Quoted:
Quoted:
I'm 32.5 and I only have 30K between my 401K and Roth IRA. However instead of putting more money into these I invested in two rental houses which which already have a NET profit and will return about 14.5% per year once they are paid off. One has 27 years left and the other will be paid off in about 14 years.
Just some food for thought, but your rental properties will generate higher % returns if you keep them leveraged.
Example:
$100k home (Paid Off)
$14.5k in rents net of expenses (your 14.5%)
14.5% return on $100k
$100k home (80% at 5% interest)
$10.5k in rents net of expenses and interest
52.% return on $20k
Using the example above where you have $100k to invest. You could have 1 property at $100k earning 14.5% or you could have 5 properties at $20k down each earning 52.5%.
I am a firm believer that the only point of rental properties is your ability to buy them with leverage. I'm not saying this makes sense all the time, for every person, and under every market condition, but you should at least go through the thought exercise and decide for yourself.
It's worth noting that damn near every person that ever got rich
(quickly) did so with some form of leverage either directly or indirectly
(at great financial risk). I bet I could shoot down most counterexamples that people would come up with to disprove that statement as the use of leverage is often buried deep down in the details. Try me.