FREE ADVICE FOR ALL NEW GUYS but ONLY 1 out of 100 will follow it!!

[aares]

fdjake,

Where are all the new guys?  I thought they would be answering you by now, saying "I get it! Thank you, I get it!"

I really enjoy the posts of people struggling and starting out with nothing. We can all relate.

Come on, you newbies...we want to hear that you:
opened a savings account
took a second job
took a first job
moved to a cheaper house
sold the Hummer
cut up your credit cards

Tell us how you are putting yourself on the path to financial freedom.

Furnishedowner

Alright!

-I opened up another savings account about 5 months ago...this is only to put money IN. No money has came out of it for the entire time it was open.

-I have a part time job on the side in which I get about $300 a week, under the table. I put all of that into the savings account. I made $400 last week and that was all put in that savings account, so I am stashing 100% of my part time money.

-For the past 5-6 months, I have gotten a total of 13 collection accounts removed from my credit report, and I had a TransUnion FICO score increase of 144 points. I am also working on my Experian and Equifax reports. This is all in an effort to obtain the best looking credit report I can possibly have which will help me immensely I believe.

Other than that, I have nothing else that I have done. I know I should be doing something, but I dont know what THAT is.

Thank you guys, and fdjake for your ridiculously awesome posts. You guys are really good people, and it would be an honor to meet you guys (you know who you are).

[TXRehabber]

Great post,

I have taken on a second job, saving all that income, bought my first rental property using Mike's formula (50%), in the midst of fixing it up myself to save money on the repairs.

Once the repairs are done, I will refinance at 80% ltv get my initial downpayment back and redo it all over again

I have no debts but our mortgate, my credit card utilization is down to 5% of available balance. Credit score is slowly climbing to the upper 700's which makes it a lot easier to get financing.

All I need now is for my wife and kids to realize that me being away from home now will greatly benefit us all down the road...

[furnishedowner]

TX Rehabber:

You've got to build in some reward for the family to get them on your side: "kids! Today if you help Daddy work in the yard at our rental then we go to the pool!"

Military Matt:

There is another military guy posting on these sites who has a 6-plex and is buying more. I think he is in Afghanistan. You may have a lot in common with him.

Newbie men and women:Great job those of you who are saving, studying and working. One year can bring a lot of change.

[TXRehabber]

Thx Furnishedowner,

I did this last weekend, we all went to the pool, this week I am taking the oldest two to see the Narnia movie...

I have to put some family time in there, even if it means the repairs will take a week longer. no wealth in the world is worth as much as the wifey and kiddos (I am getting soft as I get older I know) 

[justin0419]

Furnishedowner,
Yeah, overseas now...not quite in Afghanistan, but who knows..I may have to spend some time there too before I end my whirlwind desert tour.  I'm already working on the wife about buying a duplex, 8-plex, and a different house for us once I get back.  Having my family stay with our parents while I'm gone is working wonders on getting bills paid.  I'll be in a very different and better financial situation when I get back to US soil.
ashtaz82,
feel free to PM me by clicking on the link at the top of your page if you have questions.  I started out as an E-3 in '97.  I'm an O-3 now, so life is much different.  I could've made more flipping burgers when I started this venture.  Good luck and welcome to the board.

[lb12]

thank you all (and fdjake especially) for this thread!
for us newbies that ARE going to make a future in REI happen, it keeps us motivated.

i have been taking the 'boring' route for 6 months now, and by mid-december i will have paid off $21K in debt (credit card, auto and school loans). and that will be everything! that's 29% of my gross income. 10% is going to my 401K. after it's all said and done, i'm living pretty small. it's amazing the cuts you can make (dinners & drinks are huge alone!)

next goal for '08: a second job related to real estate to further fuel my education (and my savings)
2009: $25K in emergency fund savings that i know i should have.
2010: buying a primary residence. i'm in so cal, so hopefully we'll be looking at a better time to buy in.
2011 and beyond: buying investment properties!!

whew, it's going to take a while, but i'm keeping my eyes on the big/end goal. eventually becoming a full-time REI!
it's not easy, certainly not overnight and it takes a LOT of discipline.
and sometimes it's hard to explain to the coworkers and friends why you can't go to that friday lunch/movie/happy hour, etc. but, it's getting me that much closer to my goal. and that's all that matters.

thanks again to this site and all of the contributers!

[cathytxre]

I’m new to real estate investing.  Actually, I’m not an investor as the only real estate I’ve purchased has been my own home.  I found this board about 3 months ago and started reading the posts.  I’ve also bought a few books on real estate investing, landlording, finance, etc. 

