re: Dave Ramsey's advice to pay off a car loan, rather than invest

quote:

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You also are assuming that in every case the lowest balance also does not have the highest interest rate.

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It is irrelevant to the debt snowball. The point isn't to min/max - the point is momentum. The smallest balance should be the easiest to retire - whether the rate is really high or really low.

Focus on the target, eliminate the target and move on. Eliminate the smallest balance, then focus on the "new" smallest balance. While the rate technically will make a difference, it will probably be negligible in the context of the snowball.

And, again, it will work for 90%+ of Americans with consumer debt. It will work for those folks every time.