Hi, my name is Nate and I am 28 years old. I currently have a great paying job that pays between 100k-150k dependent on overtime and have saved about 500k . Roughly 200k in a Roth 401k/IRA and 300k in savings account. I do have a mortgage 175K and no other debt.
I could be FI in 5-10 years. Should I keep waiting for the right property or put my money to work right now and just let it ride in an index fund.
Thank you for reading and your thoughts!
As the poll is clearly showing... this forum is mostly comprised of fairly conservative/risk-adverse investors and the vast majority are not huge fans of real estate (and also not planning to retire before their 50's).
You are clearly asking how to get to RE on a much faster track!
I agree with HNLBill's statement above that "all of the above" is the best answer, but you've already started saving in the other areas (and still have a few more years to do so), so why not use the high paying job to help you leverage money right now while you have it?
If you want to retire in your 30s (good for you, I highly recommend it!!), I would suggest downsizing and living a bit lean now so that you can ensure your ability to live large after RE when the passive income starts rolling in from your real estate investment(s).
We bought all of our investment properties over about a 6yr timespan, and it all started with a HELOC on our primary home and using appreciation from each investment property to fund a down payment on the next one.
Granted, that was a different time with lower down payments, which helped us achieve such a fast curve - but leverage is still a very powerful thing (and we also didn't have the advantage of the savings you've already collected!).
If you're being swayed by the poll... don't forget that IF you decided to take $100k of your savings (or salary) and:
- Put that money into the funds, you'll be making a return on $100k investment.
- Put that same money into a 25% down payment on a property... you're suddenly making similar returns on a half million dollar investment (and one that your tenants are going to payoff for you over time).
The passive income is the real reward though given your aggressive RE goals... as you won't want to touch any cash from those funds for a few decades, but each year as rents increase your income from the property grows (independent of age, employment, location, etc).