I need your Help for an article going live on 4/4 - Get a PR4 Link to you blog | Personal Finance & Lifestyle | Yakezie Forums

Of course, it is all about your risk tolerance, and I am all about change and new challenges.  Therefore, I vote for the additional real estate.  I just can't imagine a scenario where you couldn't make more than 1% to offset the car loan.  Even a high yield savings account gets close to that.  In addition, it seems like real estate is starting to recover, so if you can grab another property before they start trending more updward, all the better.

For starters, I'm not sure that daycare fits your definition of "must have spending." You stated that this category is for expenses that "you have to pay regardless of having a job or not." Would you still have to pay daycare if you didn't have a job?

Setting that aside, I would lean toward paying off the debt. I fully understand the mathematical arguments in favor of carrying low rate debt. I say this mainly because I value simplicity.

You're a busy guy. By simplifying your situation, you're freeing up valuable mental space. And with all the things you have going on the side it won't take long to replenish your stash — minus the car loans.

I love real estate because I used it to become financially independent, however nothing ever goes exactly like you want it o go.  You should have reserves for vacancies, maintenance and other unexpected expenses.  Is there any way to adjust your schedules or make other changes to lower the cost of day care?  If not, I would lean to additional income to offset the cost.  Good luck.

sorry here is the post

krantcents said:

I love real estate because I used it to become financially independent, however nothing ever goes exactly like you want it o go.  You should have reserves for vacancies, maintenance and other unexpected expenses.  Is there any way to adjust your schedules or make other changes to lower the cost of day care?  If not, I would lean to additional income to offset the cost.  Good luck.

Great questions/comment Krant. We have 5+ years of emergency funds at current spending levels. if stuff hit the fan, we can adjust our lifestyle to no need an emergency fund at all. You've read my networth post.. you know who much money we waste :-). With that said… There is no lower cost of daycare in my area. To adjust our schedules will come at a reduction of income coming in.. thus making the situation worse.

I would pay off the cars with the cash that you have today. I prefer to not use debt at all as I am a big fan of bootstrapping and using the resources that you do have to buy things. I understand the mathematical side of things, however, I think it is more what do you need to do in order to achieve your financial goals. 

On another note, I have owned rental real estate and it can be a headache at times. Another question you should ask yourself is this: "Do you need one more thing on your plate?" Sometimes it is not worth the stress and aggravation involved for the return that you get on your money.

That is my 2 cents.

Hey Dominique

After reading your profile I noticed you're in the Northern Virginia metropolitan area and daycare is absolutely ridiculous! We have two kids and they quoted us $700/week. I would go with the real estate deal seeing that you are much more seasoned than others with managing real estate and your risk tolerance.

However, I may have a better solution for you. Depending on you and your wife's situation would you be willing to entertain an Au Pair? If you're not familiar with them, BLUF they are foreign nannies who come live with you and care for your children. I know this seems a bit intrusive but they can be invaluable. I would give it some consideration as the costs for an au pair are MUCH cheaper than daycare in our area.

Brick By Brick Investing said:

Hey Dominique

After reading your profile I noticed you're in the Northern Virginia metropolitan area and daycare is absolutely ridiculous! We have two kids and they quoted us $700/week. I would go with the real estate deal seeing that you are much more seasoned than others with managing real estate and your risk tolerance.

However, I may have a better solution for you. Depending on you and your wife's situation would you be willing to entertain an Au Pair? If you're not familiar with them, BLUF they are foreign nannies who come live with you and care for your children. I know this seems a bit intrusive but they can be invaluable. I would give it some consideration as the costs for an au pair are MUCH cheaper than daycare in our area.

Our original plan was to go with a Nanny, but we canned that after not finding someone we liked. We didn't think of an Au Pair, fortunately, we were able to find an amazing center 2 minutes from my house that's working out great. NOVA definitely can get pricey with the daycare, especially if you live near the city.