Sunday, August 24, 2008

Do I Care More About My Cash Flows Or My Net Worth?

The interest rates on my loans float with the prime rate, however, the amount that I pay does not get adjusted. So, question of the moment, supposing the interest rate changes, how much do I care? Clearly I'm not completely indifferent about interest rate changes. For now I've gone heavy into equities and have done only the minimum for debt repayment. It's my general feeling right now that investments are going to have a greater return than debt repayment. Does this question really depend on how much free cash flow I have though? Again, it's hard to say. I've spent many hours trying to compute what would happen if I shifted more of my investments toward income again and used that money to invest. I also kind of have to reassure myself that going for net worth is the logical thing to do since I do have significant excess cash flow right now. It's a bit of a change from where I started.

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