Changing Plans

homeHappy new year!  A new year brings a new financial plan.  If you’ve followed from our earlier post, you’ll know that initially we planned to pay off all non-mortgage debts before saving and investing. Well, we’ve decided to throw that idea out of the window.

I was able to pay off my student loans in full in December by using money from a year-end bonus and by juggling some of our other cash accounts.  This leaves us with our auto loan (2.99% APR) and home equity loan (3.99% APR).

Initially I was quite adamant about wanting to pay off these loans.  However, after researching and listening to podcasts such as Radical Personal Finance and Afford Anything we’ve decided to continue paying those loans since they have relatively low rates.  The remaining money we are able to save will be used for investments, and in particular to finance a new house.

We work 10 to 12 miles from our home. This equates to a 20-40 minute commute by car and a 70-90 minute commute by bike or bus. As we feel this time spent is a drain on both are available time and energy, we’ve decided to move a bit closer to work. Additionally, we intend to purchase a duplex as our primary residence so we can rent out the other unit. Eventually, when we move elsewhere and stop working full-time, the rental property will be used as additional monthly income.

Hopefully we’ll be able to save enough and/or get enough from selling our current home to make it feasible later this year. We’ve been doing lots of research into investment properties, particularly as it relates to financial independence.  Even so it definitely seems daunting and we have a lot of work ahead.

Here are some resources we’ve found that are quite useful:

https://radicalpersonalfinance.com/early-retirement-faqs-should-i-pay-off-debt-first-or-should-i-invest-an-interview-with-joe-aka-arebelspy-rpf0095/

https://radicalpersonalfinance.com/78/

http://podcast.affordanything.com/episode-4-beginner-guide-real-estate-investing/

Bigger pockets

In the meantime, it’s back to work!