Re: Your Virtual Financial Advisor

Great Question Rob. You are very fortunate that your employer provides a 50% match for the first 8%. That's equivalent to a 50% return on day one of your contribution. Every dollar invested over the 8% on day one only provides a zero percent return on your contribution. However, don't let that part of the decision bum you out. The prinicpal invested is supposed to be managed to exceed average returns for your future.

The premise for the 401K is to avoid diluting your investment with taxes (i.e. deductable), coupled with a tax deferred (not the same as tax free) growth. Then, in your retirement years theoretically, you will be in a lower tax bracket and then have to pay tax on BOTH the contributions put in AND the growth until your distributions are completed. My position is that in 30 years you will not WANT to retire and many will not be able to afford to retire. (hope you are not counting on social security). In 30 years the social security normal retirement age will probably be 82 and your benefits will be embarrassingly low.

The answer to your quetion depends on several factors. First review my module on investing in income producing assets. Notice that "control" of the asset is key. How much "control" do you have over your 401K portfolio? Are you restricted to an administrator's investment decisions? Are you limited to a couple mutual funds? Or can you actively "manage" your funds into ETF funds and other more creative asset classes? Since this is your future you may want to invest the time to actively manage these funds rather than read statements. If you can't or don't feel qualified to manage your 401K, then do NOT contribute more than the 8% to it.

Instead, make after tax investments like the ROTH and/or direct asset class investments. Invest only in asset classes you have knowledge of or have the interest to master. A good review of the modules on this site related to the economy and the future should help. Personally, I am invested in real estate now but my focus is more on buy and hold intead of flipping. I am trying to pay down financing on existing properties as a protection against rising interest rates and as a way to de-leverage for greater future cashflow. Income producing real estate provides tax relief during working years and high passive income when the financing is paid way down.

Remember that the most highly taxed income is your "earned" income. When you add Federal, State, Social Security, Medicare, FICA, FUTA, SUTA, and all the junk taxes there is not alot left over.

Please help me get more interest in this site by posting and sharing on your social media.
Thanks,
Ray

Re: Your Virtual Financial Advisor

Interesting Question. First, I have to inform you that I am not allowed to give you legal advice. Secondly, I am not licensed to practice either Law or Real Estate in India. However, I can tell you what I would do as an investor if it were me and if the rules in India are similar.

First, who "owns" the land? Looks like you paid for the land and Dad in Law paid for the building. Since you had to buy the land BEFORE you started building I am hoping that the deed to the land is in your name exclusively. Worse case it should at least be in both your names. There should be some office that records ownership. Those records should be available to you. If you BOTH own the land then you will have to agree on selling unless one of you owns the majority of the land percentage. If you own the land you control the factory building as well.

A couple years ago I purchased an office building from a bankruptcy but the previous owner would not pay rent or leave. It was lower cost for me to pay my contractor to destroy the toilet in the building. A couple weeks later the tenant moved out. Maybe you could have the electricity, or water, or some important service disconnected.

The other option if you are not on speaking terms anyway would be to explore eviction laws and have the police remove them from the property. Maybe as a courtesy you could have a lawyer approach them with a lease or evict demand. Once they sign the lease if they don't pay you can then easily have them evicted for non payment. Another idea would be to have a real estate broker start "showing" the property to potential renters.

Hope these ideas get you started. Good Luck.
Ray