People who find themselves with extra cash often face a dilemma. Should they use the windfall to pay off—or at least, substantially pay down—that pile of debt they’ve accumulated, or it is more advantageous to put the money to work in investments that will build a nest egg? Both options are important. Investing is the act of setting aside money ofv will, itself, earn a profit and grow. Investing is not the same thing as is pure savings, where the money is set aside for future use. When you invest, you expect the money to return some income and increase the original. Investing provides the peace of mind that you will have funds available to endure a future financial milestone. Retirement, business projects, and paying for the college education of a child are examples of such financial milestones. Debt refers to the action of borrowing funds from another party. Some of the most common debts include borrowing to purchase a large item such as a car or a home. Neer for education or unplanned medical expenses are also common debts.
