Save for Index Funds or Down Pymt

[Hector Lewis]

Hello,

My wife and I are trying to decide a pathway to where we are doing good enough off of passive income so my wife can quit her job.

Would you recommend to save the money for a down payment on an investment property or put that money towards a dividend providing index fund. We can save about $1,000/mo and we already have one investment property.

Thanks,

Hector

[John W.]

Depends on your goals. What will an index fund return? 2-3% at best? You may be better off investing in something like AT&T currently forward yielding about 7.5%. Then you deal with the fluctuations of the stock price. Or do you want a hard asset that has the possibility to return 10, 15, or maybe even 20% a year or more? To be fair if you then need access to the equity it will cost you. And you have to deal with the ups and downs of property management unless you farm that out. There's no right answer. Just what's right for you, and only you can answer that. In my humble opinion, you'll probably be alright either way you go.