rental properties are really a great way to get to that level. you gota put some work though into finding good value on the buys, and then making sure they are in an area that always remains somewhat "rentable".
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Orlando Ayala Cant Read
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My dream is to start a one or two person business I can run with my wife from home....
Have like 4 ideas, some a lot better than others, but I want to match my employment income with a side business, just invest and live off of investments.
I have like a writers block, but like an action block for testing these ideas...
Anyone have advice for getting into action mode? I think it may be a deep down fear of what other people will think or say.
I like reading how others are building wealth In this thread.
Have like 4 ideas, some a lot better than others, but I want to match my employment income with a side business, just invest and live off of investments.
I have like a writers block, but like an action block for testing these ideas...
Anyone have advice for getting into action mode? I think it may be a deep down fear of what other people will think or say.
I like reading how others are building wealth In this thread.
Orlando Ayala Cant Read
Joined:
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Posts:
69,636
How long do you want to ignore this user?
AG
Also curious to know where the $1500/mth net income properties are? This has got to be before mortgage or no mortgage I would think. Right?
I think he's CFing $500/mth from the SFH as well as each side of the duplex.
3 x $500 = $1500
3 x $500 = $1500
quote:Correct. I'll update the post to make it more clear.
I think he's CFing $500/mth from the SFH as well as each side of the duplex.
3 x $500 = $1500
quote:
http://finance.yahoo.com/news/millionaires-share-top-3-priorities-173600775.html
kind of reminds me of the old proverb.... 'early to bed, early to rise, makes a man healthy, wealthy and wise'
I agree with top 3 in that article, but would switch 1 and 2. I'd give up a significant portion of my net worth for my health or safety, but I'd take death over leaving my family broke. I'd probably liquidate and give up 1/2 my net worth for a guarantee that I'd never get sick again. I'd give up everything for an immediate family member's safety though.
In my mid 30s. The strategy has been pretty simple
1. pay off all debts first
2. minimized expenses
3. save/invest everything. Mostly in U.S. equities.
I hope to retire by 45.
I'm close to my mid-30's and I'm definitely doing it wrong. Did you start out with some type of inheritance or windfall? Own your own business? What type of career do you have?
No inheritance, no windfall. I started out with over $30,000 in student debt. I work in a non-technical, professional degreed job. No business, just salary. Three things helped me more than anything.
First, luck in being alive during one of the biggest financial downturns ever from 2008 to 2011 or so. So many quality, cash-flush companies were at historical bargain bin lows, yet ppl didnt have the nerve or the cash to buy.
Second, having a well-paying job that allowed me to quickly amass cash to buy in during and after the selloff. And max out my retirement contribution and company matchingduring those years.
Third, my refusal to spend or make life decisions for the sake of impressing others. I'm seeing someone, but i am not married and have no children. Other than the administrator of my will, not a soul knows of my net worth. I happily drive a recent model Camry. And I live in a modest house. No luxury cars, no McMansion. I eat and dress well and I spend a lot on travel, my life otherwise unassumingly modest. I'm content and have little stress over money.
First, luck in being alive during one of the biggest financial downturns ever from 2008 to 2011 or so. So many quality, cash-flush companies were at historical bargain bin lows, yet ppl didnt have the nerve or the cash to buy.
Second, having a well-paying job that allowed me to quickly amass cash to buy in during and after the selloff. And max out my retirement contribution and company matchingduring those years.
Third, my refusal to spend or make life decisions for the sake of impressing others. I'm seeing someone, but i am not married and have no children. Other than the administrator of my will, not a soul knows of my net worth. I happily drive a recent model Camry. And I live in a modest house. No luxury cars, no McMansion. I eat and dress well and I spend a lot on travel, my life otherwise unassumingly modest. I'm content and have little stress over money.
That is an awesome story. My wife is a SAHM and I have 2 young boys to take care of, but I wouldn't trade any of that for anything. Hopefully in a few years I will be at that point.
Money isnt everything, so I'm happy for you and your family. I'm glad I realized early that I value my freedom too much to ever get married or have kids. Tons of my classmates have realized over the years they made a mistake getting married and starting families young, the stories range from sad to miserable. I can't imagine starting over at my age, emotionally and financially.
