Jill on Money: Debt pay down vs investing, Apple

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As we close out July and enter the dog days of August, "Jill on Money" listeners confront an age-old question: When is debt pay down preferable to investing?

The answer depends on your personal situation, of course. For Lauren in MA, her free-cash flow is better used to beef up her retirement savings, while for Phil in VA and Wesley in CA, they are better off focusing on paying down student loans.

One note on Wesley's situation-he wants to help out his parents, who are struggling financially. Perhaps one of the best things to do when confronting this situation for parents, adult children or even dear friends, is to pay for fee-only financial planning on their behalf. Check out NAPFA.org to locate a professional in your neighborhood.

We fielded allocation questions from April, who wanted to understand the differences among bond funds; Thaddeus from Louisville is weighing whether to move $200K in CDs to a managed account with a broker; and Doug from Michigan, who owns 5 different asset allocation funds.

David from Boston rounded out the show with a great problem: he was fortunate enough to invest in Apple stock a long time ago and has now amassed a staggering $2 million in the company. We help him figure out how cash-in on that winning bet.

Here are web sites and resources mentioned in this week's show:

-- Jill's Blog

-- How to Choose a Financial Advisor: 10 Questions

-- NAPFA: National Association of Personal Financial Advisors (fee-only advisors)

-- Best CD Rates

-- E, EE and I Savings Bonds

-- Where to Stash Your Cash

-- Long-term Care - US government web site

-- Long term care conundrum

-- Financial documents: What to shred, what to keep

-- Estate Planning: the Documents You Need

Thanks to everyone who participated and to Mark, the BEST producer in the world. If you have a financial question, there are lots of ways to contact us:

Call 855-411-JILL and we'll schedule time to get you on the show LIVE

Send an email: [e-mail]

Tweet me: @jillonmoney

Post a comment on this blog

[MegaProcrastination]

ALWAYS pay off debt first. The money saved on the interest alone will be more than an investment will yield. As for retirement, if a person can afford to pay off their mortgage and put money away for retirement at the same time then definitely put money away. If they're looking at having a mortgage hanging over their head into retirement, pay off the dad-blamed mortgage first. Just not having that money need to go out every month will make a huge difference in a person's cost of living, never mind all of the interest saved by paying it off early.

I know, I know, economists would have us believe that borrowing money is what keeps the economy going. Realistically it's only what's in a bank's best interest. Granted, there are times to borrow but if a person can afford to make a payment on something like furniture they can afford to save for what they want then pay cash. Without the interest a person has more money to invest plus has more money to spend thereby putting more of it directly into the economy.

I agree with eddo9492. Anyone who invests money while borrowing needs to rethink their financial strategy.

[eddom9492]

Anybody who 'invests' with one hand and takes out debts with the other is mentally ill IMO