294: Finance Friday: Stable Index Funds or Cash-Flow-Reliable Rentals?

Index funds and rental properties are at opposite ends of the investing spectrum. On one side, you have highly diversified, almost entirely passive index funds. On the other, you have cash-flowing, yet far more hands-on, rental properties. Both of these beloved types of investments belong in (almost) every investor's portfolio, but how much should you have of one or the other? Today’s guest Cecilia has built a strong net worth while keeping her income high and expenses low. She bought at the bottom of the market in Southern California, so while home prices rise all around her, she’s sitting comfortably with her rock-bottom mortgage payment. Thanks to all the housing expense-related savings, Cecilia has been able to dump a lot of her extra cash into the stock market. But, she’s longing for a more travel-focused life, where she can take sabbaticals in any corner of the world she chooses. Part of her plan to wealth-gaining greatness is buying a short-term rental in a city she loves, so she can still vacation on the cheap. In order to do this though, she may need to sell off some of her investments or swap her strategy entirely for cash-flowing rental properties in cheaper parts of the United States. Which path will set Cecilia on a fast track to FI? In This Episode We Cover How much to have in your safety reserves and what to do when you have too much cash Index funds vs. rental properties and when to focus on which asset Long-term rentals vs. short-term rentals and the cash flow that comes from both Building the perfect investment plan that will coast you to the life you love Automating your business and spending less time on repeatable tasks Whether or not early mortgage payoff is a good idea in low-interest times And So Much More! Links from the Show BiggerPockets Money Facebook Group BiggerPockets Forums Finance Review Guest Onboarding Scott's Instagram Mindy's Twitter Apply to Be a Guest on The Money Show Podcast Talent Search! Subscribe to The “On The Market” YouTube Channel Listen to The “On The Market” Podcast: Spotify, Apple Podcasts, BiggerPockets Check the full show notes here: https://www.biggerpockets.com/blog/money-294 Learn more about your ad choices. Visit megaphone.fm/adchoices