Does paying off debt with low interest rate even make sense?

[bamedrano]

@miriamc I normally base that decision on high yield savings accounts rates. I'm getting ~5% right now, so it doesn't (mathematically) make sense for me to pay off any debt below that number.

However, the gains you're making are tiny. And getting rid of the burden of debt can be a lot better for your emotional health than the $100 you'd make playing interest rates.

 

[joy_m]

@miriamc You are not factoring risk at all in your calculations. you could buy bitcoin and argue 100% return, but it is ultra high risk. paying off student loans is always a high priority since it is not dischargeable.

people also often forget that the stock market correlates with recessions and layoffs. meaning you are more likely to sinultaneously lose your job and tank your portfolio. paying off your hiuse is a hedge against that usually and reduces a catastrophic trifecta of losing your job, losses in stocks, and losses in home value (which may perforce you into a home sale with impaired gains).