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JL Collins: How to Beat Wall Street with a Boring Portfolio [GREATEST HITS WEEK]
Afford Anything
Comparison of Paying Off Debt vs. Investing: Risk and Volatility
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Historical evidence supports positive market returns, suggesting an 8% conservative long-term projection. Paying off debt with 5% or 6% interest rates implies earning that rate as a return on investment. Clearing a 6% debt is akin to gaining a stable 6% return without the volatility associated with stocks. Stocks offer high returns but entail risks like market crashes, demanding investors to endure and continue investing for long-term gains. Volatility and risk are inherent in stock investments, contrasting with the stability of debt payments. While stocks are commonly viewed as risky, they are better defined as more volatile than alternatives like savings accounts. Putting $100,000 in a savings account guarantees erosion of purchasing power over time, highlighting the risk associated with low-yield savings versus investing in stocks over the long term.
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