Asked by Anonymous
Personally, I would clear off the education loan first so as to reduce the amount of interest payable since all investments carry risks and the returns are not guaranteed. Clearing off the debt gives me a peace of mind too!
But of course, some would recommend investing if you can achieve higher returns than your loan's interest rate. But then again, investments returns are not guaranteed.
Rule of thumb is to invest only with money that you can afford to lose.
I assume the CPF is from your parents. Your parent can actually waive the repayment if they are at least 55years old and had set aside the basic retirement sum.
You can always give cash to your parents monthly or topup their special account (for their retirement). The monies in special account earns interest rate at 4% and your parent will receive tax relief for the amount that is topped up. Eg. If they are in the 7% tax bracket, u are effectively 'earning' 7% return on the amount that u topped up.
Settle the debt first so as to reduce the interest payable. Once your debt is cleared, you could then save more to accumulate your capital for investment or trading.
I think if you can invest at a higher return than the loan interest, then invest.