Multiple cash flow streams

[Bryan Clement]

Hey, so my wife and I are having a discussion about what is more important. We are swimming in debt, but we are swimming quite well. I want to build up multiple cash flow streams by sending a lot of money to investment accounts. My wife, on the other hand, really wants to pay off our mounds of debt. (Mostly car loans, 3 year terms left, and a 4 year home improvement loan). Who is right? We are at the point now where if we just made the payments we'd be debt free besides the mortgage in three years anyway. Would it be smarter at this time to bulldoze funds into investing in stocks or real estate? Or better to pay the loans off? Low interest rates, between 4 and 6%. Any advice would be helpful!

[Brian Adzadi]

@Bryan Clement

This is where Dave Ramsey's wisdom of, "Your income is the best vehicle for wealth building" and debt will only slow you down or hinder you from building said wealth. Stocks can go up and down in value and with real estate you are always putting money into it; whether it is to repairs or maintenance.

If you work to become debt free and then start to invest that free money is where you will truly succeed in wealth building.

I can use my own personal life to make an example. I have a personal loan I am paying $215 and a pension loan that I am paying $255 every 2 weeks. Now per month, that is $940 a month total that I am paying towards debt. How amazing would it be if I no longer have those debts over my head? Pretty stinking amazing I would say. Multiply that savings by 12 months and I would be earning $11,280 a year. That is half of some people's yearly salary.

So if I were you, I will hustle hard to become debt free as soon as possible then wait at  least a year to recoup those savings then start to dabble in investing.

So your wife is right. As always. LOL.