How This Or That Works

Imagine you receive unexpected extra money—a bonus, inheritance, or even a lottery win. What’s the best way to use it? Should you pay off debt, invest it, or keep it in cash? This Or That is a simple online tool designed to help you compare these options and make informed decisions.

What’s a Windfall?

A windfall is extra money you didn’t plan for. It could come from:

  • A work bonus.
  • An inheritance.
  • Selling valuable assets.
  • A gift or prize.

This Or That helps you decide how to maximize the benefits of your windfall by comparing different financial strategies.

How It Works

Step 1: Choose Your Options

Start by selecting two financial strategies to compare:

  • Pay Off Debt: Reduce what you owe and save on interest.
  • Invest: Grow your money through stocks, bonds, or other assets.
  • Hold Cash: Keep the funds readily available for emergencies or future needs.

Step 2: Input Your Details

If you choose Pay Off Debt, provide specific information about your debts:

  • The total amount owed.
  • The interest rate (e.g., 5%).
  • Monthly payment amount.
  • Remaining loan term.

For all options, enter the total amount of your windfall—the money you have available to use.

Step 3: Press Calculate

Once your details are entered, click the Calculate button. The tool evaluates your choices and provides a detailed breakdown of potential outcomes.

What You’ll See

The results include:

  • Debt Payoff Analysis: If paying off debt is selected, it shows how much interest you save and how quickly your debts are eliminated.
  • Investment Projection: If investing is chosen, it estimates potential returns based on average market performance.
  • Cash Holding Benefits: If holding cash is selected, it highlights liquidity advantages and safety for emergencies.

The tool compares both options side-by-side, helping you visualize which strategy aligns best with your financial goals.

Why Use This Or That?

Here’s why this tool is invaluable:

  • Simplifies Decision-Making: Compare complex financial strategies in seconds.
  • Saves Money: Understand how paying off debt can reduce interest costs.
  • Boosts Growth: Evaluate investment returns for long-term wealth creation.
  • Provides Flexibility: Assess the benefits of keeping cash on hand.

Example Scenario

Let’s say you have $10,000 from a bonus. You’re deciding between:

  1. Paying off a credit card debt with $7,000 balance at 18% interest.
  2. Investing in a diversified portfolio with an expected annual return of 7%.

After entering your details into This Or That:

  • The tool shows that paying off the credit card saves $1,260 in annual interest.
  • It also projects potential investment growth to $14,025 over five years if invested, but that's not guaranteed.

With this information, you can weigh immediate savings against long-term growth.

Important Notes

This Or That is designed for educational purposes only. While it provides valuable insights, it’s not a substitute for professional financial advice. Always consult with a certified financial planner before making major decisions.