Invest now with debt, or invest later debt free?

[Cody Smith]

Hello BP community, quick question for ya. I am a new investor, soaking up all the information I can and building my business plan. I have two paths I can take to begin investing, wondering what you guys think or suggest. A little supporting info, I have ~$20k in accessible capital, and ~$21k in debt, split between a student loan and a car loan.

Option 1: I planned on immediately paying off the $8k in student loan debt, paying off the other $13k over the next 12 months, building our reserves back up once the debt is paid, then begin to invest with less debt and monthly payments.

Option 2: Continue to pay the two loans off over time, since they are low interest rates and maintain credit profiles to help with loans. Take that $20k I have on hand and invest in my first property. This would leave me with an asset, but without the cash reserves I would like to have set aside when I move to purchase my first property.

What are some of the other benefits/downfalls of either of these plans? Thank you guys for the help, this is truly a community of selfless people who help build fortunes and legacies. Stay safe.

-Cody

[Joanne Eriaku]

@Cody Smith, I'm going to guess that half of the comments will encourage you to pay off the debt and the other half will encourage you to invest, in other words, you may be right back where you started, which is undecided....My two cents; only you can decide which path you would like to take, both have advantages and disadvantages. Sit down with yourself and write out what is the best thing which can happen if I pay off the debt, what is the worst thing which can happen if I pay off the debt, do the same scenario planning for investing now, and go where the greatest weight is.