PostHeaderIcon an extra 30k, but rental property or other investment?


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i will be coming into some money and after paying off some secured debt (unsecured debt in consolidation already), i will have about 30k left. what to do, what to do. locally there are a lot of inexpensive homes, great rental potential. not sure about the headache of being a landlord. savings offer no earning potential. i want to be able to make money with this money and put dividends in retirement account. suggestions?
i do need to replentish the “security net” fund after using it while unemployed and fighting legal battle regaring child custody issues (which i won but with huge legal fees). i do not want to just put dividends in retirement, but whatever is earned i want to put that in retirement as well. taking care of all my secured (mortgage not included) and unsecured debt would use all of the funds with some debt still there. i just feel like i would use it all up and have nothing to show for it, except a few statements with a zero balance. is that the wrong approach?

2 Responses to “an extra 30k, but rental property or other investment?”

  • mister ed says:

    well just off the top i would wager you do not have a rainy day fund — i would put 6 months salary away laddered in cds — i would also put 5k in a roth ira for this tax year 2007- and 5k in roth ira for 2008!!!

  • Joe says:

    It is hard to give good advice without complete knowledge of your circumstances. I am not sure what the interest rate is on your unsecured debt, but it is probably quite high. I suspect the best investment you can make is paying down your unsecured debt as much as possible. This will save you a lot of money in interest you don’t have to pay. Most people can get their greatest return on investment by paying down unsecured debt. I doubt you will make as great a percentage return on real estate as you will make on paying down debt.

    You say your unsecured debt is in consolidation. I don’t see why this means you don’t want to pay it off. It is still probably at a higher rate than your secured debt, so I would pay it off first.

    Possibly there is something you are not explaining clearly, but that is how I see it from what you have described so far.

    Putting money into a retirement account is an idea. But why put the dividends in only? Put the maximum you can into the retirement account and let the dividends stay in. That way the dividends grow tax-free.

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