Large Transfer - Pay off debts, or keep it and invest.

[Atul S.]

Hi All, 

I am a 29 yo male currently employed in a relatively stable job ($100,000/yr). I'm not focused on saving a lot right now and basically, just put money towards my 401k (10%) and am aggressively paying down/off my student loans and car, so I'm not really contributing a ton toward savings. I'm about to receive a fairly large sum of money ($30,000) which would help immensely towards paying off debts. Here's a breakdown of my debts: 

-Car: $20,320
-Student Loans: $47,200

Here are my current savings: 

-401k: $23,000
-Savings: $6,511
-Transfer (pending): $30,000

My car is valued at around $23,350 (about a year old) and has only 3500 miles on it, so I could probably sell it. I work remotely, so I don't really drive a lot, and I could likely save up to buy a lower-priced car (if needed). I make my car payments regularly and on time and pay twice a month in an attempt to pay it off quicker! Additionally, I pay off my student loans (at the minimum amount) monthly.  That being said, my credit score isn't great and I was pretty irresponsible in my early adult years. I'm trying to build my credit score back (around a 610 right now). With that being said, I'm wondering what I should do? 

My thought process is that I can easily pay off my car, sell it and then pay off my student loans and that would essentially leave me with $7,600 left over in student loans (without cashing in my 401k) which I could pay off within a few months. My other gut instinct is telling me to invest this in savings or in a mutual fund / index fund that has an annual return and keep it stowed away. What are your thoughts here? Would love any guidance that anyone can provide! 

[Bjorn Ahlblad]

If you have any thoughts about becoming a LL or investor definitely build your credit score. There are higher yield funds available today, so that would be good for the 30k and any other money until you have enough for a downpayment and reserves.

You might think about joining a REI or LL group in your area for educating yourself and networking. All the best and welcome to BP!