I am 23 years old and selling my Sports Car/Winter Car to gain economic freedom faster (Don't really need to do this, but I want to). Currently I make around 65K a year and bought a very cheap trailer that I currently live in due to the low living expenses (Bought the trailer for 10000, with monthly park rent expenses of 430 a month). When I sell both my vehicles, I will end up with 34K in cash.
- 10,000 Of that money would go to paying off remainder of the Sports Car Loan.
- 3,500 would go to paying off the remainder of mortgage.
- 8,000 Will go to fully buying a reliable 4WD vehicle due to the weather where I live.
- 12,500 will be remaining after purchasing the much cheaper vehicle, and paying off both car/mortgage.
- Currently have emergency fund of 5,000.
Other benefits of the decision include no longer paying a hefty car insurance payment for owning a sports car, dealing with the maintenance of two vehicles, no longer registering both cars.
What I am doing right now.
- Have a credit score of approximately 765.
- Currently investing into company 401k fully utilizing the match given by company.
- Have a ROTH IRA on the side from previous employer.
- Currently finishing the last of the renovations on my house, in total has cost me 8000 dollars with about a remaining 3000 to go. The house itself cost about 10,000 dollars which was the entirety of my mortgage.
Currently where I live, people are buying houses for incredibly expensive amounts, similar to that of pre-'08. I have already seen large increases in house foreclosures in my area selling well below market value. I would like to consider purchasing these properties under market value and setting them up to be rental properties.
My Question is: Should I go the route of contributing the yearly maximum to my 401K or should I take advantage of the local housing bubble in my area. There is no clear cut answer to this question, just looking for possible pointers and things I should take into consideration.