Advice on paying down personal debts

[Rachel Hezel]

Hi, newbie here. One of the things I'm uncertain about is whether or not I should pay off personal debts before making investments. For example, in about 1 year both my car loan and student loan will be paid off. Would it put me in a stronger position to wait to buy property? I'm not sure how much personal debts matter since I see a lot of people recommending investing under a LLC. Any insight here would be great!

[JD Martin]

Quote from @Rachel Hezel:

Hi, newbie here. One of the things I'm uncertain about is whether or not I should pay off personal debts before making investments. For example, in about 1 year both my car loan and student loan will be paid off. Would it put me in a stronger position to wait to buy property? I'm not sure how much personal debts matter since I see a lot of people recommending investing under a LLC. Any insight here would be great!

Yes, it will put you in a much stronger position to buy property. I don't know how much your loans are but you will need dollar for dollar in income just to get back to zero starting point with installment loans, i.e. if your monthly income is $3k and your loans are $1k you're going to be starting from a point of $2k income before any other expenses. The LLC will be of no use to you in this regard because you will have to guarantee any debt personally since the LLC has no assets.