Mark Cuban on Debt Payoff Returns

Posted by admin on Thursday, December 6, 2012

Money Quotation saying debt costs much higher percentage than we can earn on any investment – or at best will eat up the gains made on investments and should be paid off. Mark Cuban said:
 
you're better off paying off any debt you have because that's a guaranteed return Quote
 

“If you’ve got $25,000, $50,000, $100,000, you’re better off paying off any debt you have because that’s a guaranteed return” — Mark Cuban

 

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This quote from Mark Cuban suggests that individuals would be wise to use extra funds to pay down existing debts rather than other uses like investments or savings. Some key points in interpreting his perspective:

  • Cuban implies that eliminating debt is a guaranteed way to achieve an immediate “return” on one’s money through interest avoided, unlike less certain prospects of earning returns in markets.
  • He portrays debt repayment as a lower-risk option than other uses of available capital due to the assured savings of no longer owing interest.
  • However, reasonable experts also note that some debt like mortgages may be worthwhile holding longer if interest rates are very low and the funds could potentially earn higher returns through investments over the long run.
  • A balanced interpretation is that Cuban reflects a prudent viewpoint, but optimal personal finance requires evaluating individual circumstances – debt freedom suits some, while for others a diversified approach to debt management, savings and investments optimizes well-being according to priorities, risk tolerance and time horizons.

Overall, the quote conveys Cuban’s perspective that eliminating debt is a sure way to benefit from available funds. But the best analysis considers this viewpoint alongside others, recognizing that responsible debt management complemented by savings and prudent investing can optimize long-term financial security for varying temperaments and situations according to personal philosophy and changing needs over the lifespan.

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