Sounds odd but I'd probably be better off financially if I was married. I tend to date professional women who have or want no kids, as well. The second income and the tax breaks would have been great. Having kids would put a dent in whatever combined worth I would have had, but it would still be substantially more than what I've got now.
I don't buy the "live life to the fullest now v. delayed gratification that you might regret when you are too old to enjoy your money" either-or discussion in this thread. I think I am living life to its fullest. I never left Texas before college. I spent two weeks on the Croatian coast in March. I was in Iceland for a month last year. I plan on driving to Marfa and Big Bend in a few weeks and will spend September in England watching a ton of Premier League and B League matches. Everyone has different desires, mine are experiences over consumer goods.
Sounds odd but I'd probably be better off financially if I was married. I tend to date professional women who have or want no kids, as well. The second income and the tax breaks would have been great. Having kids would put a dent in whatever combined worth I would have had, but it would still be substantially more than what I've got now.
I don't buy the "live life to the fullest now v. delayed gratification that you might regret when you are too old to enjoy your money" either-or discussion in this thread. I think I am living life to its fullest. I never left Texas before college. I spent two weeks on the Croatian coast in March. I was in Iceland for a month last year. I plan on driving to Marfa and Big Bend in a few weeks and will spend September in England watching a ton of Premier League and B League matches. Everyone has different desires, mine are experiences over consumer goods.
2 questions:
235k in cash...1% savings acct?
England, Iceland, etc also work trips? Otherwise how do you have so much time off?
235k in cash...1% savings acct?
England, Iceland, etc also work trips? Otherwise how do you have so much time off?
20 percent cash is fine. I am not comfortable putting more money into stocks at current valuations. Besides, cash gives me options. Can get a bigger house or buy a business without having to scramble. I bought my house for cash from the bank as an REO right when the $8k tax credit started for a huge discount because no other buyers could get financing. Would not have taken advantage without my cash wad.
Non-work trips. I get five weeks of vacation a year and I've got a ton of time banked from previous years.
Non-work trips. I get five weeks of vacation a year and I've got a ton of time banked from previous years.
fatbrucecampbell,
I've been following the same strategy you've employed since starting work in 2009 and it's worked out very well for me too. I have a few years until I hit mid-30s, but have a long way to go before I get to your net worth (although it's still sizable).
I don't have nearly as much cash on hand as you do though. Very hard to time the market and whether or not equities are overvalued. That being said, new contributions are going into international funds that have more attractive valuations.
What's your profession and how much do you make? How much do you save per year from your job?
I've been following the same strategy you've employed since starting work in 2009 and it's worked out very well for me too. I have a few years until I hit mid-30s, but have a long way to go before I get to your net worth (although it's still sizable).
I don't have nearly as much cash on hand as you do though. Very hard to time the market and whether or not equities are overvalued. That being said, new contributions are going into international funds that have more attractive valuations.
What's your profession and how much do you make? How much do you save per year from your job?
I'm a coder/editor/manager for a national business media company. I would say more but it's a niche role that is easily identifiable, sry. Pay has ranged from $70,000 to $120,000.
Agreed that timing the market is foolish but I'm not timing the market, I simply do not feel comfortable putting new money in at this time. If I were timing the market, I'd be selling my existing holdings, not letting it ride. I'm already too heavily allocated in stock, anyway, 80 percent is borderline greedy. I remember the wealth destruction in 2001 and 2008, it taught me to value cash.
Agreed that timing the market is foolish but I'm not timing the market, I simply do not feel comfortable putting new money in at this time. If I were timing the market, I'd be selling my existing holdings, not letting it ride. I'm already too heavily allocated in stock, anyway, 80 percent is borderline greedy. I remember the wealth destruction in 2001 and 2008, it taught me to value cash.
Bumping this thread.
This thread started back when I was finishing my senior year at A&M, and it made me excited for what the future may hold. I knew it would be a long process, but seeing you like minded people made me realize that one doesn't have to spend to be comfortable.
After graduating in May of '13, I have seen my income double, my student debt of $20K go to $0, my car loan (needed a nice, presentable car for sales) go from $19k to zero (paid off last week at 5.2% interest...), a 5 month safety fund, and my 401k go from $0 to $16k and set to be maxed out by the end of the year. With my base salary covering my living expenses and 401k contributions, I plan on putting my next commission check to a Roth IRA account to max out my tax advantaged accounts for 2015. Beyond that, I'm looking forward to expanding outside of ETFs for a little bit and doing more research on individual stocks in a taxable account later this year.
