Should I use my non-tax advantaged investment account to pay off debt?
If what you are paying in interest on the debt is a higher percentage than what your investments are returning, the best investment you can make is to pay off the debt. If you're lucky enough to be paying historically low rates (as I am on my mortgage) and getting good returns on the investments so the latter is the higher percentage,  the balance goes the other way and you'd want to continue paying off the debt relatively slowly -- essentially treating it as a leveraged investment.  If you aren't sure, paying off the debt should probably be the default prefrence. You could pay off a portion of the debt and your minimum payments should also go down proportionately.  Your investment managers may be able to continue making returns in the markets in a sideways and a bear market. So you have 24k contributing to your net worth, and ~50k giving you a negative net worth. At best, you can bring this down to a negative 25k net worth, or you can start and keep using some of the gains from your investment account to supplement your credit payments (along with your income). This is based on chance that your investment managers can continue making gains, compared to paying down 24k and having possibly zero liquid savings now, but having more of your salary to start saving and make the lowered minimum payments, assuming you don't borrow more. Those are the options I've thought of, I don't see either option being necessarily quicker than the other. Paying off debts will reduce your monthly obligation to creditors (less risk) and also remove the possibility of foreclosure / repossession / lawsuit if you ever lost access to income (less risk).  Risk is an important part of the equation that can get overlooked.  It sounds like pulling that money out of the market will reduce your yearly tax bill as well.
This question is indeed rather complicated. Let's simplify it a little bit. Paying down your mortgage makes sense if your expected return in the rest of your portfolio is less than the cost of the mortgage. In many cases, people may also decide to pay down their mortgage because they are risk-averse and do not like carrying debt. There's no tax benefit to doing so, though; Canada doesn't generally allow you to write off mortgage interest, unlike the U.S. As to keeping money in the corporation or not, I'm not going to address that. I don't have a firm enough understanding of corporate taxation. Canadian Couch Potato advises treating all of your investment assets as one large portfolio. That is what you are trying to do here. However, let's consider a different approach. If you do not have enough money to max out your RRSP or TFSA, you may choose to keep your TFSA for an emergency fund, where the money is kept highly liquid. Keep your cash in an interest-bearing TFSA, or perhaps invest it in the money market, inside your TFSA. Then, use your RRSP for the rest of your investment money, split according to your investment goals. This is not the most tax-efficient approach, but it is nice and simple. But you are looking for the most tax-efficient approach. So, let's assume you have enough to more than max out your TFSA and RRSP contributions, and all of your investments are going toward your retirement, which is at least a decade away. Because you are not taxed on your investment income from RRSPs (until you withdraw the money) or TFSA, it makes sense to hold the least tax-efficient investments there. Tax-advantaged investments such as Canadian equities should be held in your investment accounts outside of TFSA and RRSPs. Again, the Canadian Couch Potato has a great article on where to put your investment assets. That article covers interest, dividends, foreign dividends, and capital gains, as well as RRSPs, RESPs, and TFSAs. That article recommends holding Canadian equities in a taxable account, REITs in a tax-sheltered account (TFSA or RRSP), bonds, GICs, and money-market funds in a tax-sheltered account (as these count as interest). The article goes into rather more detail than this, and is worth checking out. It mentions the 15% withholding tax on US-listed ETFs, for example. In addition to that website, I recommend the following three books: The above three resources strongly advocate passive indexed investments, which I like but not everyone agrees with. All three specifically discuss tax implications, which is why I include them here. First, you need to understand the difference in discussing types of investments and types of accounts. Certificate of Deposits (CDs), money market accounts, mutual funds, and stocks are all examples of types of investments. 401(k), IRA, Roth IRA, and taxable accounts are all examples of types of accounts. In general, those are separate decisions to make.  You can invest in any type of investment inside any type of account.  So your question really has two different parts:   Tax-advantaged retirement accounts vs. Standard taxable accounts FDIC-insured CDs vs. at-risk investments (such as stock mutual funds) Retirement accounts are special accounts allowed by the federal government that allow you to delay (or, in some cases, completely avoid) paying taxes on your investment.  