I came into a large amount of cash. Do i pay off debts or put the money in investments?

The part I wonder is should I pay off my mortagage...75000 at 8.25%. The interests is tax deducatble.

Provided you don't have to pay taxes on this lump sum burning a hole in your wallet, do this...

1. Pay off any unsecured debt first (student loans, credit cards). Line up the debts from smallest to largest and knock them out.
2. Pay off the car.
3. Put away an emergency fund in a savings account equal 6 months of living expenses. Include fuel costs, food, entertainment, utilities, insurance, taxes, etc. EVERYTHING you pay out in one month times six. You never know when your boss might not like you anymore or you become so ill you can't work.
4. Knock out the mortgage.
5. Talk to a financial adviser about investments with. Start with an accountant. Don't have one? Ask your bank for a referral.

Don't get so wrapped up with the tax deduction on your mortgage interest. If you have a paid for house you can still take an equal deduction on dollars given to a non-profit or charity, church. Who would you rather have the money? A bank, the IRS or a good cause? The deduction is the same. If you are debt free you can start making payments to yourself (investments) and not a bank.

I would pay off the bills first and then use whatever is left over for whatever you want to do, like investments, fun, etc.

Depends on the interest rate of the debts.

Most people use a rule of thumb of between 8-10% in yearly gains on an investment.

If the interest on your debt is less that than, then go investment.

Both. I'd use half to pay bills, and the other half I'd put into a CD or invest it in some other way.

Pay off debts-interest earned is most always less than that charged in a safe investment-safe being the key word-it ain't safe to venture capitol on a roulette wheel spin

Both, and congrats...
I'd pay off some of your bigger bills, making it easier to reach the smaller ones.....monthly.... and put the balance into an IRA. and be sure to check them out good.....
I personally went thru one which uses the letters LLC. in their name.....they pay better dividends...and the interest is usually greater on your money.
Good Luck, and Congrats!!!

pay your debts first as your interest there is probably too high. But, be sure and pay your taxes "first" on the money you came into or you will get a surprise at the end of the year.

Definitely pay off mortgage as (depending on your marginal tax rate) you would have to earn something like 15% interest in an investment to be in the same position.

pay off debts first. there are hardly any if there are any investments that could pay you more than you are losing on any kind of debt

A lot of things you did not list play into whats best for you. How much, your age, your income,amount of debt,current savings and more. You should consult a good investment adviser and you are wise to research your options first. Call and check out the McGowan Group in Dallas at Crescent Court Location they have been very helpful in answering questions and advising, Or chose one you might know, but talk to them and check out by asking for references of satisfied clients.
Hope this helps

as time goes along you pay less interest each year on your mortgage so less of a tax deduction

as time goes along the dollar buys less and less, so in effect you would be paying back a loan with cheaper dollars

do you think you can earn higher rate of return (after tax) than your mortgage interest rate? That sound like a high rate,, not good credit?

no real opinion here, just thoughts