With the help of /r/financialindependence and other sites, I am able to look back and smile at the decisions I have made and the future possibilities rather than obligations. The first thread, though, that inspired me to keep my savings mentality was this one and I check back to it often. It has been great reading how well you all have done, and know that your stories helped keep me motivated to save.
Cheers to the next wave of Ags that get a chance to pursue your financial dreams, good luck to those in the process, and congrats to the ones already there.
This thread started back when I was finishing my senior year at A&M, and it made me excited for what the future may hold. I knew it would be a long process, but seeing you like minded people made me realize that one doesn't have to spend to be comfortable.
After graduating in May of '13, I have seen my income double, my student debt of $20K go to $0, my car loan (needed a nice, presentable car for sales) go from $19k to zero (paid off last week at 5.2% interest...), a 5 month safety fund, and my 401k go from $0 to $16k and set to be maxed out by the end of the year. With my base salary covering my living expenses and 401k contributions, I plan on putting my next commission check to a Roth IRA account to max out my tax advantaged accounts for 2015. Beyond that, I'm looking forward to expanding outside of ETFs for a little bit and doing more research on individual stocks in a taxable account later this year.
With the help of /r/financialindependence and other sites, I am able to look back and smile at the decisions I have made and the future possibilities rather than obligations. The first thread, though, that inspired me to keep my savings mentality was this one and I check back to it often. It has been great reading how well you all have done, and know that your stories helped keep me motivated to save.
Cheers to the next wave of Ags that get a chance to pursue your financial dreams, good luck to those in the process, and congrats to the ones already there.
quote:Just for the sake of conversation, I'd disagree with this somewhat. Our net worth increased in about 9 years by over $700k, and that was working for someone. It all depends on what you have going out. Having a nice income helps, but sometimes you're not in control of that. What you are in control of is what you have going out. We've always been pretty frugal. We've always lived well beneath our means, paid our cars off, didn't take on any expensive commitments, etc. When we purchased our homes, we purposely looked for value. We'd buy inventory homes that didn't quite meet every criteria we would have liked to have, but was still suitable for our needs. When it would come time to sell those homes, we'd sell them for sizeable gains because we got them at low price points. The home we're in now, we picked up for about $80/square foot. Today we could sell for about $130/sq. foot.
Everybody I know that has become a millionaire did so because they started their own business. You're not going to get rich working for somebody else. They said it takes hard work, ability to take risks, and a little luck.
My wife is a stay-at-home mom. I've been the only one to hold down a job/paycheck. My point is you can get there by working for someone else, but it takes discipline and sacrifice.
Some of you guys are very impressive. Congratulations. My biggest vices are food and travel. Being a military brat, I get itchy feet and have to travel at least once a year. We drive paid off cars and live in a nice, but affordable home. I don't have a lot of cash in investment. I put away around $700 per month. Lots of my "wealth" is tied up in my business, which profits about $200k per year.
I got into a rental property this year. I own it free and clear. It's in bad shape, but I'm using the renter's money to fix it up. I am now using that property as collateral to purchase a commercial lot. I hope to pay the lot off in 2 years and use the lot and the house as collateral to build an office building for my business and tenants. Once I get that built and paid down a bit, I'm going to use it as leverage to buy another lot...rinse and repeat.
id like to get strictly into commercial real estate. The funny thing is that I spent my whole life getting into my career and spending my whole career trying to get out. Just too much stress.
Knock on wood to all of this.
I got into a rental property this year. I own it free and clear. It's in bad shape, but I'm using the renter's money to fix it up. I am now using that property as collateral to purchase a commercial lot. I hope to pay the lot off in 2 years and use the lot and the house as collateral to build an office building for my business and tenants. Once I get that built and paid down a bit, I'm going to use it as leverage to buy another lot...rinse and repeat.
id like to get strictly into commercial real estate. The funny thing is that I spent my whole life getting into my career and spending my whole career trying to get out. Just too much stress.
Knock on wood to all of this.
We just decided to lease our house out while we're away from it for awhile. An extra 2600 a month won't hurt my feelings any. Not sure what I'll do with the extra income, probably buy more guns, ammo, and magazines. Those will have a higher ROI than most anything else come next election panic. Inching closer to the goal of this thread.
