Now...here's an example of how you can make much more money investing now than paying off all your debt first: You can buy smaller homes for about $40k, that are in rentable condition. The payment on that loan would be roughly $250/month. You may say, "But if I put that $250 towards my bills and pay them off earlier...." Here's the key...you BORROW the huge majority of the money so YOUR money still is paying off your debt. You rent the house at $700, and profit $450 a month. Lets say your downpayment and "upfront" costs were $5000. It takes you about one year to get ALL that money back. That's a 100% return on investment!! From that point, you have an EXTRA $450 a month to pay on your bills. You also are gaining (avg) 4% on the property value and have NOTHING invested in it anymore. So after the first year, you are making what ROI? Well, with nothing invested in it anymore, how do you want to calculate it. On the other hand, if you took that $5000 and paid it on a bill...lets say that bill was at 20% interest. You would save $1000 in interest in that first year, less in the second, and so on. Compare that to getting all your $500 investment back in the first year and making $5400 a year the second, plus increases in property value. How much faster could you pay off your house if you had an additional $5400 every year to pay on it? Myself, I choose not to because the money I don't pay to the bank on a low interest loan, I can invest somewhere that I make a higher return on investment.
