> DEBT_VS_INVEST
Pay it off or invest?
Internet advice assumes US tax. In Ireland, fund gains are taxed at 38% — which moves the line. Here’s where it sits for your debt.
€
%
€
€
Debt payments + investing combined
Assumptions+
%
Diversified equity fund long-run, before tax. Can be negative in any given year.
THE VERDICTPROJECTION
Kill the debt.
Paying off 9.5% debt is a guaranteed, tax-free 9.5% return. In an Irish-taxed fund (35% exit tax on gains), investments need roughly 14.6% a year to match it. In this exact scenario the break-even return is 13.2%.
Net worth after 5 yearsPROJECTION
Pay debt first, then invest€20,239
Pay minimum, invest the rest€18,958
Difference: €1,281. Both strategies spend the same €600 a month for 5 years.
Pay debt first
Debt gone in28 months
Interest paid€1,781
Investments (after exit tax)€20,239
Net worth€20,239
Minimum + invest
Debt gone in59 months
Interest paid€3,820
Investments (after exit tax)€18,958
Net worth€18,958
Before either: keep an emergency fund so a surprise bill doesn’t go on a credit card. And if your employer matches pension contributions, take the full match first — an instant 100% return beats any debt rate. Exit tax modelled at 35% on gains at the end; deemed disposal (every 8 years) and fund fees are not modelled. Return is an assumption, not a forecast.
VerdictPay it off