Pay off debt or invest?

dalleDF

MSE-o-sphere, I need your advice.

Tomorrow is meant to be my debt free date, when I will be clearing the last £700 or so of my CC debt. However, I really want to invest in Neil Woodford's new investment trust before it becomes oversubscribed (which it will very quickly). The minimum investment is £1,000. I can't touch my emergency fund as it is locked away until July, if I use it I before then I will lose the 6% interest rate.

However, I have a 0% offer from Barclaycard to transfer cash to my current account. So I could borrow it at 0%, invest the cash for hopefully a decent return and then pay the balance off over the next couple of months. SO it means extending my DFD by realistically 2 months, which obviously I don't really want to do. But this could be my only chance to get in to this investment opportunity, which I am convinced is a good one.

Just by writing this out I think I have talked myself out of it. Clearly I just do not have the money and I should accept that. But just in case, does anyone have any other thoughts on this? I just need a second / third opinion.

Minty123

My thoughts/opinion is that you don't have the money to do this.

Pay off your CC debt, safe up money for investments and then invest.

I would also comment that it isn't much of an Emergency Fund if you can't access it in an emergency? (Although I agree investing isn't an emergency, so maybe you would forgo the interest in an actual emergency?)

dalleDF

Thankyou for your comments. The emergency fund will be liquid assets which I can actually access from summer when the lock-in period is up. But yes, in a really dire emergency I could access it now and forfeit the interest. You are quite right, I should wait and pay off CCs first.

twiggy86

I would wait, clear your debts (congratulations!), save up and then invest. Whilst you may see this as trying to take a positive step to generate income, it could potentially be the start of a spiral back into debt. This time it's to invest, in a couple of months when that's nearly paid it could be something else - so you could continue the spiral and end up with more debt again. I'm sure you don't want or think this will happen, but you need to break the mindset. Unless it's in your bank you don't have it! And I really need to follow my own advice having added (ok only £50.10 but that's irrelevant) to my debt as it would be paid off last Saturday - for reasons that can't necessarily be helped, it wasn't! So moral of the story - you never know what could happen so best not chance it!

Sorry for rambling!

dalleDF

you need to break the mindset

So true! Have to accept if the cold hard cash is not there then it's not happening. I thought I would have got my head round this concept by now! Thanks again.

andyfromotley

ohhh you're solo close.

Theres no such thing as a once only investment. Others will come along to tempt you and then you will be able to do it with your own money. Think how good that will feel!

[Deleted User]

I'd pay off the debts, skip on the investment, and get things on the solid road first.

enthusiasticsaver

If you do not have the ready cash then no you should not invest particularly as it seems your emergency fund is not easily accessible either. There will always be good investment opportunities but you need to be in a better position to take advantage of them and certainly not borrow to invest.

sourcrates

Investments have a habit of going down, as well as up.
Seriously, clear your debts first, then go out to play 😉

Thrugelmir

However, I really want to invest in Neil Woodford's new investment trust before it becomes oversubscribed (which it will very quickly)

Investing a £1k is hardly likely to make you a fortune. However good the fund manager is.

redux

Don't think of it as an unmissable opportunity. There is still the chance to invest in it later, or other choices. Even though most investors will be intending to hold for a while, there will still be a market in the shares.