[Ray]

I am hoping you guys can help me pick the best decision for my financial future.

Lately, I’m struggling to figure out where I should contribute my money.

I’m 27 years old. I work in real estate, paid by commissions only and of course 1099 pay taxes in bulk each year.

I currently have about $11k liquid, and another $11k in an IRA.

I bought my house about a year ago and pay $1550 per month.

And I flipped a house a few months ago for the first time…

I decided each time I sell a house I will put a lump sum toward one of the 3 options:

1) Max out my IRA for the year, then invest any remainder towards my mortgage.

Then next year.. same thing. Until essentially the mortgage is paid off.

2) Prioritize paying off the mortgage first ($165k with 6.25% interest).. which essentially will give me a 6.25% return on my money.

3) Put money aside each check towards another flip.

Then use the proceeds for either another flip, or one of the two options above..

[Tristan]

I work with real estate professionals, oftentimes one thing they come to me with what they can do to minimize taxes because the IRA max isn’t enough.

If you aren’t concerned with that yet, then I’d say put the 7k in to your IRA, then either the mortgage or to do another flip

[Jessica]

For me think about compound interest. The sooner you put your $ in the market the better.

Although I am not in real estate and your mortgage interest isn’t super low.

[Shannon]

I’ve noticed that sometimes people choose what gives the most psychological benefit/ peace.

For some that is paying off their mortgage to be debt free! Others would disagree.

But I keep hearing paying off the mortgage vs investing as a repeated course of action due to it resulting in the mental peace and stability that comes with it, also many who come from Ramseys baby steps carry on this way as it’s included in that plan.

Market does yield higher returns, but having no house payment is a pretty big win too.

So in the end that is personal preference, depends on your goals maybe! Are you more risk adverse or striving to FI asap.

I can’t speak to the rentals.

But a recent podcast I listened to said those are an average return as well due to all the upkeep costs that come from property taxes / maintenance etc.

At least make sure you follow the 1% rule if renting out!
Personally I feel like investing is the most simple way to build the wealth.

Compound interest consistently works in your favor.

But takes possibly more time than a house flip could.

Whereas rentals involve a lot of logistics and upkeep.

Depends on if you’re passionate about doing all that too.

[Author]

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