Index, stock, RE or keep saving.

[Fareed Khamitov]

Hello world.

Me and my wife are in our early 20. I am 23 she is 21. Right now we both work full time with income of around $50K annually. I am also a full time computer science student in my junior year. Right now we have car payment, mortgage on a single family house that we bought last year and no student debt.

Throughout the years we managed to save $25K. Seems like the more I read the more options we get. "Set for Life" is advising to save, invest in Index Funds and then in RE. "BRRRR" by Mr.Green is advising to save a lot and then buy house cash, and books by R.Kyiosaki are advising to start playing a little in stocks and funds to get used to investing and then get into "big" business or RE and so on. The end goal for us is real estate I know that for sure.

Now the question is: should we keep saving or start investing if not all, but part of it? What would you do in our place?

Thank you all!

[Whitney Hutten]

@Fareed Khamitov Definitely invest in your education and savings while you figure out where you want to invest.  That said, your first real estate investment could be your primary home (I know this article says "retirement" but really... it can be a plan of attack for any stage of investing). I know BRRRR is the darling investment strategy in RE, there are other ways to invest in real estate that don't require as much money to get in, such as notes, REITs (VNQ with Vanguard), tax liens and private lending (all require education!). Just because you don't have a large pile of assets doesn't mean you can invest. My point is... it doesn't have to be BRRRR or bust... here is an action plan to entertain:

1. Consider paying down your consumer debt so you have a better debt to income ratio for lending (balance this with saving / investing).

2. Work on that credit score to get to 740+ so you can get the most favorable rates.

3.  Look at your current assets and see if you can reposition them to be your first RE investment.  This tends to be the easiest entry point into real estate for most people who don't have much saved up (and don't underestimate it's power!).  Could you househack your current property?  Could you move to a duplex to househack and rent our your first primary? Etc.

4.  Make sure you have an emergency savings fund... I like 3-6 months minimum of all expenses (this can be invested in safer vehicles so you earn a higher yield to beat inflation).  

5.  Educate yourself on other strategies that you could get into right now with what you have.

6.  Explore ways to reduce your personal expenses AND increase your income (side hustles) and save that difference.

PM me if you have Q's.