401k and rental property.. significant other Woes

[Brandon Duff]

Hello, Anyone else have a problem trying to talk their significant other into investing? She is already doing it.. Through her 401(k) She contributes around 800 monthly with a 100% match up to 4% of her income 77k $1200 goes into student loans.. For her double masters for a private colleges etc $500 a month car She says a rental property could screw up our future. She doesn't give me any reason.. I have no debt, I own my own fitness company and don't have the privilege of a 401k I want to invest in a small rental property and buy maybe 1-2 a year and move up to bigger properties or more frequently. I make around 100k No debt No IRA or 401k How can I talk her into a property and/or compare rental property vs her 401k. Thanks

[Karyn T.]

BTW, you CAN have your own 401k...a self directed solo 401K based on the business you currently own.  The IRS laws actually work so that you can invest more into it than a typical employer-based program.  You are considered the trustee to the plan (instead of an employee).

I have w2 income, so I have a typical 401k (and a 457b) through my current employer...but I also have an LLC that has a self-directed 401k. The really nice thing about the SD solo 401k, is that not only can you protect some of your income from taxes (something you both should be doing that close to the 200K mark...), but you can INVEST that 401k just about any darn way you want....including into real estate.  I have mine working with some of the crowd-funding realty partnerships featured here on BP, and I'm probably going to pick up a couple of small buy & holds in the next few months.  

There are rules, of course, with the solo 401k, but honestly, they don't seem that complicated or restrictive to me (basically, the biggest deal seems to be not buying anything that directly benefits YOU...ie: if you buy a vacation rental, the proceeds go back to the 401k, and YOU can not vacation there...stuff like that).

I found the company to create my solo 401k here on BP as well...in case you wanted to do a search, ahem.

PS- try not to fret too much about the car(s).  Some of us are car people.  Some people spend money on their kids, vacations, 2nd homes, shoe habits...whatever.  Cars are readily visible and are always immediately attacked as "wastes" of money (while the shoe hoarders say nothing about their overflowing closets.  I have girlfriends with shoes and purses that can pay my car payments...).  I agree they definitely are depreciating "assets" but if your car brings you joy....don't stress about the naysayers.  Just come up with a way to offset the payment.  Just like with anything else, the key to savings is increasing income, decreasing expenses, or both. 

Signed, 

Fellow expensive car driver ;)