I'm sure this discussion has come up before however I performed a search and couldn't get any meaningful discussion.
Does anyone have a way of caluclating whether one should pay down their debt or invest?
At a glance I feel like anyone with a mortgage who is paying 7% interest should simply pay down their debt as its equivalent to an after tax return of 10-13% (depending on tax bracket, and im sure other factors etc).
I can't think of many investments which return 10-13% so therefore paying down your debt always wins?
This being said its obviously far more complicated than that due to things like capital growth and income which one can earn.
I guess an example would be an investment property which slowly appreicates in capital value as well as gradually gaining more and more income each year (increase rent)
Can someone point me in the right direction or is it really as simple as calculating your cost of debt (a) and comparing it with your investment return (b) and unless b>a you pay down debt.