Hello all and thanks for reading-
I am only 25 and I am looking for some advice on a long term plan with the end of the year coming up.
My current situation is:
-Avg income around 75k for the last two years, before that 40-45k
-Avg monthly expenses around 2k a month including mortgage. (watching it more closer now)
-Not a very stable job, as my company is involved in a merger/takeover, and future is unclear.
-0 credit card debt
-I owe 10.9k on a '14 subaru @.9%
-5k checking account
-5k ER fund in a 'savings account'
-19k 401k
-16k in a diversified TDameritrade stock portfolio (I know, not index funds yet)
-I bought a house 3 years ago and I owe 120k on it @ 4.75%, (worth anywhere between 160-200k) and I have a 12k HELOC on it, which is low becuase there recent apprasail was 160 and before was 200 (based on foreclosure comps)
I am planning on upping my HELOC in the next few weeks for as much as they allow.
So my thoughts are that I want to move the 5k out of the savings account. I have liquid money in my stocks, a decent HELOC, 4-5k averaging in my checking account... So I am considering opening an IRA and funding it to the max with savings account (earning nothing) so that I can atleast get the tax breaks as I will be at a higher tax bracket this year. My other option could be to put it into the stocks as an index fund and although I wouldnt get any tax breaks, I would still have the funds easily accessible. My goal is to purchase an investment property to either flip or rent in the 40-100k range (in PA). I am hesitant to put the 5k in an IRA because I feel that It might be more beneficial to save as much cash now for a downpayment on a real estate purchase. Can I just use the HELOC on my down payment? I would imagine it should be much higher than 12k this time around.. also, as much as I want to get out of all debt, I am not really considering paying off the subaru car loan, since its only .9% interest.
So, in summary: My long term plan is to get started in real estate, but looking for advice on how/when to get started in the game, before I use funds elsewhere for tax saving.