BiggerPockets Money5 Maalis 2021

176: How to Grow Retirement Accounts Before Having Kids | Finance Friday with Steve

Most listeners of the show will know that a cash cushion is always great to have and should be mandatory for almost everyone. Having a cash reserve of 6-12 months can help you cover unexpected expenses or life events like a sudden medical bill or losing your job. That being said, sometimes you can have a cash cushion that’s too big for your lifestyle.

Today we talk to Steve, who has been paying off his mortgage quickly with the help of his wife. They both have respectable salaries, retirement accounts, and a large cash cushion. Steve wants to know whether or not he should move some of his cash out of his reserve and into retirement accounts or real estate.

Since Steve has such a large cash cushion to rely on, he could take out a fraction of it to use as a down payment on a rental property and still have tens of thousands left over! Scott and Mindy walk Steve through the different options he has, such as paying off his primary mortgage then buying real estate, pausing his mortgage prepayments and going all in on real estate, and other strategies.

Steve is in such a secure position that it makes it hard to criticize his current standing. That being said, he could be using leverage to springboard his investment property portfolio and be on the path to financial freedom sooner!

In This Episode We Cover

How much of a cash cushion you should have available
Eliminating big loans like mortgages and student debt
Buying rental properties before you pay off your primary home
Leveraging debt in order to grow your wealth quicker
Getting a real estate agent to start browsing the market for rentals
And So Much More!

Check the full show notes here: https://www.biggerpockets.com/moneyshow176

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