Well, it's 2023 and we are coming out of yet another economic recession caused by a once-in-a-lifetime event. With all the uncertainty in the market, you are probably wondering where you should put your money to get the best return on investment. Today, I'm going to share with you a way to get a guaranteed return on your money that is more than any savings account, treasury bill, and most stocks. Don't worry, I won't keep you waiting. The best return on your money in 2023 is paying off your credit card debt. Let me show you the numbers:

Investment returns are usually calculated and reported on an annualized percentage basis. This means that a bank account that will pay me 3% on my $100 deposit will give me $3 over the course of one year. As of early 2023, here are some rough estimates of returns from different investment vehicles:

High yield savings account: 3%
Treasury bond: 4.5%
S&P index over the last 30 years annualized: 10%

What many people don't realize is that interest on debt works very similarly to the above investments, except with negative returns. This means that paying off that will result in an instant return in the amount of interest payments forgone by paying down the debt early. Here are some examples of debt interest rates as of early 2023:

Home mortgage rates: 6%
Car loan rates: 7%-13%
Credit card interest rates: 20%+ (without any special promotions)

After properly securing your emergency fund and taking care of your regular expenses and minimum payments, the best return on your money can be determined by looking at the expected percentage return. Of all the possibilities I've listed above, regular credit card debt is far and away the most expensive interest that many people are dealing with. At more than 20%, this interest far outweighs any investment returns that a normal person can expect. This means that credit card debt (if you have any) is the best investment you can make. The best part is that this is a certain return! The bank can change the interest rate on your high yield savings account and the market will not always reflect the average return in a given year, but when paying down debt at a fixed rate, you know exactly what you're getting! For the sake of example, let’s say you have an extra $1,000 and the following investment and debt options:

Mortgage Debt @ 6% Interest
High Yield Savings Account @ 3% Interest
1-year treasury bond @ 4.5% interest
S&P 500 Index Fund that is expected to return 8% annually
Car loan @ 7% Interest
Credit Card Debt @ 20% Interest

Here’s how they would return:

As you can see, the best return on your money is paying down that credit card debt! So, if you have any credit card debt and have the extra cash, make the best investment possible and pay it down!

The Best Investment of 2023 by the Numbers