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Investing While In Debt

This article was written by in Investing. 4 comments.


An article by Dayana Yochim at The Motley Fool gives the reader license to invest in the market while in debt — as long as the debt is good debt and not bad. Even if the debt is bad debt (credit cards), she suggests investing what you can while keeping to a plan to get out of debt in six months to a year.

My thoughts on debt came mainly from my father, who was in debt most of his life despite taking in a significant amount of income. He’s completely out of debt now and is a strong advocate for staying out of debt.

Speaking of debt, an article on MSN Money features a young woman who managed to rack up $12,000 in credit card debt in four years after having none when she gradutated from college. She says:

“You have this conflict that young people face. . . . They’re supposed to have a certain material status, but there’s a huge gap between reality and pop-culture depictions of young people’s lives. They grew up thinking that a waitress and a sous chef (on the TV show ‘Friends’) could afford a huge two-bedroom in SoHo, which is ridiculous.”

It’s more difficlt when I look around and I see more and more people close to me able to afford buying condos and such. They may be getting a little help from somewhere, but once they buy their condos, they’re in a good position to let their property appreciate and they get the benefit.

Updated February 6, 2012 and originally published January 10, 2005. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 2 comments }

avatar Rob

I was reading START LATE, FINISH RICH by DAVID BACH. His advice was to pay off debt and save (not invest) at the same time so when you’re out of debt you won’t be back in debt due to a lack of savings.

I like that idea better than DAVE RAMSEY’s advice of using every last penny for the “debt snowball” and not saving.

avatar JLP

I think the first step is to build up a reserve so that you don’t have to go back to the credit cards if an emergency comes up. After a person has 3 to 6 months of income set aside in an emergency fund, then I think they should start investing.

JLP

http://AllThingsFinancial.blogspot.com

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