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Should I prioritize investing in our business?

Started by chrismoneystir, May 12, 2019, 11:33:35 AM

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chrismoneystir

We are getting to a point in the next few months to max out our 401k, and Roth IRA's. At that point, we will have a significant amount of money we can dump into after-tax investment accounts. Outside of our mortgage, we are debt free and have excellent credit.

An option came up where we can expand my wife's salon and generate an additional $1,000+ per month of passive income (where we can bring in more booth renters). But it will require around a $15k-20k investment to get set up. Do you think it would be worth pausing our after-tax investment contributions to save that $20k in cash over 3-4 months to generate an extra $1,000+ per month in profit by the end of this year? It would take about 2 years to break even from the initial investment but would increase our yearly profit by $12k/year.

I kind of think this is a no brainer, but I wanted to get other people's thoughts on this. The benefit of doing this is even if my wife ends up deciding not to see clients, we could still keep the salon and all of the booth renter income after expenses (lease, utilities, etc.) would be fairly passive income requiring minimal work to maintain.

What do you think? Is this a wise move? What would you do?

Sam

A $12K annual return on a $20K investment is a 60% annual return and a payback period of less than 2 years.

A no brainer if you have confidence in the return!
Regards,

Sam

chrismoneystir

That's what I thought! Thanks for the input, Sam.