This is a massive question because people have enough money invested into stocks, index funds, or retirement to basically clear out all of their debts.

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1. You invested in a Company and Got lucky and made some money but you also have a lot of debt
- You’re job as an investor is going to be to test that business out every 6 months to make sure it’s still on track

For example:
- A lot of people have a lot of debt, whether credit card debt, car loan debt or student loan and even mortgage
- Now let's say this person got lucky and invested in Bitcoin or tesla or Gamestop at its peak
- Obviously, this person has made some money, but they have no idea how they made money and they basically just got very lucky
- They wouldn’t be able to analyze the business to make sure it's not overvalued

What to do:
- So if they did it with a taxable account, it wouldn’t be a bad idea to sell those investments if you don’t understand them honestly ( put money on the side for taxes )
- And then use the rest of the money to cover your debts ( and then focus on paying off your debts, before investing again )
- Now in a retirement account like a Roth option, the same thing applies except you won't withdraw the money, you sell it and reinvest the money into something safer within the Roth IRA to avoid taxes and penalties

Here is why:
- Because the risk you run is losing all your money over a period of time because you don’t understand it
- You should also focus on investing in things you understand ( that’ll give you confidence )
- My advice is always by the way, pay off debts except for the mortgage before you start investing.

2. You have Good investments into Index funds, stocks you understand, and ETFs but have debt that’s charging you 10, 20 or 30% interest, what do you do?
- Well if you understand the investments and you understand their potential for growth, selling them is going to cost you a lot of money
- So the right questions to ask is, should I keep investing while I have that debt

For example:
- I have $10,000 invested into rock-solid investment and I’m confident with facts and history
- But I also have $5,000 worth of debt paying 35% interest rate, do I sell and pay it off
- The answer is no, you pause all your investment activities and you just focus on paying off debt ( and once you’re debt-free, you resume your good investments habits )

Here is why:
- $10,000 invested today at 10% return will give you $173,494.02 in 30 years
- So instead of giving that up, just take some time to focus on paying off debt only and then resume back to investing in solid companies
- Because you just invested an additional $500 on that 10k every month, you would have 1.2M in 30 years

3. Retirement Accounts ( you have pretty good investments or mediocre investments in retirement accounts you control )
- For the good investment into retirement accounts like 401k here is the truth I want you to know
- It makes 0 sense usually to withdraw that money

Here is why: 3 reason
- Penalties, taxes, and compound interest ( the price is too high )
- The penalty for early withdraw on the 401k is 10% and you have to ordinary taxes on the amount you took out
- So if you take $10,000 you are only left with around $6,300, which means you just lost 37% of your money just like that

The answer is: pause investing and pay off the debt

For mediocre retirement investing:
- Roth options and so, penalties also apply but not always as much
- But again you don’t want to lose a ton of your money
- So just sell the investment you know nothing about and reinvest it back into something you understand

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I'm an Accountant but I'm not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

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