Paid off my truck 9 months early but now I'm wondering if I should have invested instead

Last month I made the final payment on my F-150. Felt great for about a day. Then I started doing the math on what that 4.2% interest would have earned in a S&P index fund over those 9 months. My buddy Jake paid his truck off over 3 years and threw everything extra into VTI. He's up about 12% while I saved maybe $400 in interest. But there's something to be said for having no car payment hanging over you when work slows down in January. Which side makes more sense for a guy with an irregular income like mine?

2 comments

2 Comments

wyatt_mitchell264d ago

Man, I feel this in my bones! With irregular income, that paid off truck is peace of mind you just can't put a price on. I've been there where work slows down and that monthly payment hanging over you makes everything feel ten times worse. Keeping the cash flow flexible is way more important than squeezing out a few extra percent in the market, especially when you're not a doctor or banker with a steady paycheck. You made the right call for your situation, plain and simple.

seth_singh204d ago

Is it really that serious though? I mean, you could just keep an emergency fund and invest the difference, and still have the truck.