I always get asked … “Where and what is the best place to invest my money?” Well my first answer -is always “YOU”! After that – it really depends on your own personal situation. There is lots of advice on the internet – in books – from friends – all with the latest trend or the hottest stock tips. If  you are carry debt from credit cards or any other high interest loans, I personally recommend that you need to focus on them first!

Let’s say you have a $10,000 balance on a credit card with a 18% annual percentage rate. Credit card interest expense is not tax deductible, meaning you should only invest if you think you can earn a 18% after tax return on your investments. Given that the historical long-term return on equities has been somewhere around 11-12%, this seems highly unlikely. In this case, it would be foolish to invest.

Second, if you have any fixed income investments (e.g., Canada Saving bonds, GIC’s), you should likely sell them and pay off your debt as the return on those investments is likely to be less than the cost of the debt (unless you have a subsidized student loan).

Even if you are really eager to invest, you need to do what is best for. Your ultimate goal should be to have no debt and an abundance of great, rewarding investments. It will take patience and hard work, but this is a goal that you can, and will, accomplish. It takes commitment and a plan.

When you clear that debt before putting your money in other investments, you will foster good financial habits!