Invest in Your Debt Calculator for Answering the Age Old Question: Pay Off Debt, or Invest?

Invest In Your Debt Calculator Sign

This free online calculator will calculate the return on investment from using your discretionary income to pay down high-interest debt, and then compare those earnings to those you would earn from a traditional investment.

The goal of this calculator is to show you why paying off debt is the safest and best way to invest money. But before you start plugging in the numbers, let's first make sure you are fully aware of all of the factors that need to be considered.

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Invest In Your Debt Calculator

Calculate your returns from investing in your debt as opposed to investing in traditional investments, to see how paying off debt can offer the safest, surest, and highest financial AND emotional returns.

Special Instructions

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Selected Data Record:

A Data Record is a set of calculator entries that are stored in your web browser's Local Storage. If a Data Record is currently selected in the "Data" tab, this line will list the name you gave to that data record. If no data record is selected, or you have no entries stored for this calculator, the line will display "None".

DataData recordData recordSelected data record: None
Highest Interest Debt InfoHighest Interest Debt InfoHighest Interest Debt InformationHighest Interest Debt Information

Highest Interest Debt Information:

Determine your highest interest outstanding debt and enter its current terms in this section.

Balance:Balance owed:Current balance owed:Current balance owed:

Current balance owed:

Enter the balance owed on your highest interest rate debt. Enter as a dollar amount but without the dollar sign and any commas.

Rate:Interest rate:Annual interest rate:Annual interest rate:

Annual interest rate:

Enter the interest rate of your highest interest rate debt. Enter as a percentage, but without the percent sign (for .18 or 18%, enter 18).

Monthly pmt:Monthly payment:Monthly payment:Monthly payment:

Monthly payment:

Enter the monthly payment amount for your highest interest rate debt. Enter as a dollar amount but without the dollar sign and any commas.

Deciding Factors

Deciding Factors:

Enter the factors related your tax bracket and your preferred traditional investment. The calculator needs these factors to determine which is better, using cash assets to pay off debt or to invest them (or keep them invested) in a traditional investment.

Tax bracket:Tax bracket:Tax bracket:Tax bracket:

Tax bracket:

Enter your tax bracket (10, 15, 25, 28, 33, or 35) expressed as a percentage, but without the percent sign (for .15 or 15%, enter 15). If you're unsure as to what to enter, visit the IRS website to view the latest tax guide.

Mon invest:Monthly investment:Monthly investment amount:Monthly investment amount:

Monthly investment amount:

Enter the monthly amount you have available for investing or paying down debt. If you are only interested in a lump sum investment, leave this field blank and enter the lump sum amount in field below this one. Enter as a dollar amount but without the dollar sign and any commas.

Lump sum:Lump sum amount:Lump sum investment amount:Lump sum investment amount:

Lump sum investment amount:

If you have a lump sum of money available for investing or paying down debt, enter it here. If no lump sum is available, enter zero or leave blank. Enter as a dollar amount but without the dollar sign and any commas.

Trad ROI:Traditional ROI:Traditional investment rate of return:Traditional investment rate of return:

Traditional investment rate of return:

Enter the before-tax interest rate you expect to earn on a traditional investment where earnings are taxable. Enter as a percentage, but without the percent sign (for .15 or 15%, enter 15).

Upfront costs:Upfront invest costs:Upfront investment costs:Upfront investment costs:

Upfront investment costs:

Enter the amount of any upfront fees or commissions you will pay for a traditional investment. Enter as a dollar amount but without the dollar sign and any commas.

Annual fees:Annual acct fees:Annual account management fees:Annual account management fees (optional):

Annual account management fees (optional):

Enter the amount of any annual account management fees you will end up paying with a traditional investment. Enter as a dollar amount but without the dollar sign and any commas.

Debt earn:Debt earnings:Earnings from investing in debt:Earnings from investing in debt:

Earnings from investing in debt:

Based on your entries, this is how much you would earn from your debt investment.

Trad earn:Traditional earnings:Net earnings from traditional investment:Net earnings from traditional investment:

Net earnings from traditional investment:

Based on your entries, this would be your net earnings from a traditional investment.

If you would like to save the current entries to the secure online database, tap or click on the Data tab, select "New Data Record", give the data record a name, then tap or click the Save button. To save changes to previously saved entries, simply tap the Save button. Please select and "Clear" any data records you no longer need.

Help and Tools


Don't Discount EROI: Emotional Return on Investments

The Hidden Reason We End Up With High-Interest Debt

Contrary to what most "financial experts" will tell you, when it comes to deciding whether to invest or pay off debt, it's not simply a matter of calculating the "financial" return on investment. Because to make the best decision, you must also take the emotional return on investment into consideration.

If you choose to invest your money, you will open yourself up to all the fear, worry, and anxiety that comes from the genuine possibility that some world event (9/11, financial market meltdown, etc.) might cause the value of your investments to plummet.

On the other hand, if you choose to pay down your debts you will experience the opposite -- less fear, less worry, less anxiety and more peace of mind.

So why isn't anyone trying to sell you on investing in your debt? Because ...

Nobody gets a commission or recurring account management fees for selling you on paying off your debts.

When you purchase a traditional investment, someone gets paid a commission for selling it to you.

Worse yet, if you go with a full-service broker, you get to pay recurring account management fees -- regardless of whether your investment makes or loses money. Now there's a major conflict of interest for you.

On the other side of the coin, when you pay down your bills you don't have to pay any commissions or account management fees, and the returns on your investment are guaranteed!

Adjust Calculator Width:

Move the slider to left and right to adjust the calculator width. Note that the Help and Tools panel will be hidden when the calculator is too wide to fit both on the screen. Moving the slider to the left will bring the instructions and tools panel back into view.

Also note that some calculators will reformat to accommodate the screen size as you make the calculator wider or narrower. If the calculator is narrow, columns of entry rows will be converted to a vertical entry form, whereas a wider calculator will display columns of entry rows, and the entry fields will be smaller in size ... since they will not need to be "thumb friendly".

Show/Hide Popup Keypads:

Select Show or Hide to show or hide the popup keypad icons located next to numeric entry fields. These are generally only needed for mobile devices that don't have decimal points in their numeric keypads. So if you are on a desktop, you may find the calculator to be more user-friendly and less cluttered without them.

Stick/Unstick Tools:

Select Stick or Unstick to stick or unstick the help and tools panel. Selecting "Stick" will keep the panel in view while scrolling the calculator vertically. If you find that annoying, select "Unstick" to keep the panel in a stationary position.

If the tools panel becomes "Unstuck" on its own, try clicking "Unstick" and then "Stick" to re-stick the panel.