DECISION TOOL
Should I Invest or Pay Off Debt?
The honest answer depends on the math, not feelings. Paying off a 22% credit card is a guaranteed 22% return. Investing in stocks might return 7-10%. This tool runs both scenarios so you can see exactly where you end up.
Not financial advice. Returns are estimates. Actual market performance varies.
Your Debts
Investment Context
Amount above minimums you can direct each month
Net Worth Comparison
Net worth = investments − remaining debt at each horizon.
Monthly Action Plan
Add debts above to see monthly plan.
KEY INSIGHT
—
Net Worth Over 20 Years
All three strategies compared year by year.
The Rule of Thumb, and Why It's Not Enough
The standard advice: if your debt's interest rate is higher than your expected investment return, pay the debt. If lower, invest. At 22% APR on a credit card, paying it off is a guaranteed 22% return, better than anything the stock market reliably offers.
But the cutoff isn't always obvious. At 6-8% debt (like a mortgage or student loan), the math is genuinely close. Investing in a tax-advantaged account like a 401(k) with an employer match nearly always beats paying extra toward low-rate debt, since a 50% match is a 50% instant return.
The hybrid strategy usually wins emotionally even when it doesn't win mathematically: paying down debt reduces stress and builds momentum, while continued investing keeps compound growth running. For most people with mixed debt (some high, some low), hybrid is the answer.