By Rudolph Rosenberg | Monday, December 09, 2013
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It’s the discussion that never gets old: How to find good investment opportunities. If you look online or speak to a financial advisor, you’ll likely hear about the most common and popular investment options. They all follow the same pattern of low return for low levels of risks and increasing returns with increasing risks. But there’s one risk-free investment opportunity that yields double-digit return—and most of us already have access to it. It’s repaying your own debt. Do you want to take a second to read that last sentence again? That’s right, you heard me, repaying debt is one of the best investment opportunities out there, if not the best.
Not losing money is like making money
How can repaying debt be an investment? Well, not losing money is actually the same as making money. In both cases, you end up with more money at your disposal than if you’d done nothing. For debt repayment, it’s all about the interest rate; the higher it is, the more money you lose, which in turn makes paying down your debt an even better investment opportunity. I’ll save you the math on it, but repaying a 15 percent credit card debt will save you the same amount as you’d earn with a 12 percent return-on-investment (ROI) opportunity—and those types of opportunities don’t come by often.
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