Should I pay off my truck???

[Nick Dillaha]

Hi! Trying to set my investing career off right. I always had the opportunity cost mindset and kept low interest debt to save for another rental property. Recently listened to a Dave Ramsey rant and he talks about paying off all small debts prior to saving. I have $55k in my savings and I owe $23k on my truck at 3.5%. $4,200 in interest savings if I pay it off today. Struggling because I’ve been saving for another property. I can probably save that $23k in a little over a year. Should I do it??

[Greg Scott]

Don't listen to Dave Ramsey.

So your owe $23K on your truck at 3.5%.  By my calculations you are paying $805 in interest this year or an average of $67 per month.

With your $55K you have two options.   1) pay off that truck and save yourself $67 per month or  2) buy a rent property with a $23K down payment and generate $200 to $500 per month in cash flow.   Which is better?