Cash Out My Stock?

Dear Gil

I have almost $10,000 in Blue chip stock. I also have some heavy credit card debt. Should I cash out the stock and payoff credit cards or should I just keep the stock and let it sit? Cashing out the stock would save me over $200 a month in credit card bills and also enable me to payoff some other debts. But I also know if I hold the stock for another 10+ years, it could possible split and I could maybe even double my money over time. Decisions, decisons, what do you think?

Ron

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Dear Ron,

Congratulations for  being prudent enough to even start investing.  I am assuming that the stocks you have $10,000 invested in, are not being held in an IRA or is not something that is set-up through your job's 401K.

I think the question you ask is great.  The first question I would usually ask is, what rate your stock is presently growing by ,and what is your credit card rate's annual interest now.  If the rate of your stock is growing faster than your credit card interest than keep things as they are until your credit card is paid down.

However, I am somewhat concerned with the performance of your blue chip stock lately, and blue chip stock's vulnerability.  Therefore, my advice to you is to sell the stock and pay off your credit card bills.  After you do this, you can then use the money you were paying toward your credit card balance to fund a traditional or Roth IRA to its maximumyearly  amounts as well as other safe mutual funds.

I commend you for being interactive on your financial journey and I wish you a prosperous new year!

Gil