Shares or debt

[SC00BY]

If you had, for example �10000 of shares and �10000 of debt, is it best to sell the shares and pay off the debt. And then save the amount you were paying out on debt? ( I hope this makes sense)

Or keep the shares, pay off the debt gradually, then at the end of the deby. still have the shares?

Does anyone have an opinion. Thankyou.

[buildersmate]

This is a 'how long is a piece of string' question.
It entirely depends on the yield of the shares (dividends versus the price of the shares) compared to the cost of servicing the debt (interest charges).

[dzug]

Also whether in the long run the shares gain value

[factor-fiction]

What is the rate of interest (APR) that applies to your debt?
Unless it's close to a zero percent loan rate I would consider paying off some of the loan (provided there are no repayment penalties) , either by using savings or by selling some shares. But of course the value of shares can go up as well as down- so if you sell shares you run the risk of missing out on a big rise in share prices, or if you sell you may avoid a fall in share prices. It's your call.

[Whoever]

It partly depends on your attitude towards debt. I personally hate owing money to anybody as I dislike the feeling of obligation and the fact that the debt could be called in at any moment so it means I'm not the master of my personal financial circumstances. The interest rate on most debts is like to be far higher than the dividends you receive on your shares, especially if they are not held in an ISA and you're paying tax on this income. The value of shares is likely to be low at the moment and eventually the stock market will hopefully rise and your shares will become worth more. If you're finding it difficult to make a decision, why not compromise, sell half the shares and reduce your debt by 50%. But before you sell, check out when the next dividend payment is due as you don't want to sell a week before the next dividend is paid out!