Now that I have a moment to sit and reflect, I’d like to dive a bit deeper into my current circumstances and where I currently stand on my journey.
As of my last assessment, my current net worth is north of $200,000, with my ultimate goal set at $1,000,000, obviously. A significant portion, over 60%, is invested in real estate, while the remainder is predominantly in stocks, awaiting strategic moves, and a small fraction is set aside in savings for unforeseen emergencies or opportunities.
How I Attained My First Quarter Million Real Estate
My venture into real estate began during my final semester of college. Feeling a bit behind in life at 24, I aimed to graduate with a tangible asset—a home. Despite limited options, I secured an FHA loan for a property valued at $127,000. This humble home served me well from 2018 to 2021, witnessing substantial appreciation and refinancing to a favorable 3.25% interest rate. It remains my top-performing asset, largely due to its longevity in my portfolio.
Subsequently, I entered into a 50/50 joint venture with my stepfather, acquiring two additional properties; one in 2021, the second in 2022. While the first proved successful, the second was less fortunate—ironically, it’s where I currently reside.
Retirement Accounts
Contributing 17% of my paycheck to my employer’s 401k, matched at 4%, may seem futile to some. However, beyond mere financial gain, it serves as a psychological tool. With reduced immediate income, I’m incentivized to work harder and longer. Moreover, it compels me to explore new revenue streams and maximize existing funds. Also, from early 2021 until late 2022, the market was flat, so I wanted to make sure I put as much money into it as possible to enjoy the returns when the next bull run hit.. which it did, and those accounts grew handsomely. Additionally, have a Roth IRA that I have automated to take 50 dollars a week from my checking account. It has been set that way for years, and it is something that I do not pay too much attention to.
Other Assets
I keep a small portion in cash unless I know I have a move that I am about to make. If I find myself in a limbo phase, I deploy all my saved money across various brokerages. Crypto used to be another one of my favorite assets but much like many people in the space, I got burned by FTX. We live and we learn.
In essence, my journey towards financial security is multifaceted, blending strategic real estate investments, diligent retirement planning, and prudent asset management.
Ways I got burned
I would have probably had an extra investment property or 2 had it not been for some dumb decisions that I made throughout this journey. However, I acknowledge that such missteps are inevitable in this process, and I anticipate making more. One regrettable move was my gamble into crypto, as mentioned earlier, and another was my involvement with AMC during the GameStop frenzy. These ventures resulted in losses of $17,000 in AMC, $5,000 in crypto, and additional losses from ill-advised option trading attempts. The combined losses could have funded the acquisition of another property or two, but instead, they were squandered in pursuit of quick riches. Despite the setbacks, I don’t regret these experiences; they served as invaluable lessons. While I recognized the folly of my actions, I naively believed I could outwit the market. Experience, however, proved to be the ultimate teacher. The way I look at it, some people pay much more than what I lost for a useless college degree just to end up working a normal entry level job.
How I Accumulated Capital
The way I acquired most of my money to invest was the traditional way; by pulling myself up by my bootstraps and going to work. I worked every single day until I got myself out of debt. Although I still carry student loan debt, I channeled my earnings into the stock market instead of immediately paying off the loans, especially with payment deferrals during the COVID pandemic. While my girlfriend and I indulged in occasional trips and leisure activities, my focus remained on working diligently. At one point, I juggled three jobs, dedicating all my time and energy to the prize.
Presently, I’ve scaled back my workload slightly, utilizing the extra time for continuous learning. This includes formal education, as well as extracting knowledge from online sources like YouTube and interactions with people I encounter. I’m in a phase of experimentation, seeking to formulate a robust plan for advancement.
Despite the apparent simplicity of my approach, it demanded significant discipline. Moreover, it subjected me to criticism from those lacking ambition, who urged me to slow down. My advice is that when that happens, I need to step on the gas even more.