Teach Children This Wealth Building Strategy!
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What’s going on everybody? Rob from Feedbackwrench. Today I want to talk about what is the number way that a young person can get ready to be financially free. It’s a little bit unique, this isn’t something that you usually think of, and you’ll hear about it on my channel a lot, but it’s because I’ve seen it, I’ve lived it, I know that this works. If you’re a teacher, if you’re a parent, if you are a mentor to young people and you want to get them set up properly for the future, besides integrity, besides continuous improvement, besides taking feedback and getting mentorship, besides all of those core things, I’ve got something here for you and I tell you what, over the last 35, 45 years, we have seen that college education has its benefits but it’s also become very expensive.
So if you’re an adult trying to advise young people about how do you set yourself up for a successful career in ten years, sure college education might be one option, but I’m going to talk to you about something that anybody can do, to be in a position to have some business ownership and an investment that’s absolutely stellar, so here’s the deal.
What is The Best Business and Investment for Young People: House Hacking
When you’re young, you need to go get a job and you need to save some money. None of you want to do that, none of you are inclined to do that, but if you can do that, if you can get in a position to save monthly an amount of money, and I have a number that I think would be worth it, but first I got to talk to you about what the end game is. Imagine for a second that you get involved in an investment where all you have to do is come up with a very small amount of money, maybe $20,000, which sounds like a lot of money, but not when you think about, if I save for a couple of years from the ages of 15 to 22, I can come up with $20,000 eventually. Sounds like you never could, but I’m telling you you can. You can save that up, it’s not impossible.
But imagine if you put $20,000 down and then for the rest of your life, you never have to pay rent again; you live for free. Not only that, but if you do it right, after living there for about a year and a half, living for free, having somebody else pay your rent, you would be able to step out and buy another system that would be able to pay for you. And I won’t sit around and play games with this, if you’re looking to have financial success and freedom, one of the most powerful tools that you can invest in, financially and for flexibility, rather than buying a town home, rather than buying a condo, rather than renting, is to buy a small multi-family home like a duplex, triplex or quad.
$22,500 is a 7.5% Down Payment on a $300,000 Home! Save $125/week for about 3.5 years will get you there. $18/day get’s you there!
Duplexes, triplex’s and quad’s are very interesting properties to own. The reason why they’re so interesting, so here’s what happens when you normally invest, these are different. Small multi-family duplexes, triplex’s or quads are totally different to regular investments. Regular investment property, you know what you have to do to buy a regular investment property, one you have to have enough income to borrow against and get a mortgage, but two you have to come up with 25% down payments on a home. If you’re buying a $250,000 to $450,000 house, those are big down payments. I think it’s really, really hard to do that. But with small multi-family you get to buy them if you want to owner occupy them. You get to buy them with regular financing. I’m going to go over and over and over on this. You can use a traditional mortgage to buy a duplex. You live in one side and rent the other side out. Now every market is different and every property you buy has risk, yes. But imagine for a minute that you save up, you just work diligently at anywhere between, some are interesting and some are crappy. And rather than getting into $80,000 worth of school debt, your initial push that you do, is you work, you go to community college and you try and save couple of hundred bucks a month; you try and do whatever you can so that you can get that down payment.
Now here’s what’s amazing about this, remember you always need a down payment and income and creditworthiness to actually get a mortgage, but here’s what’s really cool about this, there are programs like in Minneapolis and St Paul here, where duplex’s are, if you’re a veteran, and maybe that’s something that veteran’s can do, if you’re part of some different opportunity credits out there, you can buy a duplex for no money down. You’ll have to pay what’s called PMI and it’s more expensive in the long run, but you can have no money down, 3.5%, 5%, 10% down, you can buy a duplex for very little money and as long as you’re owner occupying it, you have a ton of flexibility.
I’m telling you if you can get involved and manage it properly to own one side and rent the other side out, where your mortgage will be paid for you, you’ll have financial freedom and then any money that you’d be putting towards housing and renting, you’d be putting in your own bank, you’re earning equity, it’s an amazing thing. But after one year, you could pull out of that, and buy another one if you can get another down payment. So I’m telling you, if you’re a teacher, if you’re an adult, if you’re a parent, and if you have young people that are trying to think what am I going to do? I don’t know if college is right, what should I do financially? Have them start saving for a down payment for a small multi-family.
I know a couple of groups that work with these organizations that are phenomenal. The duplexdoctors.com and sidebysidere.com, so you have the Duplex Doctors and Side by Side Realty, both of these people do amazing work with multi-family units. I trust them both. They’re both in the twin cities here, but I tell you what, you check that out, you’re going to have a ton of success.
Hope that’s helpful.