306: Finance Friday: Self-Employed Income and Short-Term Rental Investing

If you want to invest in real estate, you’ll need a few things: a property, an income source, and some cash. If you’ve got all three, you should be able to finance your way to owning a rental property, but this becomes a little more challenging when you’re someone with fluctuating income. Entrepreneurs, especially those without a consistent client base or consistent schedules, have a seriously hard time tracking, budgeting, and saving their income which changes every other month.

Chelsea and Wade feel this way as well. They’re both entrepreneurs, but, as a filmmaker, Wade has far more fluid income than Chelsea does. Some months Wade will bring in tens of thousands, while other months, nothing. Chelsea can subsidize the household budget with her more regular income, but even then, the couple needs to keep a strong safety reserve to ensure they’re never going too over budget without their bank account being refilled.

Thankfully, Chelsea and Wade are very good at managing their money and may actually have too much of it. They’relooking to dive into real estate investing to start building a path to financial freedom. With a serious amount of safety reserves, they’re thinking of buying a short-term rental as their first investment property. But, does their inconsistent income threaten their vacation rental plans?

In This Episode We Cover

How to manage emergency funds and safety reserves when self-employed

Retirement accounts vs. rental property investing and which is best for early FI

Saving for your child’s college and why a 529 plan may limit your child’s future choices

Self-employed health insurance and whether or not getting a job is worth the lucrative benefits

The most important metric to look at when investing in short-term rental properties 

Whether or not your cash position is too conservative for your investing goals

And So Much More!

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Check Out Mindy’s 2022 Live Spending Tracker and Budget

How to Find Free Money to Finance Your Education & Avoid Extensive Student Debt

Is College Worth the Cost? This 30,000 Variable Study Says “Sometimes…”

Why 40% of Master’s Degrees Aren’t Worth It (and Which Are) w/Preston Cooper

529 Plan Rules - Nerdwallet article

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