Becoming debt free is one of the most highly sought-after goals of any financial enthusiast and something I encourage everyone in the nurse practitioner community to do. The benefits are obvious – doesn’t it feel great to have everything paid off and not owe anything to anyone?

While this is certainly a great goal, it may not always be the most practical … especially if market conditions have created a situation where your money could be better applied elsewhere.

Since the Federal Reserve started raising the federal funds rate, lenders have doubled the interest rates they charge on nearly every type of loan – including mortgages. This means that if you bought a home or refinanced before 2021, then you might be in a unique position where you’re only paying 2 to 4% APR on your loan. That’s certainly not zero, but it’s much less than someone today would be offered for a mortgage.

Remember that when you pay any extra principal down on a mortgage, you’re essentially getting a return equal to the APR of the loan. For instance, if your mortgage is 3%, then you’re making about 3% by preparing the principal.

Compare this with having I-bonds paying 6.89% APR, CDs in the 4% range, and even high-yield savings accounts. Or, for the more risk-tolerant investor, you could potentially buy shares of discounted stocks or real estate if the housing market starts to slump. Doesn’t this seem like a better ROI for your money?

No one has control over what the markets or the economy as a whole will do tomorrow. But as savvy investors, we can minimize that risk by taking advantage of differences in rates when we see them. Before making your next investment, consider the possibilities and choose the one that will benefit you the most in the long term.