Shoebox Investor

What is a shoebox investor? An investor who generally pays himself first. The idea is that any money you can store in a shoebox or piggy bank, should be invested in the market. It is not how much you invest, it is the time value of money you should focus on. The earlier you put the money in the market, the longer you keep it in, the higher the chances of reaping the benefits of accumulating dividends. The reinvested dividends will buy you more shares.

Pay yourself first

Tuesday, May 20, 2008

Buying stocks OR paying off debt

Buying stocks or paying off debt.  My suggestion is that given the stocks are selling low, it is best to buy stocks and pay off debt slowly.  That is, if you have a reasonable amount in stocks while they are low and start paying off more in debt when stocks go up.  If you are paying around 8-11% in interest in debt, it is best to pay insterest only and invest the rest in stocks. 
 
When you feel you have enough invested, then you can start paying more on your debt.  In this way, while you are paying off debt, your dividends will continue to grow. 
 
Invest wisely
Shoebox