To PitBull88,
There are a lot of variations of thought here, all well intentioned.
Bottom line:
#1) Have your friend determine all (and I mean ALL) of the costs.
#2) Figure out which one will, at current trends, leave him with the most money at 65.
#3) Go with the option that leaves him with the most $$$ at 65.
Sounds simple? Taxes...? Interest...? Fees....? Self discipline...? Future needs...?
It is not simple. But the goalpost should be "In the long haul which of this choices leaves me on financially solid ground when I am ready to retire?"
I received my tax return yesterday and killed another credit card. Now I have only one (1) to kill. I do not have good self discipline so I cancelled all of my cards several years ago. In the long run this may have hurt me because it lowered my credit score by lowering my revolving credit. Good new = I have killed a hell of a lot of credit card debt. Bad news = My credit score has suffered and I may have problems getting a good rate on a mortgage.
Have your friend focus on the long haul.
Regards,
Doug
There are a lot of variations of thought here, all well intentioned.
Bottom line:
#1) Have your friend determine all (and I mean ALL) of the costs.
#2) Figure out which one will, at current trends, leave him with the most money at 65.
#3) Go with the option that leaves him with the most $$$ at 65.
Sounds simple? Taxes...? Interest...? Fees....? Self discipline...? Future needs...?
It is not simple. But the goalpost should be "In the long haul which of this choices leaves me on financially solid ground when I am ready to retire?"
I received my tax return yesterday and killed another credit card. Now I have only one (1) to kill. I do not have good self discipline so I cancelled all of my cards several years ago. In the long run this may have hurt me because it lowered my credit score by lowering my revolving credit. Good new = I have killed a hell of a lot of credit card debt. Bad news = My credit score has suffered and I may have problems getting a good rate on a mortgage.
Have your friend focus on the long haul.
Regards,
Doug