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44 posts
Investing all of it at once wins whenever the market rises, which is most of the time. That is a fact about averages rather than about you, and here is when averaging in is the right answer anyway.
A 0% transfer on $9,000 with a 3% fee saves $1,784.15 if you clear it in the window. Even doing it badly still saves money. There is only one way it actually costs you, and it is not the fee.
They cost more than building it yourself, and they are still the right answer for most people. On $500 a month over thirty years the difference is $55,068, and here is who should pay it.
For most people holding the same index, no. On $100,000 over five years in a taxable account the tax difference is $312.46, which is about $62 a year. Here are the three cases where it genuinely does matter.
There is a rate above which paying the debt wins and below which investing does, and it sits exactly at the return you expect. Three households, $500 a month, ten years, and three different answers.
The avalanche saves more money. The snowball gets finished more often. On four real balances that difference is $552.79 and one month, and here is when $552.79 is worth paying.
The account has one job: be there in a day and not lose value. What that rules out, what the yield is worth on $15,000, and why a CD you break at month five nets $64.
One is for the expenses you know are coming. The other is for the ones you do not. Two households, the same money, the same balance every month, and one of them ends December with $296.