Start Building your Future Knowledge.

Watch the full video here:https://youtu.be/bEEBjxWqX9A

When it comes to the question of “should I pay off debt or should I invest”, it's always a bit of a tricky conversation - because clients come to me with an abundance of debt, but they also have investment goals.

My strategy is quite simple. There's always an opportunity cost. So, if you have a monthly budget, always split it. We'll allocate a small percentage towards your short-term debt to kill the debt repayments, to kill the interest.

I also don't neglect investment planning because R1000 a month now will be worth something in five years. By that time, your debt will always be paid off. So my recommendation is simple. If you give me R1000 budget, we're going to allocate R500 a month towards your short-term debts to kill the interest, to kill the monthly debt repayments. We're going to allocate R500 a month towards either your discretionary or your long discretionary investment.

There's always an opportunity cost. You decide to kill your debt in the next five years and focus solely on that, you've effectively lost five years worth of contributions and five years worth of compounding interest.