First off, I am glad this thread has kept on for almost three years now. I am also very appreciative of all those who have contributed.
I thought I would chime in and update my and my wife's status.
Since this thread has started we have:
Paid off our home, (both cars were paid off or close to it at the time the thread started), purchased two rental properties (one single family, and one duplex). We paid cash for the duplex, And owe approximately 57k on the single family home.
That is the financial progress we have made, as far as other news I left my previous job in O&G a little over a year ago. Took a huge pay cut, but I am home every night now and the wife is a big fan of that. We also added kid #2, so daycare bill is going up.
We are trying to keep adding to our "machine" to increase revenue, we are keeping our eyes open for new potential rentals. Our rule of thumb is estimated monthly rent of a property should be at least 1% of purchase price. I don't know if that's the best rule, but its the one we are going by.
We are currently 30 and 33 years old. My goal is to purchase some land and cattle, and between that and our rentals be my "job" by the time I am 50.
Please continue adding to this thread. I enjoy seeing the new updates and everyones success.
I thought I would chime in and update my and my wife's status.
Since this thread has started we have:
Paid off our home, (both cars were paid off or close to it at the time the thread started), purchased two rental properties (one single family, and one duplex). We paid cash for the duplex, And owe approximately 57k on the single family home.
That is the financial progress we have made, as far as other news I left my previous job in O&G a little over a year ago. Took a huge pay cut, but I am home every night now and the wife is a big fan of that. We also added kid #2, so daycare bill is going up.
We are trying to keep adding to our "machine" to increase revenue, we are keeping our eyes open for new potential rentals. Our rule of thumb is estimated monthly rent of a property should be at least 1% of purchase price. I don't know if that's the best rule, but its the one we are going by.
We are currently 30 and 33 years old. My goal is to purchase some land and cattle, and between that and our rentals be my "job" by the time I am 50.
Please continue adding to this thread. I enjoy seeing the new updates and everyones success.
Gig Em
at the start of this thread I was at 149K today up to 393K net worth.
I'm 31 and at the current rate my wife and I will have reached the "millionaire" status before 35.
A. My college was paid for via GI Bill and my wife's was paid for by her grandfathers trust. So we had zero college debt.
B. My wife has a well paying job ~ $120k
C. My father and I bought and built up our first pawnshop in 2009. Because he doesn't take a cut and I take a very small amount we've been able to pay off ~$500k in debt in less than 5 years and enabled us to once again use my fathers assets plus the equity in our current store to buy another pawnshop along with its property as well as our first pawnshop's property that we were paying $42k/year on rent. We're currently on track to payoff 1.27 million in debt in the next 5 years where we would then have two producing pawnshop's, two commercial properties and two rental properties debt free. Knock on wood.
D. We plan to keep buying and producing pawnshop's.
E. Hard work, sound decisions and capital capital capital.
I also envy folks who can go home and forget about work. I worry every single day, but I also love it.
A. My college was paid for via GI Bill and my wife's was paid for by her grandfathers trust. So we had zero college debt.
B. My wife has a well paying job ~ $120k
C. My father and I bought and built up our first pawnshop in 2009. Because he doesn't take a cut and I take a very small amount we've been able to pay off ~$500k in debt in less than 5 years and enabled us to once again use my fathers assets plus the equity in our current store to buy another pawnshop along with its property as well as our first pawnshop's property that we were paying $42k/year on rent. We're currently on track to payoff 1.27 million in debt in the next 5 years where we would then have two producing pawnshop's, two commercial properties and two rental properties debt free. Knock on wood.
D. We plan to keep buying and producing pawnshop's.
E. Hard work, sound decisions and capital capital capital.
I also envy folks who can go home and forget about work. I worry every single day, but I also love it.
I 100% agree with this. Rentals are going for crazy money right now.
This thread is a gem and one that is very motivating to hear about all the different stories and successes people have had in paying debt off.
I know the whole net worth argument of assets vs liabilities to determine your net worth, but do you take into account the amount the house, car, etc. has appreciated/depreciated since you bought it in making these assumptions? Or do you just look at what you have paid off as part of your equity now and what the remaining liability is?
I know the whole net worth argument of assets vs liabilities to determine your net worth, but do you take into account the amount the house, car, etc. has appreciated/depreciated since you bought it in making these assumptions? Or do you just look at what you have paid off as part of your equity now and what the remaining liability is?
