Payoff a loan or invest?

[Phillip Overpeck]

So I have a car loan that is about $470 a month. I currently owe about 11k on this vehicle. I also have around 20k in available capital that I could use to pay off this loan or to invest.

My question is this. Does using all 20k as investment capital play out better in the long run, or paying off the loan and saving that $470 a month.

Thinking about this like an investment here is my math, looking for a sanity check:

If I pay off the loan, my ROI is close to 50% per year. $470 x 12 months = $5640 yearly savings. Divide that by the $11k loan amount and I end up with 51%. However there is no equity or appreciation. I just have an extra $470 a month to save towards future investing.

If I decide to invest it, I doubt I could find an investment with a 51% return, however I also know I would have an asset that could appreciate in value while also generating maybe $200 - $300 in cash flow.

Overall, I am a rookie investor and I am still in the education phase. So I am leaning towards paying off the vehicle. That would set my ability to buy now back, but I am also still learning a lot, and it would give me plenty of time to learn strategies and get comfortable with evaluating deals.