170: Finance Friday: Trading Debt for Cash Flow and Liquidity with Teacher Erik

Erik and his wife have three big debts to tackle: their mortgage on their primary residence, their mortgage on their rental property, and a HELOC (home equity line of credit) taken out as the down payment for their rental property . So, which debt should they tackle first? As two school teachers in New Jersey, Erik and his Wife made smart moves earlier this year by closing on a rental property, in order to have another stream of income coming in. They already have well paying jobs, pension plans, IRA accounts , and other ways of setting themselves up for the future, but how can they streamline their debt payoffs and maximize their cash? First, Mindy and Scott walk through budgeting , and put an emphasis on why you should separate out your business expenses and personal expenses , and make sure they don’t intertwine. Then they go on to tailor a plan of action for Erik and his wife, giving some great examples of leveraging low-interest debt in order to pay off higher interest debt and fill emergency funds . Whether it’s personal or business debt you’d like to tackle, this is a great episode going through the pros and cons of paying off debt quicker! In This Episode We Cover Why rental property owners should always have a strong safety reserve of cash When prepaying loans may be a good or bad idea How to not over-categorize your budgets and expense tracking Pros and cons of using a HELOC to finance a down payment 30 year mortgages vs. 15 year mortgages (rental and primary residences!) Why you should separate your business expense tracking from personal expense tracking Why a 457(b) plan is great for those who have it available And So Much More! Learn more about your ad choices. Visit megaphone.fm/adchoices