When is Investing a bad Idea – Paying Debt Vs Investing


Regular readers of this blog know that I encourage readers to invest pay themselves first and invest the money. Investing has the ability to grow your wealth exponentially through the power of compounded returns. I believe that everyone should be invested a set amount monthly if they want a safe and secure future.

Having said this, there are certain people who should definitely stay away from investing. If you have Credit Card debt, investing money is possibly a bad idea.




If you are one of these people that have wracked up credit card debt, then it makes no financial sense for you to invest money. Most credit cards charge over 15% in interest annually. Not paying them off in full at the end of the month means that your friendly card company is sucking your money right out of your wallet. You don’t have to be the sharpest tool in the toolbox to realise that paying 15% interest on credit-card debt and investing money that you hope will provide returns of 10% makes as much sense as bathing fully clothed in a giant tub of Vaseline and then travelling home on the roof of a bus.

Paying off credit-card debt that’s charging interest in excess of 15% is akin to making a tax-free 15% gain on your money. And there’s no way that your investments can guarantee a gain like that after tax. If any financial adviser, advertisement, or investment group of any kind promises a return of 15% percent annually, run away as fast as you can. Nobody can guarantee those kinds of returns – except those credit card companies charging you 15%!

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