Shall we pay the Debt or Invest
Currently, the society shall raise the favor question that what are you doing? How many car you have? Do you have house? During the Covid-19 pandemic, most of people would like to hold the cash and avoiding the loan because they have not known how long that economy would recover from the recession. Therefore, everyone shall skeptical about if they have one portion of funds “shall they pay the debt or invest”. Today, LSX would like to provide informative recommendations regarding the issues above that people could
utilize the fund in order to make more benefits to themselves as follow:
+ Shall pay debt:
The debt shall be paid fully if your fund is sufficient to repay back all debt in order to avoid the interest payment. If you paid debt partially and reflected it is reasonable or not especially the debt from credit card. When you received the salary, you have to pay debt first that would minimized interest before investing with the remaining money. Besides that, the debt management shall be depended on each characteristic of people, but we shall calculate the interest rate by ourselves based on method bellow:
- Compounding Interest: This means the down payment in each term that reduce actual principle and interest for instance, residents, loan of bank and financial institutions, credit card and others.
- Fixed Interest rate: The main calculation of this method shall be equipment that financial institution allowed clients to pay interest with principle in every terms; even though they pay with huge amount of each term. The interest shall be the same amount. Thus, you shall not pay whole debt in one time regarding the financial circumstance of each person.
+ Shall invest:
You have to study the type and channels of investments before investment. This would make your money get more higher benefits as bellow:
- Money deposit with bank: This is a channel that people can save money easily, secure, low risks, withdrawn based on terms, but the disadvantage of bank deposit would be low return that could not meet other perceptions of high return.
- Invest in securities trading: person who buy stock shall be the owner of company based the ratio of shareholding, receiving the high return if the company granted profit a lot and receiving the dividend payment based on the shareholders’ meeting approval on first 6-month and the end of 6-month financial statement. Moreover, the investor could get the capital gain from trading securities, and tax exemption. The drawbacks of trading securities is a high risk compared to the government bond, if you would increase debt from securities trading if you still have debt.

“The column for 10th year anniversary celebration”
(By: Public Education team, Lao Securities Exchange)