With the 150K I have should I pay off my car, buy a house or invest

#1

I have 2 rental properties , 1 is paid off and the other I owe 70k
I have a car that I owe $51,570 on
I have 150k cash at the moment but have another 100k coming in 6 months

Thats the only debt I have (I currently lease). I plan to buy a house in the next 6 months
Should I pay off my car and the 70k from rental property or invest with the 150K ?

#2

Welcome @CIMa!

Congrats on having a bunch of money, and a paid off rental property! That’s great! Take a look at these phases of investing. That’s how I would prioritize your money:

So working through that list:

  1. Absolutely pay off the car today. (If it was already paid off, would you drive it to the bank use it as collateral to take out a $50K loan? I bet not.)
  2. Make sure you’re investing enough for a healthy retirement… you didn’t mention that here, but do you have other money invested outside of your rentals? Two paid for rentals alone might do the trick!
  3. Set aside enough cash for the house down payment.
  4. If you have more leftover after that, then you’re on phase 6! Either knock out that rental property mortgage (tons of free cash flow is great!) or you can invest more. If you have room left in any tax advantaged accounts (IRA, 401k, SEP, etc) I’d probably max those out before going after the mortgages. Here is a conversation about choosing between investing more and paying off a mortgage.
#3

A post was split to a new topic: How to build credit without a car payment?

#4

Ok perfect! I will pay off the car right away.
I do have Life insurance , but after hearing you speak, you said Life Insurance is not the way to go. I paid the full year and I got LI on my ex husband as well… I will need to figure out a way to get my money out. I hope I can.

#5

For the life insurance, a couple questions:

  • Does anyone besides you depend on your income to eat?
  • Is it “term” life insurance (likely premium ~$50/month) or some sort of permanent life insurance (Whole/Universal/Universal Indexed, etc)?
#6

Yes , I have 3 boys .
Its permanent life insurance . The one I got on my ex is Term

#7

Ah got it.

Yeah, I’d go buy some term on yourself, with your kids as your beneficiary. Enough to cover their expenses through adulthood. Then cancel your permanent insurance. Whatever cash value is there you drain (unfortunately probably a lot less than you put into it… that’s why we don’t invest in insurance). Then take that money, and the difference in the premiums and invest it! :slight_smile: