Hi all - I have had a question on my head for a while and was wondering if through the magic of compound knowledge I would be able to get my answer.
I am gearing up to "retiring", meaning quitting my 9-5, since I believe I am already FI... and only 31 years old.
However, I know my next few decisions could be critical to my long term future and was wondering if you could help.
My situation is as follows:
Net worth: $2.2M
Liquid: $150K in different savings accounts (US, Spain and Dubai)
Non-liquid investments: $$850K in 401ks and taxable Vanguard accounts (90/10 on stocks)
Rental Properties - 5 properties between Florida and New York
- Value: $1.8M
- Mortgage debt: $550K
- 4.5% interest average on the 3 properties I hold a mortgage for: About $5K/month in payments including maintenance/taxes/etc.
Equity: $1.2M
My plan is to quit my job in 18 months, and dedicate full time to writing. Currently, I make about $5K/month writing for a few blogs, so I'd like to continue that and ideally expand to doing a few more freelance gigs.
From the rental properties, I manage to collect about $5K on top of paying for all three mortgages.
My question is: Before I "retire" would it make sense to move some of the investment money to clear one or two of the mortgages? I debate this because, on the one hand, if rent money or freelancing gigs were to die off, I'd rather not have a $5K/month payment over my head (I could cut it down to $1.4K/month if I can pay off all three mortgages).
However, I wonder if, paying no personal income tax (the freelancing goes through an LLC) and with $10K/month in rental income, having no mortgage payments to offset my income, would hurt me a lot come tax time.
Any ideas/thoughts or suggestions will be more than welcomed!
Thanks in advance.