#188 How our net worth is more than our financial capital but includes our lifetime earning capacity or human capital. What role does debt play in investing in human capital and how our human capital impacts how we allocate our financial investments. Why stocks aren't less risky in the long-term. How to invest a lump sum payment and how I recently did so in today's market environment. More information, including show notes, can be found here. Episode SummaryAt some point in our lives, we all have to deal with the issue of debt. It’s a specter that hangs over our heads and gives us an uneasy feeling until it is gone. Debt has a cost, naturally so because it demands interest all the time. A question that comes up often is whether or not it is better to pay off debt immediately, primarily because it IS debt, or if a better return can be achieved, should available money be placed into investments instead? You could run the numbers and figure out what looks best on paper and go with that. But the answer is honestly not that simple. This episode is designed to walk you through many of the issues that should be considered when answering the question.If it costs you less numerically to pay interest on loans than you could make on investments, you should invest instead of paying off debt, right? Maybe it’s not that simpleLet’s do the math. If you are paying 5% for your home mortgage and have a lump sum of cash available to pay it off, but you also have the opportunity to lend the money to a real estate crowdfunding platform with a guaranteed return of 9%, isn’t it true that you would make 4% more by investing in the crowdfunding platform than you would if you paid off the mortgage? Yes, that’s what the numbers say, but there’s more to be considered. You want to think about things like human capital, the nature of the debt, and the mental cost you bear for having the debt hanging over you.Most people should try to do both: invest and pay off debt. Here’s why-When it comes to the choice between paying off debt with available funds or investing those funds elsewhere, there is no cut-and-dried answer that fits everyone. But after doing his research in thinking through the issue, David feels that most people should try to do both. While there is a psychological benefit to paying off debt, there is also the knowledge and discipline that comes from investing.In This Episode You’ll Learn[0:46] Welcome to the show – and could you help spread the word?[1:55] Should you pay off student loans first or put your cash into investments?[4:20] We’ve got to consider the cost of developing “human capital”[9:40] What is debt and how does short-term VS long-term debt apply[12:45] How do human capital issues impact how we invest?[16:13] Why most people should try to do both: invest AND pay off debt[22:50] Should a lump sum be invested all at once or dollar cost average it?