Streamlining retiring from day job at 40.

[Andrew D.]

I've been investing in the Cedar Rapids, IA area for about 8 years now but only really stepped up my game 4 years ago.  After the addition of a child to our family during an almost year layoff I realized I needed to kick start my investing.  My wife read me Rich Dad Poor Dad while I drove us on vacation one year and my plan began to take shape.

These last 4 years I've been working full time days and then spending nights and weekends buying, rehabbing, and renting out houses.  I'm pleased to say we just put our 20th one under contract.  My plan has always been buy and hold but I have sold several between tenancies.

Now that I've hit 20 SFH I'm starting to wonder where to go with my investing next. Part of me wants to take a well deserved rest and get all the rehabs done, get the houses rented and then just cash flow on the side. Then sometimes I feel like I should continue to buy as long as there are deals present.

Sunday mornings I usually wake early and like to watch Dave Ramseys podcasts on Youtube.  I hear him talking about the debt snowball and how he usually recommends people pay off there smallest debts first then use that extra money to pay the next off and on and on.  While I agree that works with some I'm looking at a different approach.  If I am working full time and have all the houses rented, I'm planning on using 70 percent of rent profits on mortgage principal reduction on one single property every month.  The other 30 percent would be for an emergency fund.  So the newest loan would have the excess money on it the first month, then I would just go down the line every month paying the excess off only one mortgage each month.  That way by the time I'm ready to retire in 6 years all of the loans should be quite lean with most of the payments going to principal each month.

It makes more sense to me to do it this way but I know everyone has different opinions.  Does this plan make any sense?

[David Dachtera]

@Andrew D.,

Something to consider about Cramer, Dave Ramsey, Suze Orman, etc.:

They are speaking to "consumers" more than to entrepreneurs. That is, people who only understand working for money, not necessarily having money work for them.

My financial mentors teach putting equity to work producing income (arbitrage) instead of letting "dead" equity just sit and ebb/flow with the economic tide.

Just wanted to present another viewpoint.