Pay debt down or buy first apt. Building

[Neil Klinges]

So I started working for a contracting company on the road. The job is only temporary but with this job I will be able to save around 15k in like 6 to 8 months. The job could last longer but it’s not guaranteed. I was able to move out of my apartment and store the furniture I kept at my parents houses. The bills I have currently total about $638 per month. $338 of this is from my car loan. I owe about $10000 on the car loan at the moment. My question is should I just pay this off as soon as I can. Or should I save all of the money from this job and try to put it towards my first real estate investment? I will be moving back home when this contract ends. 

[Ryan Howell]

My opinion is to pay off your debt.  I personally think there is more to the equation than just comparing interest rates.  Make sure you have the cash reserves to handle emergencies (both personal and in your real estate investing).  I suggest 3-6 months for personal expenses as well as for whatever your investments will require.

I personally only take on debt if I'm leveraging an investment asset to increase my rate of return.  I'm not a fan of carrying consumer debt or car debt, because those are liabilities that are going down in value and slow me down on the path to financial freedom.

Imagine how much less stress there is when something breaks on a rental property or tenant moves out and you have plenty of savings to handle the lack of cash flow for a few months.