Bank Deal: Earn 1.00% APY on an FDIC-insured savings account at Barclays Bank.
Would you ever borrow money to invest? That is, would you take out a loan such that you could put more money in the stock market or other investments? Think carefully. You might already be doing it without even realizing it.
And I’m not just talking about people who use leverage to amplify the returns from their rental properties. I’m also talking about people who have mortgages, car loans, credit card debt, etc. but are still stashing money in an investment portfolio. In effect, they’re investing with borrowed money.
To be fair, these investments are often held in tax-advantaged retirement accounts, and mortgage loans likewise offer tax advantages (not to mention historically low rates), so perhaps this makes sense.
It’s also important to keep in mind that contributions to retirement accounts are subject to annual limits, and that many employers match 401(k) contributions. Thus, there are additional factors to consider when deciding whether to invest or pay down debt.
My point? Only that you should occasionally take a step back and look at the big picture. You might find that you’ve been fooling yourself and making investment decisions that you wouldn’t otherwise make.
- How to Become a Millionaire
- How to Get Out of Debt
- The Best Dollars I've Ever Spent
- How Our Estate Plan is Structured
- How We Paid Our Mortgage In Less than 10 Years
- Money Making Ideas
- How to Manage Your Asset Allocation with Multiple Accounts
- Consumption Smoothing - Save While the Saving's Good
- How to Save on Groceries
- How Much Life Insurance Do You Need?
- Eleven Great Books About Money
- Dave Ramsey is Bad at Math (692)
- Dish Network Customer Service SUCKS (534)
- $8,000 Homebuyer Tax Credit (429)
- Pay Off Mortgage Early or Invest? (424)
- How to Claim the First-Time Homebuyer Tax Credit (352)
- Termite Control: Sentricon vs. Termidor (325)
- How Much Should You Pay a Babysitter? (284)
- Ethanol Blended Gas = Lower Mileage? (272)
- Reduced Credit Limits? Share Your Experience (256)
- $15,000 Homebuyer Tax Credit (242)
- Buying Furniture off the Back of a Truck (227)
- Will Mac OS X Lion Kill Quicken 2007? (191)