or managed funds, with the goal of generating returns over time.
Paying off debt involves using your available funds to reduce or pay off outstanding debts, such as credit card balances, student loans, or mortgages.
Ultimately, the choice between investing and paying off debt depends on your unique circumstances.
Whether to invest or pay off debt is a complex decision that requires careful consideration. While investing may offer growth potential and long-term financial security, paying off debt provides immediate relief and reduces financial vulnerability. Finding the right balance is crucial, and it's wise to seek guidance from financial professionals who can provide advice based on your specific circumstances. Remember, financial decisions should align with your goals, risk tolerance, and the path to a secure financial future.
Knowing where to start with investing can be challenging. Because everyone's needs are different – there's no one size fits all. At AMP, we offer a range of investment options that may suit you. It’s a good idea to seek financial advice or other professional advice relevant to your personal financial situation. We recommend you contact your Adviser, or, if you don’t have an Adviser, contact us on 0800 267 5494.
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This article doesn't provide financial advice on your investment choices. Any information we provide is general only and current at the time. You should consider seeking advice when considering whether an investment is appropriate for your objectives, financial situation or needs.