I'm not going to beat the dead horse of comparing the S&P 500's pathetic dividend yield of 1.7% or the below-inflation rates of interest you can get in savings accounts to the 4-25% rate of return you can get by paying off your debts.
I'm simply going to point out the bullshittery that happens in America's blessed "stock market" that you sheep all invest in because you're stupid and never question why you save for retirement.
Your basic advice -- that paying down debt gives a better rate of return than virtually every run-of-the-mill investment -- is so obviously trve that it's hard to believe that there's still a debate about it... but there is
ReplyDeleteI would only point out that on our side, we are giving out disinterested advice. For those public school victims under age thirty reading this, "disinterested" does not mean that the Cap't & I don't care; that would be "uninterested". 'Disinterested' means we have no personal or financial interest in the outcome of the debate
Contrast that with the professional money managers on the other side. If you use your excess bucks to pay off your credit cards, they make nothing. But if you use that money and also take out a HELOC to buy the mutual funds they will recommend and 'manage' for you, they get their next European vacation paid for with the fees they will charge you
p.s. The link you gave apparently conflates volatility indexes with the "stock market". That is a bit like conflating Prius owners with Formula One race car drivers: even the basic linkage --- "cars" vs "asset classes" --- is weak at best; and they have virtually nothing else in common
Also, you suggest that "saving for retirement" is somehow a stoopid idea. Do you really plan on living off your SSA benefits &/or working forever?? Take it from someone who lives frugally and saved and invested like crazy and then retired at age 56, I think you might come to regret that decision
Instead of 401(k)'s, I am looking into apartment buildings. And parking lots, along with income producing assets. I don't want to wait until I'm 65 to be able to use my income. Although retirement age is not 67.
ReplyDelete