WHAT TO DO WITH YOUR EARININGS???

[Clifton Prescod]

I know we are grown and "can do whatever you want with your earnings", but one thing I see a lot on youtube, forums and such, is the omission (knowingly or unknowingly) of advice to young investors who have earned their first deal cheque or after theyve done a few deals.

Im curious to hear some perspectives. 

One thing I think about is: But what about taxes?

I know people do 1031 exchanges but what about the girl or guy who got into real estate because they want some extra income, or pay off school loans, or use it towards a vacation? Would love to hear your thoughts/advice?

[Peter M.]

All my rental proceeds go back into the rental account( I have a W-2 job now). If I ever did anything that triggered capital gains I would probably set 30% aside in a savings account just in case. 

If I ever did real estate full time, I would try to do 30% taxes, 10% savings, 5% charity, 5% college fund, 10% reinvest in RE, 40% living expenses. Any leftover in the tax account after tax time would be my "return." So its going to be a while before I get to the point that I can live off 40% of my RE business. But one day...