What is Risk Worth to You?

[Ethan Peyton]

So I have a choice to make. The two options are very different, but can both be quantified, so they may be comparable.

1. Pay off my car
I owe $7,085 on my car, and monthly payments are $236.
That would make the cash on cash return 40%.

2. Purchase a duplex
I am looking at a few duplexes around $100,000.
My down payment would be about $4,500 (FHA).
Rents at $100 per door would make the return 53%
I would also be living in one of the rooms in the plex.

So the question is, obviously the return rate of the duplex is higher than the car, but there is a huge amount of risk difference.

What would you do in this situation?

(Dave Ramsey vs Robert Kiyosaki death match :) )