I think you look at it as what you could realistically liquidate your assets at. I count the "value" of my house less the remaining mortgage. I know to sell would cost 6% or so in fees.
quote:
This thread is a gem and one that is very motivating to hear about all the different stories and successes people have had in paying debt off.
I know the whole net worth argument of assets vs liabilities to determine your net worth, but do you take into account the amount the house, car, etc. has appreciated/depreciated since you bought it in making these assumptions? Or do you just look at what you have paid off as part of your equity now and what the remaining liability is?
I only look at " real" assets. No " stuff"( cars, guns, gems etc) . I also don't use equity since it is not a stable number only an educated guess.
This gives me an automatic safety cushion I the event of a problem.
If I can reach my goals by not counting these assets I feel very comfortable
Was trying to estimate return on a possible rental property last night. Didn't seem worth it. I was getting just 5 to 6% on rent, not yet subtracting any maintenance. Maybe throw in rising value over time to get 12%. For that return I'll stick to stocks, i think I can do better there.
Thanks for the replies. I was curious as everyone is saying that they want to reach Millionaire status and what that actually meant as far as how they are treating some of their appreciating/depreciating assets. I know what I have in true assets but the house / cars / diamonds / jewelry / etc is where I was curious if everyone was documenting that in their valuations.
quote:
Was trying to estimate return on a possible rental property last night. Didn't seem worth it. I was getting just 5 to 6% on rent, not yet subtracting any maintenance. Maybe throw in rising value over time to get 12%. For that return I'll stick to stocks, i think I can do better there.
Depends on where you're buying. If you can tolerate slumming it up on some $50-$70k houses you can do a lot better than 6%. I wouldn't get into the rental business for 6%...in fact, I don't think anybody would. I'm curious to see your numbers on that.
quote:
Thanks for the replies. I was curious as everyone is saying that they want to reach Millionaire status and what that actually meant as far as how they are treating some of their appreciating/depreciating assets. I know what I have in true assets but the house / cars / diamonds / jewelry / etc is where I was curious if everyone was documenting that in their valuations.
I didn't, but I think it would be silly not to include the equity you have in your home even if it isn't a liquid asset. If you have a 1 million dollar home where 2/3's of it is unencumbered then that's a pretty good chunk of money not to include.
quote:Could you, would you sell it if you decided to without it negatively affecting you?
I know what I have in true assets but the house / cars / diamonds / jewelry / etc is where I was curious if everyone was documenting that in their valuations.
A stack of Glock pistols, count it. Grandpas gun that you would never sell, dont count it. An extra vehicle thats a toy, count it. Your daily driver, don't. A bag of gold jewelry, yes. Your wifes wedding ring, no. Etc.
Some of the worlds wealthiest people store massive wealth in things like fine art. Second only to real estate. They know they can sell it if they need or want to and yes it should be counted towards their net worth.
Great summary of what you would count. $1MM is just the beginning of the long term goal so while I want to get there as fast as I can, I'm going to enjoy a few things here and there along the way. Thankfully I bought a house in the market crash and the house has appreciated quite a bit to help there. Pulled out quite a bit of cash waiting for the right time to buy back into the markets and patience will hopefully get me there.
I figured up our ROI on our rental properties as best I could. And all three are between 9-10%.
Kinda hard to figure repairs since untill after they are needed. I just included Insurance, Taxes, and Management Fees because I know they are every month.
Kinda hard to figure repairs since untill after they are needed. I just included Insurance, Taxes, and Management Fees because I know they are every month.
9-10% is decent but I've always been able to beat that with low cap stocks.
Thanks for that reply. I've posed the same "what is the ROI on rental properties" question different ways on different threads and at different times, and that is the first time anybody ever gave a straight answer. It seems like everybody that's doing it believes it to be a good investment, but nobody can ever tell you what ROI they're making. That seems to be a very strange (and borderline reckless) way of investing to me
Thanks for that reply. I've posed the same "what is the ROI on rental properties" question different ways on different threads and at different times, and that is the first time anybody ever gave a straight answer. It seems like everybody that's doing it believes it to be a good investment, but nobody can ever tell you what ROI they're making. That seems to be a very strange (and borderline reckless) way of investing to me
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