@tonymarchese, great question to be pondering! I can see you going either way, but personally, I’d probably go the pay off the debt first and then start investing. It’s good to see that you have some savings set aside as well. $1,000 a month can make you some great progress either way.
Personally, we had over $27,000 in student loans. We ended up paying them off over a two year period by throwing everything we had at them. We knew they had to go. We were so focused on getting out of debt that building wealth wasn’t on our todo list yet. That accelerated the payoff. Also, the one thing that has helped my family succeed more financially than anything else was the fact that we focused on one thing at a time. We used to put some into retirement, some into savings, some into college funds for our children (then unborn), some towards debt, etc. But we never got the traction to move forward until we decided to focus on doing one thing at a time with ALL of our effort. By putting all of our money towards one loan at a time, we knocked it out much faster than we expected because we got excited and wanted to see it gone. We worked harder to make more money to throw at it because we were motivated. When you are intensely focused on something, you WILL make it happen!
If you invest the money, you’d be able to reap some possibly compound interest earlier, but would be leaving some risk on the table as you work through the debt. If you lose your job or something happens, you might leave yourself in a bad position if your income were to drop.
However, if you focus on paying off the student loans first, your investing slows for a little while. But, at the end of the debt, you free up even more cash each month to put towards the debt.
Plus, remember that even when you are paying off debt, you are still building wealth because you are getting rid of liabilities and freeing up cash flow.
In the end, it’s obviously going to be up to you and you have to do what you feel is right, but I think so many people overlook risk in return for reward. The more free you are from debt, the bigger your shovel becomes to build wealth!
Would love to know which way you end up going in the process!