While the real estate investing market is more tumultuous than normal, what should you do with your money?
For several months, it has been my position that now is the time to acquire real estate in strategically wise markets. You probably still need to be shy of those few markets that experienced ungodly appreciation (like Miami, Vegas, etc) – but a large number of many other markets are near or past their bottoming phase.
But what if you’re a real estate investor and still nervous about pulling the trigger on your next real estate investment?
Then the best way for you to make money in a totally risk free way is to stop losing money to interest. In other words, pay down your existing debts! The way I see it, you have to pay your debts anyway, don’t you? To retire your debts aggressively and ahead of schedule simply means you’re doing what had to be done anyway, but in the process you’re saving money on interest expenses.
I’ll readily admit that this idea is neither revolutionary nor particularly eloquently stated. But the fact remains: The aggressive elimination of debt during a period in which you’re not focused on real estate investments anyway can be an excellent way to use your money.
After all, if your credit card balance carries an interest rate of 18%, you’re effectively achieving that rate of return with every dollar used to pay down your debt ahead of schedule.
As always, let’s keep our eyes on the prize: Better financial health. And in a time of real estate stress such as now, elimination of debt makes more sense than ever.
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