[USER]

I’m trying to make a smart financial decision and would really appreciate your input. I currently have a car loan with a 4.99% interest rate.

I have enough extra cash to either pay it off early or invest that money in the S&P 500.

If I choose to invest, I’ll continue making the regular monthly payments on the car loan, and I plan to add a small extra payment every three months to reduce the principal over time.

On the other hand, paying off the loan now would give me peace of mind and free up my monthly cash flow — but I might miss out on long-term investment gains.

What do you think makes more sense financially in today’s market?

Would you prioritize the guaranteed return of paying off debt, or take the risk and invest in the stock market?

[Ryan]

If you’re under 45 I would invest if over payoff early

[Scott]

Risk and depreciation is what you’re not considering when looking at “spread games” and at the end of the day, it’s small ball.

Be free of debt for things that go down in value and your investing muscle will perform better.

So, my advice is pay off the car debt first, then get a savings plan that allows you to pay cash for cars moving forward, and invest the rest.

As I reflect on the many things that allowed me to achieve fire at 44.

Always paying cash for gently used cars was one of the key components.

[Jason]

Interest rates and returns aside, I think the best move toward FIRE is to stop financing cars permanently.

Payment mentality is the main thief of financial freedom.

Pay it off and then pay the payment to your brokerage account instead every month for life.

[Chad]

How much do you owe, what is your payment, and what is your term?

[Michael]

We haven’t been able to recapture the all time high in the s&p this year.

Are you willing to wait with negative equity if it sink and have a car note?

Your rate isn’t horrible but you are talking about a high risk strategy.

[Jim]

If you’ll actually and infallibly invest the money, put it in investments.

If you’ll only, do it 95% of the time, pay off the car note.

[Author]

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