Hey Mustachians! I've been reading and absorbing information on saving for the past few days. Doing so may have changed my mind a little bit on what my priorities are and what may be best for my future.
I'm in my early twenties and I run 2 single person businesses, trying to keep living expenses as low as I can. Right now, I only pay for food and sometimes rent/utilities (sometimes I do, sometimes I don't as I live with my parents to keep costs down).
When I first started turning a profit, I thought to myself that a house is very important and that will be the easiest way to settle myself down and not have much else to worry about. I came to the conclusion that I'd need around $25,000 a year to live off of (property taxes, insurance, bills, etc).
- Pre-tax Yearly Income: ~$282,000 (volatile job, so not sure how long it would last)
- Current Emergency Fund: $30,000
- Current Balance in Bank: $200,000
- Roth IRA: Maxed/year
- Debt: 0
Since my business is relatively volatile, I figured that I'd need to make a very large down payment on a house to offset the risk. I would also offset the mortgage by renting out one or two of the rooms in the short to mid term. I wouldn't go bigger than 3 bedrooms (this is mainly based on wanting to stay in the area for 10+ years if I were to make that commitment, and may want to start a family).
Saving up my money to afford a house may be tying me down and not be as beneficial to me as I once thought. A lot of people point out the upkeep of a house, and the potential costs it could be to keep tenants in a house you own.
I got to thinking that investing my money might be a better option for me, renting modestly for the next 5-10 years so I can easily invest more and continue living how I do (relatively frugally). But, I'm not 100% clear on investments and the tax deferrance they may or may not have.
Sorry this post got a little bit long winded. I am just at a bit of a crossroad on what I should do. I'd really appreciate any advice and/or opinions you have as many of you have much more experience with finances than I do.