Q: I am a junior in college now and I have slightly fallen in the credit card trap. My freshman year, all the credit card offers started to pile up and I couldn't resist. I chose a credit card with a low interest rate and limit so I could have some "control". Somehow I managed to get in debt quickly but luckily I caught it before it got ugly. It is almost paid off but I have been recently interested in investing.
Is it wise to take a while longer and pay off my debt so I can begin to invest? Or should I go ahead and pay off my debts and wait until I graduate and get a "real" job to begin to invest?
A: Without question I would suggest that you finish paying off your debts before you begin investing as it is doubtful your rate of return as a new investor would exceed the savings of paying off high interest debt.
I would use the time it takes to finish paying off the debts to learn as much as possible about investing. There are many ways to invest your hard earned money from real estate to stocks and bonds. What is best for you and your soon to be available funds is a question that should be given serious thought and some solid research before jumping in.
Read several books about investing and as much as possible about and by Warren Buffett and other great investment success stories as possible.
Keep us posted.
Mike Schiano
"The DebtBuster"
for Young Money
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