Survey: pay or save?

[scooper8]

Survey: Ano gagawin o pipiliin nio dito?

a. pay debt in 6months, but almost little/nothing left for savings/investment

or

b. grow your savings/investment but remain in debt for up to 2yrs?

A friend asked my opinion, sabi ko A para tapos na agad agad and makafocus sa savings/investment. pero feeling nya mas okay ang B kasi pakiramdam nya nag-grogrow sya kahit technically lubog siya sa utang. i think valid naman point niya. pero parang antagal kasi ng 2yrs compare sa 6months para maging debt-free. tingin nio?

 

[paddymcginty]

@scooper8 If the debt's interest doesn't change if you pay it early or monthly then pay them monthly.

 

[pazzz]

@paddymcginty End thread

 

[thing2]

@paddymcginty Tama, debt is not a burden it is a tool. Always manage your risk. Marami sa mga big companies na nabubuhay sa utang kahit alang kita pero for some reason buhay pa rin sila. Like some airlines na di mawala-wala and airplane manufacturers na naluluge pero nandyan pa rin gumagawa ng armas.

 

[elvennice]

@thing2 yes this is the ideal exhibit A but most of the time, for the everyday folk -- debts listed here are cc debt from instant gratification or a business without a logical business plan.

 

[rachelpowers89]

@paddymcginty This. Makaka save ka actually if ganito.

 

[kapere]

@paddymcginty My thoughts exactly!

 

[eminem4life]

@scooper8 I hate debt so i choose A

 

[narasa12]

@eminem4life same lol hahahaah it's too much math!! having to calculate how much is going to whom or what monthly

 

[suesabelle]

@scooper8 Pay. Always settle all your debts first para derecho savings na lahat ng funds after.

 

[cozimokid]

@suesabelle korique

 

[kekeli]

@suesabelle Amen

 

[edenrivers]

@scooper8 If the growth will offset your debt + interest, then do B. Otherwise, complete na lang muna yung payments

 

[ivana626]

@scooper8 Emergency funds then debt then savings/investments

Mahirap walang emergency fund kahit maging debt free

 

[synicalx]

@ivana626 Agree with this one. People tend to overlook that not having an emergency fund actually puts you into the cycle of debt. With an EF, you actually have something to pull out in case of an emergency instead of getting more debt to cover for it.

 

[rauch]

@scooper8 If your investment is generating more than the interest of the debt, then B.

 

[tmcp]

@rauch I agree. This is called leveraging and businesses do it all the time.

However, OP, if you borrowed the money from your friend in good faith at zero interest, then don't be an asshole. Pay that person ASAP.

 

[deborah101]

@scooper8 So survey lang naman between A or B. No right or wrong answer naman (so no one will tell me that my personal opinion is not valid).

My answer is IT DEPENDS.

1. If OP's friend will have anxiety, mental anguish, and sleepless night in relation to his debt. Then A.
2. If the interest rate was so high (not fixed) and it's compounding (ex. CC), then A.
3. If it's fixed and will not accrue additional interest or additional penalty. Then B.
4. If the ROI/income for the suggested investment will be higher than the interest rate of the fixed rate debt/mortgage, then B.

OP friends must learn how debt works. Itcan be constructive or destructive depending on the one who uses it. Most debt free tycoon and typans started ro expand their business using OTHER PEOPLES MONEY, In times of declared insolvency and bankruptcy, this typan and tycoons usually have hidden funds/wealth where the gov have no jurisdiction for garnishment.

 

[zoidar]

@scooper8 Dont pay debt na halos wala ng matira, need pa rin emergency funds.. if magkasakit ulit, baka mahirap mangutang ulit..

 

[tmcp]

@scooper8 What's the interest rate of the loan?

Also, who is the loan provider? Family/friends or a lending institution?