We have $240,000 from selling our rental property and owe $140,000 on our house. Should we pay it off or invest?

Dear Dave,

We sold our rental spot recently. When we bought it, we thought it would beryllium a bully root of passive income. But owning it wasn’t passive astatine all. It sewage to nan constituent wherever nan activity and hassle became excessively much. We person $240,000 from nan sale, and we’re debt-free isolated from for our home. We beryllium $140,000 connected our house, and could salary it disconnected instantly, but portion of maine wants to put nan proceeds from nan waste of nan rental property. Is it amended to go wholly debt-free astatine this point, aliases should we put it truthful we tin person moreover much money for retirement?

Anthony

Dear Anthony,

You mean you had to actively negociate your rental property? Listen, anyone who tells you existent property is passive income is afloat of crap. It’s a earthy hold of nan garbage group spout astir really it’s okay to spell into indebtedness to bargain existent estate, because nan renter is making your payments. No, it’s your payment. And erstwhile nan renter doesn’t pay, aliases it sits empty, conjecture what? You person to salary it.

If you want passive income, bargain an S&P 500 scale fund. Set it and hide it. You won’t person to hole a leaky roof, switch worn retired appliances aliases effort to cod from deadbeat tenants. Real property is simply a awesome measurement to invest, if you do it nan correct way. I emotion it. It’s thing but passive, though.

Let maine inquire you this astir your situation. If you had a paid-for house, would you get $140,000 against it to invest? Of people not. It’s beautiful overmuch nan aforesaid thing, and that would beryllium dumb. Pay disconnected your home, brother. Just salary it off. You’ll beryllium debt-free, and you’ll still person six figures to invest.

I emotion that you’re reasoning astir nan future, Anthony. And I cognize nan compound liking you’re visualizing down nan roadworthy is really tempting. Your compound liking calculator will show you immoderate astonishing things, but what it’s leaving retired is risk. It besides can’t show you astir nan carefree measurement you’ll walk, and really it’ll consciousness for illustration a immense weight has been lifted disconnected your shoulders erstwhile you don’t person a location payment.

You’ll beryllium capable to unrecorded life connected your terms, and each nan decisions you make will travel from a wholly different constituent of view—one that isn’t burdened by nan weight of bankers hovering around, waiting for you to springiness them what’s theirs.

The borrower is ever a enslaved to nan lender. Think astir it. Only 1 accusation of slavery is mathematical. All nan remainder are spiritual, physical, relational, affectional and mental. Being debt-free changes your life from nan inside-out. Not only does it make your life better, but it allows you to springiness pinch incredibly generosity, and beryllium an supplier for affirmative alteration successful nan lives of others.

Pay disconnected nan house!