Author Topic: cash bonus from work: should i invest it, or use it to wipe out debt?  (Read 1773 times)

thatbrowncat

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Hey guys.

I'm needing some opinions on what to do about my windfalls. Just got my 13th month pay, plus my mom decided to gift me with cash.

That's Php 19431 +  php 7000= php 26, 431.00

Now here'w whats been buggering me.
Ever since I read MMM's posts
"Your debt is an emergency" and "wealth advice that should be obvious", i have looked at my health insurance payments differently.

I used to be okay with paying it in a quarterly basis. At the same time, i originally planned to invests in stocks  (while paying this insurance as the quarters went by)

Then again, my life was never the same after MMM.

I have an outstanding php 112, 866.00 payable to my health insurance. That's php 8,682 good for 13 quarters (3 years and 1 quarter).

According to my calculation, i would have php 86,435 left to pay if i pay the cash bonuses i just received. That would mean i gHey guys. I'm back.

I'm needing some opinions on what to do about my windfalls. Just got my 13th month pay, plus my mom decided to gift me with cash. 19431 + 7000=

Now here'w whats been buggering me.
Ever since I read MMM's posts
"Your debt is an emergency" and "wealth advice that should be obvious", i have looked at my health insurance in a weird way.

I used to be okay with paying it in quarterly installments. My salary would be used to fund my e fund and stock investments (while i still pay hmo quarterly)

Then again, my life was never the same after MMM.

I have an outstanding php 112, 866.00 payable to my health insurance. That's php 8682 good for 13 quarters (3 years and 1 quarter).

According to my calculation, i would have 86,435 if i use the cash bonuses i just received. That's 9 quarters or 2 yrs and 1 quarter.

But i also want to invests in the stocks right now. I feel i might regret it if i dont invest the cash in the stock market. I might miss out.

To sum it up: i want to wipe out my outstanding debt and be free, but i also cannot ignore the fact that i also want to see my cash grow (and the cash i get from that may help me buy freedom)

Any thoughts on how you would approach my situation?

***many thanks to those who would take their time to answer my query ;)

larmando

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Re: cash bonus from work: should i invest it, or use it to wipe out debt?
« Reply #1 on: November 17, 2014, 04:27:00 PM »
Are you paying any interest/extra because of these installments?

thatbrowncat

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Re: cash bonus from work: should i invest it, or use it to wipe out debt?
« Reply #2 on: November 17, 2014, 05:51:00 PM »
No interest

pzxc

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Re: cash bonus from work: should i invest it, or use it to wipe out debt?
« Reply #3 on: November 17, 2014, 05:57:17 PM »
Without interest, there is no reason to pay it early. Especially if it's no interest for 3 years.

larmando

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Re: cash bonus from work: should i invest it, or use it to wipe out debt?
« Reply #4 on: November 18, 2014, 06:14:32 AM »
Indeed, there are only two reasons to pay it early:

1) There are chances you won't have the money when it's due
2) They give you a "discount" for paying it early (which is equivalent to paying interest in the first place, although they don't mention it)