Debt vs. Stocks: A Delicate Balance: Hypothetically, if you had 5k in debt and 5k in stocks, should you sell your portfolio to be debt free?

Generally, it’s advisable to prioritize paying off high-interest debt before investing. Interest on debt can significantly erode potential returns from investments. Therefore, if your debt carries a high-interest rate, it might be beneficial to sell your stocks to eliminate it.

So, 100% pay off the debt. You can’t beat a 17% risk free return after tax.

Sell. Fix the debt issue. Save up an emergency fund to stay out of debt. Then get reinvested.

Factors to Consider:

• Debt Interest Rate: If the interest rate on your debt is significantly higher than the potential return on your stocks, paying off the debt first is usually a good strategy.
• Stock Performance: If your stocks are performing exceptionally well and have the potential for substantial growth, it might be worth holding onto them for a while. However, this involves a higher risk.
• Debt Type: The type of debt also matters. Credit card debt often carries high-interest rates, making it a priority for repayment.

How does credit card interest rate work — Royal Bank