About this video:
Mr. V examines two paths to consider when making this decision. Should your primary concern be to repay debt or to invest any extra money that you have to work with?

It can be hard to determine which course of action will best benefit you at any point in time. If you have a sum of money, such as a tax refund, it’s best to consider the most effective way to use that money with your future in mind.

Deciding whether to pay off debt or invest is a scenario that you’re likely to face many times. The best decision for you will depend on your own unique financial situation.
Here are two paths to consider when making this decision

1. Rate Of Return
   This path involves looking solely at the numbers. What’s the most profitable use of your extra money? Since not all debt is created equally, the solution isn’t always clear. Student loans, mortgages, and similar debt may have low-interest rates and you could profit more by investing rather than seeking to pay these off early.
2. How You Feel
   You should look at more than the numbers, considering your own feelings as well. Where do you think the money would be best used? If you have a significant windfall, do you feel best investing it or using it to repay a large portion of your mortgage? The best answer for you will fall in line with your highest priority goals.