How Would it Feel to be Debt Free?

Continuing on the topic of sizusfinlit.blogspot.com, how would it feel to be debt free? How would it feel to no longer have the stress associated with creditors? How would it feel to stop working for the credit card, loan and mortgage companies?

Which of the following would you choose?

• Pay off debt
• Keep debt and invest

Some people think that since interest rates are low, you should keep the debt and invest. It is true that investing in the economy can generate higher payoffs. However, I lean towards becoming debt free. A few years ago, I used 0% interest rate credit cards to accumulate savings in a CD paying 5%. This is such a dangerous game because you might have a late payment or make a mistake. Although I didn't ever make a mistake doing this, I would not advocate this process.

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Likewise, I suggest getting out of debt as soon as possible. If you spend years investing and take a loss, you will end up near retirement not only with losses to account for but a huge debt as well.

You can use a financial calculator here at www.calcxml.com or read more detailed examples at beginnersinvest.about.com.

What do you think?

This post was reposted from http://finlit.biz/debt/how-would-it-feel-to-be-debt-free/, originally written on January 22nd, 2013.