Moving Forward ADVICE needed - Posted by Gman (TX)
Posted by Gman (TX) on April 11, 2004 at 11:57:30:
Greetings all:
I would like to solicit the advice of the many wonderful people that are part of this community. I am at a happy crossroads in my life, and would appreciate the insight of those who have found themselves faced with similar decisions.
To keep this short (kind of short!) - 4 years ago - I was divorced, BK, not a penny to my name, and close to 86K in debt with a 38K annual income that barely covered expenses.
Today - I have worked hard to clean up my financial mess - my only debt is 5K for a student loan used to finish my MBA, and 10K on my auto…no CC or other “liability” debt. I have 65K annual income, a mid FICO of 635, and 35K saved in a 401K. I have just finished with my self created debt payoff plan(don’t buy anything and put every spare penny to debt!) and will now have about $1500 month pure savings or investment cash after living expenses.
I have done all of this for two reasons…to never find myself in the mess I was before, and to position myself financially to where I beleive I needed to be in order to begin my investing career. I know you don’t have to have cash or credit to be successful in this biz, but it was important for my peace of mind given where I started from.
My question now - do I continue this conservative approach…build cash reserves and then use my first investment as my personal residence. Or do I jump right in and begin investing (would like to start with Lonnie deals where I can use small amounts of cash and not take on any more debt to generate some cash flow). I know it makes sense to buy my own home and get out of the rent trap, however I am concerned that it will slow down my ability to pursue other investments once I take on the burden of a mortgage and other household expenses.
A couple of other things to consider - my monthly living expenses currently are very low, and I do not have a family to move into a home - for the meantime, its just me.
Sorry for the long post…I appreciate any advice you might have in this situation. I have been mulling this over for a couple of months now, and I figured what better place to supplement my decision than with the fine folks at CRE.
Thanks in advance for your consideration.
Gman