How Much Income Do I Put Toward Buying Land?
Dennis and his wife want to buy some land in the near future. What percentage of their savings should go toward the land?
QUESTION: Dennis and his wife want to buy some land in the near future. What percentage of their savings should go toward the land?
ANSWER: I don’t know that it’s a percentage. The first thing I want is to be debt-free except for the house and have a full emergency fund of three to six months of expenses. Whatever is left over that is simply wealth sitting there, I don’t mind putting it all toward the land. It’s not a matter of percentages, but ratios.
The answer might change if you make $12,000 a year versus $112,000 a year. Pay off your remaining debts, and get your emergency fund in place. Until then, it’s not even under consideration. And don’t put retirement on hold for ten years to save money for dirt. There has to be a balance.