Pay Off Debt or Invest? What to Consider

When it comes to your future, the decision between paying off debt and investing can be a challenging one to make. Asking your financial advisor is always a good option to help you make a decision about your financial future and help create an effective investment strategy.

Whether you should pay off debt or invest comes down to context and different factors you have to consider. Factors like how your credit score may be affected and what specific things you choose to invest in.

Let’s explore paying off debt and investing, including what to consider for each option. 

Making a Case for Investing

Investing is an excellent way to set money aside for the future, and your dedicated financial advisor can help prepare a strategy. Of course, investing can be a complicated journey full of market fluctuations and patience. 

Luckily your investment strategy will focus on a core portfolio of diversified investments designed to mitigate risk and aim for high-quality, risk-adjusted returns. There are a variety of reasons why long-term investments are excellent for growing your wealth and expanding your portfolio.

Managing Your Risk Tolerance

Investments can be a roller coaster, but long-term investments can help take the stress out of market fluctuations. It’s a regular occurrence for the market to be unstable, and not reacting emotionally to market fluctuations can yield significant returns.

Investing Helps You Build Wealth

Investing not only helps you build your wealth but also establishes good habits to continue adding to your wealth over time. It can be something as simple as adding money to your investment account monthly, which grows your investment in the market organically. 

A Supervised Investment Journey

Your investment portfolio is thoroughly reviewed and tested by your financial advisor. The strategies implemented can switch between active and passive with third-party investment strategies and due diligence processes.

This supervision is done to help assist with risk management and ensure you’re up-to-date on all your investments.

Tax Management

Long-term investments can reduce your yearly taxable capital gains amount significantly. Capital gains tax is a mandatory payment made to the Canadian Revenue Agency when you sell an investment at a higher value than the price you originally paid. 

Capital gains tax affects investments as well as business assets, equipment, and real estate. The less frequently you buy and sell stocks, the less your capital gains tax will be. 

Personal Financial Advice

The world of investing can be a confusing place, so having a dedicated financial advisor is always helpful. Your financial advisor can help you make sense of the bigger picture and keep you on track through adversity down the road. 

It’s important to have a team of experienced, professional financial advisors in your corner. 

What to Consider with Debt

Debt carries a high-interest rate, especially when it comes to credit card debt. Paying off your debt has a lot to do with preserving your credit score. Your credit score plays a significant role in your financial future and is crucial for getting a mortgage or car purchase loan. 

Your credit score can also affect things like insurance premiums or whether you are a good tenant candidate for a rental property. 

Paying off debt can be challenging, and a good place to start is to get in touch with your financial advisor to explore a personalized financial plan that meets your needs. Your financial advisor can help you assess your income, expenses, and lifestyle to create a plan that sets you up for the future.

Paying off your debt can start with something as simple as creating a budget with your financial advisor and sorting through your options. 

Balancing Your Financial Future

Paying off debt or investing does not have to be an either/or decision. Your financial advisor can help you by crafting a financial plan that meets your needs, is the best of both worlds, and allows you to begin balancing your financial future. 

Our team of financial advisors at Qopia Financial is in your corner to help you sort out your finances and plan for your future. 

Get in touch with our team to learn how we can help you grow your wealth today.

Qopia Investments is a trade name of Aligned Capital Partners Inc. (ACPI). ACPI is regulated by the Investment Industry Regulatory Organization of Canada (www.iiroc.ca) and a Member of the Canadian Investor Protection Fund (www.cipf.ca). Qopia Investments is registered to advise in securities and mutual Funds to clients residing in Alberta, Ontario, Saskatchewan, and British Columbia. This publication is for informational purposes only and shall not be construed to constitute any form of investment advice. The views expressed are those of the author and may not necessarily be those of ACPI. Opinions expressed are as of the date of this publication and are subject to change without notice and information has been compiled from sources believed to be reliable. This publication has been prepared for general circulation and without regard to the individual financial circumstances and objectives of persons who receive it. You should not act or rely on the information without seeking the advice of the appropriate professional.

Investment products are provided by ACPI and include, but are not limited to, mutual funds, stocks, and bonds. Non-securities related business includes, without limitation, fee-based financial planning services; estate and tax planning; tax return preparation services; advising in or selling any type of insurance product; any type of mortgage service. Accordingly, ACPI is not providing and does not supervise any of the above noted activities and you should not rely on ACPI for any review of any non-securities services provided by

Investment products are provided by ACPI and include, but are not limited to, mutual funds, stocks, and bonds. Non-securities related business includes, without limitation, fee-based financial planning services; estate and tax planning; tax return preparation services; advising in or selling any type of insurance product; any type of mortgage service. Accordingly, ACPI is not providing and does not supervise any of the above noted activities and you should not rely on ACPI for any review of any non-securities services provided by Qopia Financial.

Any investment products and services referred to herein are only available to investors in certain jurisdictions where they may be legally offered and to certain investors who are qualified according to the laws of the applicable jurisdiction. The information contained does not constitute an offer or solicitation to buy or sell any product or service. Past performance is not indicative of future performance, future returns are not guaranteed, and a loss of principal may occur. Content may not be reproduced or copied by any means without the prior consent of the author and ACPI.Disclosure of commissions in mutual funds in accordance with NI 81-102 (15):“Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated”.