How to Become a Millionaire on a Middle-Class Salary
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- Опубликовано: 27 июл 2024
- If you’re wondering how to become a millionaire, without the 60+ hour/week lifestyle, talk to Adam Zaleski. Adam knew from the beginning it was more important to make long-lasting, intelligent financial decisions, instead of chasing after a bigger salary. He did this right out of college, taking a serious pay cut to live in a state with far cheaper housing, allowing him to house hack, build wealth, and reach financial freedom.
Now, Adam is looking to expand his real estate empire a little further, without having to sacrifice a large amount of time to do so. If you’re interested in partnering up with Adam or looking to chat about long-distance real estate investing, market analysis, or the best surf spots in Kauai, shoot Adam a message on BiggerPockets!
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How I Built 7-Figures of Wealth on a Working-Class Salary:
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Episode 251
Show notes at: www.biggerpockets.com/moneysh...
0:00 Intro
4:03 Promising Himself to Never Argue Over Money
7:45 Critical Thinking Through College
13:52 7 More Years of School, $50k More in Debt
22:53 Turning Down a Pay Raise to Invest
27:40 Buy Good Assets, and Hold Them
45:08 Another Move, Another Home Purchase
52:28 Adam's Other Investments
54:30 The "Passive" Income Lifestyle
59:26 Plans to Build More Wealth (While Working Less)
1:09:51 Famous Four
1:20:16 Reviewing Adam's "Rich Professor" Story
Love that statement: who wants to brag about working 50-60 hours a week? - I’ve been doing it all my life and it is a total burn out. Good statement.
Hello there. Three things that I forgot to mention in the podcast. One, from August 2011 to 2021, we averaged 90K/year of gross income (including rental income). Two, during the same time our net worth increased from zero to 1.2 million. If you deduct 7% (150K) in transaction fees to sell all the real estate, we would be left with 1.05 million. Three, my wife worked 46.5/hour weeks at her corporate job from August 2011 to May 2015. She has been working part-time (10 hours/week) for the past 6.5 years. Our son was born in May 2017. Thank you for the opportunity to share my story. I hope others can get some value from this interview.
When will you no longer be leveraged? Or will you always be in some type of mortgage?
You absolutely brilliant
I also know several Loan officers that can assist
@@richsamuel2922 I'm currently at 51% equity for my rentals and 38% equity for my primary. For my rentals, my comfort zone is 50% to 75% equity. In the future, I will probably have a few rentals paid off. However, I doubt I will ever be completely mortgage free.
@@moneytalkswithjonathanthom4150 Could you send me a message on bigger pockets? It's been very difficult to find a mortgage broker licensed in all 3 states (CO, FL and HI). Thank you.
I like ms. Mindy, she’s awesome. Great personality and a very understanding individual 👍🏾
I always have been interested to visit United States of America I hope one day I can meet some one from there and get invited to meet that beautiful country, greetings from Mozambique!
How is the real estate market in Mozambique?
This was very inspirational. He is very determined and very goal driven.
This is the most I have ever related to a guest! I’m also a college professor and like my lifestyle so much that I don’t want to switch to a field that may make more money. I actually make quite a bit more than him in a small town in Ohio so my cost of living is good and I currently have rental income that pays some of my bills. I came out of a divorce in recent years so paying off the debt from that and plan to build my portfolio at 50 years old. Loved hearing his story!
So glad that you enjoyed my story and were able to connect. Colorado is 48th in funding for higher education. It's not a very good ratio of faculty salary to cost of living. I was a finalist for jobs in Arizona and Michigan, with a better ratio. However, I am much happier in Colorado with the mountains and being closer to my wife's family.
always awesome content! one day I'll be in this podcast 🙋🏾♀️
Great stuff! Thanks for the solid content.
Wish I could tell folks this: NEVER sell a house you own. If I had kept my houses - even just the last two - I would be a millionaire. I would tell every young person to always keep your houses - unless the neighborhood is going down hill - but otherwise, keep your homes as rentals. By age 55 or 60 - you will be a millionaire.🤑
I agree. Its not that complicated.
I love Bigger pocket and it’s content. However, these videos are getting too ridiculously long. I watch the Regular BP and the Rookies BP and tend to skip this one because of its length.
Increase play speed
@@jazminsandoval7813 I always do. 2x speed should not be almost 45 mins long still
This is a rockstar episode. Adam is fantastic.
@wbcoll01 Thank you for the kind words. I will send you that $5 via Venmo later today.
One must have a clear plan ready for the money before selling a positive cash flowing asset
I agree 100%. I'm not selling any of my rentals unless they go directly into another asset. I don't want to pull my money out of a leveraged real estate deal and have it sit in the bank, even if it's making 5%.
