>When I was younger, I wrestled with whether to pay off debt, build a cash reserve, or invest for the long-term future? Each was important. Yet, they seemed like conflicting, even mutually exclusive goals.
For example, if I paid extra on any credit card balances or my mortgage loan, then I’d have less cash in the bank or fewer dollars to contribute to retirement and college-savings accounts. I could earn a guaranteed return that is equal to loan interest rates if I paid down debt. But then I’d forgo the potential for compound growth in the stock market.
What I learned was that a positive move — whether making a loan payment, increasing my cash reserve, or investing for the future — can increase my net worth. I don’t have to choose the best move to make. I simply have to take one of these actions and, at the same time, avoid taking on additional debt or spending more than I just saved.