I sold a business. Do I invest or pay off debt?
Guys, I am 34 years old. I will be selling my ownership in one of my companies for $300k. With this sale, I’m losing $40k per year in salary. I’m trying to see how you would invest the $300k. Here’s my breakdown. I have 2 rental properties. I owe $64k and $86k respectively. I own a home and 2 vehicles. Those payoffs are $440k, $30k and $30k. No other notable debt exists. My question is, should I use the $300k to buy as many rental properties as I can to replace as much of the $40k as possible? Or, should I pay off as much debt as I can which will save money. Both options will increase my net worth, but both options have their pros and cons. Paying off the debt will save 6% interest while buying the condos will produce about a 10% return. Thanks everyone!
Most Popular Reply
@Joey Allison there’s no right or wrong answer really, it really depends on your lifestyle, goals and level of risk you are comfortable with. Decisions don’t always have to be based on maximizing returns. Maybe you can do both. Is it at all an option to sell one of the 30k vehicles and also pay off the other? After that maybe focusing on acquiring more cash flowing properties?
Best of luck!
- Twana Rasoul
