Here's an email I recently received from a reader:
I'd like to get readers thoughts on paying off large debts. In my case, I own rental properties where I would like to pay off the mortgages for long term income. One mortgage is around 80k and the other 100k.
We live off my salary and I earn quarterly bonuses that range from 5 to 15k a quarter after taxes. The rental properties also generate significant cash flow and will generate around 10k a year but it could easily be 0 or close to 20k based on the improvements and occupency rate.
My problem is that I always have a list of 'to do' items for the bonuses. These could be home related, replacing a car, buying another rental property, family vacation, or a major family event.
If I had 6, 30k loans I bet I would have a much easier time paying them off than these two loans totaling 180k. I know these amounts seem large to some but I think the same pricinple for would apply for 18k in debt versus 6, 3k debts.
I can't seem to commit to sending a fixed amount in to pay off the debt as I feel I may want to use the money for something else. If I was close, I would have no trouble sending a check for the full amount. Is this crazy? Any thoughts?
What's your advice for him?