The Situation

The Core Trade-Off

Every dollar directed toward debt payoff produces a guaranteed, risk-free return equal to the debt's interest rate. Every dollar invested in a diversified portfolio produces an uncertain return — historically averaging 7–10% annually over long periods, but with significant short-term volatility. The decision is a risk-adjusted comparison between a certain return and an uncertain one.

Paying off high-interest debt is the only risk-free investment with a guaranteed double-digit return . Most portfolios cannot reliably match it.

— Worthune Decision Framework

• You have both debt and investable savings and are uncertain which deserves priority
• You're carrying debt at varying interest rates and trying to determine the optimal allocation strategy
• You've been told to invest while in debt without a clear framework for when that advice applies