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Thank you for your openness.

As I said, I live in rural southwest Missouri. I found out the other day that 33% of the the residents in my county live below the pover(y level. Not exactly a thriving rental market.

I'm not trying to delve too deep into your personal portfolio, but if you are willing to discuss it....

Have you ever calculated your actual net worth? Assets vs. liabilities? At age 28, we are currently at approximately $107,000 actual worth. (We owe $70,000 on a $150,000 property. Two used, paid for cars worth $8,000 and $20,000 in the bank)

Have you calculated your actual APR on what you are earning on the properties? I know that it becomes quite intricate when you factor appreciation, interest rates, tax deductions, etc. Your accountant probably does quite a bit more than ours does, but then again that is what you pay him for.

I'm asking out of genuine curiosity. At my age, I'm still learning all the amazing opportunities that exists in this amazing country of ours.

thanks

One question...Well guess what? Business losses are......tax deductible! So, it doesn't really matter if I cant find someone to pay enough rent to cover me. I win either way.

A $10,000 business loss translates into an approximately $2,000 tax deduction depending on your tax rates, correct? It appears that this would leave you 8 grand in the whole as you took a $10k hit to avoid $2k in taxes.

I'm currently paying approximately $4700 in interest resulting in a possible tax deduction of $1170.00 at a 25% tax rate. I can't see the reasoning behind paying $4600 in taxes to avoid paying $1200 in taxes.

I'm always willing to learn, so any info you are willing to submit will be greatly appreciated. I plan to be quite wealthy when I retire..not because I did something great, but becuase I did it right for a very large portion of my life. I'm always interested in learning from folks who have been there and done that.

thanks.

I wish I was in your shoes at age 28

Have good plans but understand that life will throw many curves at you. Real life choices will be made, some will forfeit great $$.

For me, I was at one time a fairly successful amateur bond trader (CBOT FUTURES) Think I might try to get back into it.

I guess the point there is, go into something you understand and can work with.

Wolf

Ive calculated my net worth, but I aint going into that on the Internet. I have almost no liabilities at all. I have a golden rule, which is that any liabilities that I do purchase,(cars, boats, electronics) I pay for with CASH. Except for a home, people should always pay with cash. Remember I said there is good debt and bad? Good debt is debt for assets. Bad debt is debt for liabilities. I consider anything that loses value to be a liability. You are correct that my accountant is responsible for all the calculations you inquired about.

Lets just put it this way; I can do what I want when I want, wherever I want, and that's all I want. Get it?

I'm currently paying approximately $4700 in interest resulting in a possible tax deduction of $1170.00 at a 25% tax rate. I can't see the reasoning behind paying $4600 in taxes to avoid paying $1200 in taxes.

Don't forget that you own the asset. Have you calculated the property value into this equation? I expect the value of each of my properties to increase by at minimum 15-25K per year. Now, if you had to pay 4700, minus 1170, to increase your net worth by say, 15,000 would you consider that a bad deal? And, you can consider that 15K FREE MONEY? When you sell, or even refinance, you can stick that money right in your pocket. But what most people do, which is really dumb, is to sell that asset and put it towards a larger debt which they can barely afford, instead of keeping the asset, refinancing it and taking money off the top to invest in a second asset, while still owning the first one.

So, year one you've got 15K. Next year 15 from another asset, and 20 from the first one, because its value is still going up. Note; renters are paying all the bills, and tax breaks are making up for vacancies and other losses because this is a business. I have not spent a personal dime beyond my original investment, but my assets are making money for me every day.

I cant get more specific, but my advice to you, would be to use your money to increase the value of your property. Simple landscaping from a professional can do that, as long as the home is already in good shape. Keep your cars in good running condition, and don't EVER by a new car unless you can pay cash for it. Financing a new car is the single dumbest thing that Americans do with their money.

If I were you, I would take at least half of that 20K from the bank and put it to work for you in the stock market. Don't be greedy, just get a no-load index fund. When you get back to 20K, buy another house and put good renters in it. They will pay for it, you will get the tax breaks, and every dime of value in the home goes in your pocket.

Do this two or three times, and banks will line up outside your door to loan to money to do it on a larger scale.