Grad school salary and taking on debt . . . been there, done that. Such a late start on my financial journey. The next obstacle was working year-round for several years in a 9 month-a-year job scrambling to get tenure.
I Retired at 36 on SSDI
I want to do this so bad and I'm ready to purchase my first investment home, I live in the midwest and I have no idea where is a good market around here. I'm in Iowa but should I look for good neighborhoods in a big city? Or areas in up-and-coming cities/towns?
Message me on the bigger pockets website and I can give you a few ideas on how to get started.
Just curious: how did he qualify for a house in Hawaii for $620,000 making less than 100k?
Great question. I put 20% down on a 603K house. My PITI was $2675/month. To qualify your debt to income needs to be less than 45%. You need $71,400/year of income to qualify for a $2675/month mortgage. Some lenders let you go up to 49.9% if you have large balances in retirement accounts.
He also could show he was planning to rent out the basement rental
I don't think lenders can count the basement rental income to qualify for the mortgage because the house isn't an official duplex. Renting out the basement is like taking on a roommate. Maybe they can count the income if you already have a signed lease? The basement needed to be remodeled, so getting a signed lease before closing wasn't really possible. We did a 6 month remodel and got a couple living in the basement unit immediately after the remodel was complete. @@cherylbisera5039
My mother and father earned a combined 3.1 million in their careers. My mother was an entrepreneur and had a business typing college papers and copy service before Kinko's came into existence. My father was a Civil Engineer and he earned two pensions. They both saved and invested a smaller percentage of 5 to 10%. I have worked and earned 80k to 180k per year for 25 years so far in my job as a critical care nurse and I save and invest 10 to 25%. Adding together what I inherited and invested my net worth at the age of 54 is 2.7M. There is a history of my parents and I working a lot of overtime. In hindsight I think there are ways we could have been smarter but I see that my parents did a decent job as they had comfortable retirements with half left over to pass on. I love my job as a critical care nurse so I will keep working but reduce hours gradually until I want to retire.
Yes, reduce the hours to increase your quality of life and extend your time on this earth. Don't stop doing what you love. Just do it on a more balanced schedule as you age.
I grew up in Lake Bluff! Where were you?
60060!
I love Mindy but the focus is waaaayyyyyyy too close on her face....... We don't need to see that much detail.
I second this
Florida is dropping insurance on property
Yes, insurance costs are going up. Over the past 3 years my home insurance increased from $950/year to $1450/year to $2166/year and now $3250/year post hurricane Ian. However, during the same time the rent increased from $1850 to $2550, so the cash flow is still better in 2023 than 2020.
Take loans, that’s how
That is a good point. It also helps when rates are low.
❤❤❤
He needs to read the strait path to real estate wealth.. Kris Krohn
I see many red flags based on his content. To anyone following his advice, I would use extreme caution. There are many different paths, so it's possible his advice could work for some. However, his path is not for me.
Personality is genetic? 🤔
Yep. It's mostly genetic. Environment has less influence. If personality was more environmental, we would have very similar personalities as our siblings because we share a home. For many people, that is not the case. For further interest, read any textbook in Psychology of Personality or read through the peer-reviewed research within Psychology of Personality.
@@adamzaleski5772 super interesting! Always thought nurture had more influence than nature will def look it up thank you for clarifying!
1:18:18 - 😂
I wonder if his Florida house survived the hurricane.
Great question. My Florida house is 3 miles from the beach and was not impacted. One month post hurricane market rent increased from $2450 to $2850.
@@adamzaleski5772 Thanks for the reply.
@@Mysticaltyger We are about 15 months post hurricane Ian and in my opinion, market rents have stabilized due to homes being fixed. I would estimate current market rent for my Florida rental to be $2650/month. I'm currently getting $2550/month.
I would not want all those mortgages and than keep getting more mortgages. It would make me too nervous. I have alot of peace being debt free.
40k job with a doctorate ugh.
I took the lowest paying job available because it was in Florida during the biggest housing market crash in the last 50 years. The job also had 20 weeks of vacation. I had the option to make 100K/year in a corporate job working 50-60 hours/week with 2 weeks of vacation. I chose the first option.
Anyone buying rentals in a place you don’t live is just not capable of planning properly. You gonna fly to hawaii to do yard work. Ridiculous- hire somebody. I would never take financial tips from this person. It’s awful.
Different people have different strategies. When I no longer enjoy traveling to Kauai, I will probably hire someone. Good luck to you.
I'm going to Kauai for spring break for 10 days and staying at my rental because I'm in between long-term tenants. I have about 10 hours of landscaping to do. It should be a pretty fun trip.