The trade-off for these accounts is that, in general, you cannot access any of the money that you put into these accounts until you get to retirement age without paying a steep penalty.  These accounts exist to encourage citizens to save for their own retirement.  Examples of retirement accounts include 401(k) and IRAs. Standard taxable accounts have no tax advantages, but no restrictions, either.  You can put money in and take money out whenever you like.  However, anything that your investment earns is taxable each year. Inside any of these accounts, you can invest in FDIC-insured bank accounts, such as savings accounts or CDs, or you can invest in any number of non-insured investments, including money market accounts, bonds, mutual funds, stocks, precious metals, etc. Something you need to understand about investing in general is that your potential returns are directly related to the amount of risk that you take on.  Investing in an insured investment, which is guaranteed by the government to never lose its value, will result in the lowest potential investment returns that you can get. Interest-bearing savings accounts are currently paying less than 1% interest.  A CD will get you a slightly higher interest rate in exchange for you agreeing not to withdraw your money for a period of time. However, it takes a long time for your investments to grow with these investments.  If you are earning 1%, it takes 72 years for your investment to double. If you are willing to take some risk, you can earn much more with your investments.  Bonds are often considered quite safe; with a bond, you loan money to a government or corporation, and they pay you back with interest.  The risk comes from the possibility that the government or corporation won't pay you back, so it is important to choose a bond from an entity that you trust. Stocks are shares in for-profit companies.  Your potential investment gain is unlimited, but it is risky, as stocks can go down in value, and companies can close.  However, it is important to note that if you take the largest 500 stocks together (S&P 500), the average value has consistently gone up over the long term.  In the last 35 years, this average value has gone up about 11%.  At this rate, your investment would double in less than 7 years. To avoid the risk of picking a losing stock, you can invest in a mutual fund, which is a collection of stocks, bonds, or other investments.  The idea is that you can, with one investment, invest in many stocks, essentially earning the average performance of all the stocks.  There is still risk, as the market can be down as a whole, but you are insulated from any one stock being bad because you are diversified. If you are investing for something in the long-term future, such as retirement, stock mutual funds provide a good rate of return at an acceptably-low level of risk, in my opinion. Overall, I strongly recommend cashing out your savings and becoming debt free today, and then never borrowing again except for a house. Advantages: Disadvantages: My wife and I paid of all of my grad school debt last year, and we’re paying off all of her grad school debt this year.  To pay that aggressively, we’ve had to learn to live on a much tighter budget.  But when we’re done, if we simply invest what we have been paying toward debt into the stock market, our nest egg will compound to over $10 million by the time we retire.  According to Dave Ramsey, when the Forbes 400 were polled, 75% of them cited becoming and staying debt-free as the single best way to build wealth: http://www.daveramsey.com/article/three-steps-to-wealth-building-for-young-adults/lifeandmoney_college/text4/ Set up budget categories.  Earmark your income as it is paid, for your budget categories.  Pay your bills and expenses.  For debts, pay the minimum on everything.  There will be an amount left once everything is budgeted.  That's the 'extra'.  Then focus on, in order of priority, the following: So, when your emergency fund is up to an appropriate level (3-6 months of living expenses as a rule of thumb, adjusted according to your comfort level).   Once you have your emergency fund started, budget at least enough toward your 401k to capture any matching offered by your employer. Then use the snowball plan to pay off your debts.  (From what your post says, this does not apply to you, but you may have some small credit card debts taht were not discussed).  Earmark the 'extra' for the smallest debt first.  When that debt is paid, the 'extra' grows by the minimum payment of the smallest.  Thus the snowball grows as you pay off debts. Once the debts are gone, reward yourself, within reason (and without going into debt). Now shift your extra into fully funding your retirement savings.  Consult a financial advisor to help you plan how to distribute your retirement savings across the available retirement savings types.  They can explain why it's good to have some of your retirement savings funded from after tax income.  They can help you find the balance between pre- and post-tax funded accounts.   Eventually, you may come to the point where you're putting the max allowed into your tax advantaged retirement accounts.  