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Ask Dave

Which Step Does It Go In?

Steven has some small business debt and doesn't know which Baby Step it belongs in.

QUESTION: Steven and his wife own their own small business. They only owe $100,000 on their home and $225,000 on the land of their business. They make into 6 figures and have an emergency fund, as well as retirement and college savings. Does that business debt fall into Baby Step 2 or Baby Step 6?

ANSWER: You can attack it wherever you want. You’ve done a good job and have an emergency fund and are saving for retirement and college. Pay off your house first, because if everything came crashing down, you’d rather lose your building than your house. Plus, the house is the smaller debt. Attack this house debt will all that you reasonably can, since you’re doing so well.

I’d say you’ll have no debt in 7 years, and you’ll go into prosperity mode like you’ve never known. You’ll make so much money you won’t believe it.