The choice between having $50,000 invested and $10,000 in debt or $40,000 invested with no debt looks like a simple math problem. It really isn’t, because the right answer depends heavily on the interest rate on the debt, the type of investment, your cash reserves, and how much risk you can comfortably handle.
Someone carrying low-cost debt may reasonably keep more money invested, while someone juggling expensive credit card debt could benefit from wiping out the balance first. The important part involves comparing a guaranteed financial cost with an investment return that never comes with a guarantee.