At your age, this is a significant achievement.  Anything left over after retirement savings is funded can be used for whatever you want.  If you choose wealth building, it can lead to financial independence. The first two should be a one time thing.  You can/should do more than one at a time.  The fourth one is optional, and should not be considered until 1 and 2 are completed, and 3 is maxed out. What you achieve is up to you.  Look up FIRE, or Financially independent, retire early.  There are groups of folks striving for this.  They share advice on frugal living and wealth building strategies.  The goal is to save enough capital to live off the passive income of interest and dividends.  Most of them seem to have pre-50 target ages.  At your age and income, you could hit a pre-40 goal.  But it takes commitment and a certain type of personality.  Not for me but it might be for you. "One can generalize on Traditional vs Roth flavors of accounts, I suggest Roth for 15% money and going pretax to avoid 25% tax.  If the student loan is much over 4%, it may make sense to put it right after emergency fund.  For emergency fund priority - I'm assuming EF really requires 2 phases, the $2500 broken transmission/root canal bill, and the lose your job, or need a new roof level bills. I'm in favor of doing what let's you sleep well. I'm also quick to point out that if you owe $2500 at 18%, yet have $2500 in your emergency fund, you're really throwing away $450 in interest each year. There's an ongoing debate of ""credit card as emergency fund."" No, I don't claim that your cards should be considered an emergency fund, per se, but I would prioritize knocking off the 18% debt as a high priority. Once that crazy interest debt is gone, fund the ER, and find a balance for savings and the next level ER, the 6-9mo of expenses one. One can choose to fund a Roth IRA, but keep the asset out of retirement calculations. It's simply an emergency account returning tax free interest, and if never used, it eventually is retirement money. A Roth permits withdrawal of deposited funds with no tax or penalty, just tracking it each year. This actually rubs some people the wrong way as it sounds like tapping your retirement account for emergencies. For my purpose, it's a tax free emergency fund. Not retirement, unless and until you are saving so much in the 401(k) you need more tax favored retirement money. I wrote an article some time ago, the Roth Emergency Fund which went into a bit more detail.  Last - keep in mind, this is my opinion. I can intelligently argue my case, but at some point, it's up to the individual to do what feels right. Paying 18% debt off a bit slower, say 4 years instead of 3, in favor of funding the matched 401(k), to me, you run the numbers, watch the 401(k) balance grow by 2X your pretax deposits, and see that in year 3, your retirement account is jump-started and far, far more than your remaining 18% cards. Those who feel the opposite and wish to be debt free first are going to do what they want. And the truth is, if this lets you sleep better at night, I'm in favor of it." "You hit on the biggest advantage of keeping things out of tax-advantaged accounts: Easier access to the money. It hurts to take money out of a 401(k) early.  It may hurt more in the future.  (Do you think the reason the 10% penalty is there in order to protect you from yourself?)  It also may be converted into a vehicle besides what you have it in now, due to a ""national liquidity crisis."" You have plenty in tax-advantaged accounts, IMO." "The likely reason the mortgage is ""tricky to get"" is the adviser is probably recommending an interest-only mortgage in which there is no repayment of principle before maturity.  That would allow you to deduct the amount of the interest expense from your taxable income.  Your investment grows compound tax deferred and the principal invested (the mortgage balance) is completely tax free since it never qualifies as income for tax purposes. Example ideal scenario: Refinance $100,000 on a 5/1 ARM-interest only at 3%.  Invest the $100,000 at 6%.  Each year you effectively pay taxes on only the gains greater than interest.  If you reinvest the profits it looks something like: Net Profit:    $12,309 Effective Tax Rate:  13.21%" Since you've already maxed out your 401k and your IRA, if you wanted to invest more-- then it would either be in a brokerage account or a 529 (if you have kids/ intend on going back to school). As to investing versus paying off your loans -- the interest on them are small enough that it will depend on your preference.  If you need the cash flow for investment purposes (ie if you are going to buy an investment property) then I would pay off the car loan first -- otherwise I would invest the money.   Since you've already expressed that you wouldn't be too interested in paying the mortgage off early, I've left that off the table (I would prioritize car loan over mortgage for the cash flow reason)  If you do open a brokerage account -- make sure you are minimizing your taxes by putting the 'right' type of assets in a tax advantaged account.