I firmly believe in fdjake’s advice.  It doesn’t matter what you want to do in life, but you better have some type of plan to get there.   What have I done to attain financial freedom?  First, I got a good job with a good employer that had benefits.  I save money from every paycheck above and beyond my 401k.  I’ve been working for longer than some of the others on this board so I’ve got some cash reserves.  Now, I’m looking for something else.  I’ve eliminated franchising.  I spent about a year researching franchises and never found one that seemed worth the huge franchise fee.  I want to be self-employed not franchised.  I’m interested in RE.  I’ve owned two homes and both were fixer upper’s.  The first one I bought and fixed up with the intent of re-selling.  I lived there for about 5 years and got a big down payment for my second home.  My current home is also a fixer upper, but I’m fixing it up with intent of living here permanently.  I love it, and I’ve also started a small business from my property that provides a decent second income.  I’m leaning towards landlording as a RE choice and would like to eventually get into commercial.  I can see me owning a small office building or a strip, shopping center.  For now I’m looking at residential properties.  I have a 10 year time frame to become self-employed as I’m well employed, and I don’t have the “attitude” that working 9 to 5 is the worst thing that can happen to a person.  In fact, I’m counting on my steady income to help me get the bank loans that I’ll need.  I’ve given myself one year (end of July 2009) to find my first property.

[j1dias]

Great topic and advice...

My wife and I decided to move to a townhouse and sell our suburban house. The plan is to use the equity we have to buy a townhouse free and clear. Use 25k we have in savings to buy an investment property to rent using Propertymanager's 50% rule. Over the weekend I did some financial analysis and projected my financial plan/cash flow over the next 12 years (time I am estimating it will take me to replace my current income with passive income from the rentals).

It was a very interesting exercise to do this 12-year analysis. I recommend to anyone that is working on becoming more disciplined with money to invest some time planning for the future. It is a great way to keep motivated.

Have a great day!

[justin0419]

j1dias,
Very true about having a plan and putting on paper what you want for your future.  I'm trying to replace my current income over the next 9 years, so I can retire from the military and do REI full time.  As a note for discipline, I track my bills/IRAs/529s/etc in an excel spreadsheet.  Nothing fancy...on one sheet, I list all my bill balances, min payments, due day of the month in a table at the top.  I also list the interest and principal paid to the appropriate bills.  I total the min. monthly payments to show my obligations.  Below the table, I keep a running tally in the columns of my total debt, amount paid on debt, and debt goal.  By doing this, I can see how far I've set myself back when I make a large purchase.  It's almost like the difference between paying cash and seeing the cash leaving your hands or paying by card.  I do the same tracking with the IRAa and 529s to track performance over time.  I just think by looking at it and keeping it updated keeps you true to your goals.  It's empowering to see things coming down as planned.  If I get off track, it's disheartening and motivates me to fix it.  Our sacrifice right now is having my wife and kids stay with family while I'm deployed so we have no house payment.  We did that, got rid of the home phone, cable, dropped insurance to comprehensive only on the cars, etc. to lower our expenses.  I'm also blessed that my wife isn't one of those that deals with me being gone by shopping.  This is all helping to set us up to buy a couple places upon my return.  It's so important to put your future goals in writing.  You have to know where you want to be and set reasonable goals for getting there.  If you deviate from your plan, know why and how you'll get back on track.  Just be realistic based on your income.  If you set unattainable goals, you'll always be disappointed.  Doing analysis for the future helps you to see how acquiring properties brings you closer to your future income goals. 

[furnishedowner]

Whoops, meant to write here but instead there is a post for you newbies in "Investing Strategy".

I am still stumbling around on the computer, but getting a lot faster.
Furnishedowner

[j1dias]

Justin - I agree with your comment about setting realistic goals and tracking your performance against those goals. But I also believe that when you start you may not have all the information to be able to identify realistic goals. In this case, I believe you should set a goal and over time adjust it. This is what I did over the weekend. It seemed a little bit crazy to setup a 14 years plan. I am sure the reality will be different than the plan. I hope it will be better because I believe I setup a conservative plan. However, due to the fact that I am new to this and still learning, there is also a risk of not meeting the "conservative" goals I set for myself.

In short, I believe you need to set your goals, start executing, and then adjust as you go. And we are blessed because we have access to this great forum and to the Internet. I can't imagine having to start a new business in an area that you don't know much without access to all the information we have today. I guess there are some guys here in the forum that started when Internet and forums were not around... Kudos to them!

I use Money to track all my expenses. It is a great tool. The good thing in my case is that because I track everything in Money (and set a monthly budget) I can get my wife engaged. When we created the budget we did it together... I can't tell you how hard it was to setup those $80.00 per month for beauty stuff (nails, hair, etc... :O).

Anyway - good luck with your plans. Keep us posted.

[Vader]

fdjake, you actually brought a tear to my eye man. I really enjoyed that post, good stuff man...now about those 2000 BAD posts you made, j/k.

Keep the good ones  coming, newbies need the love.

[Hoosier4life2005]

Good post mate.

[fdjake]

Vader,

You must be talking about all those "BAD POSTS" I made 2 years ago predicting the MESS the real estate market has become and it's crippling effects on the GLOBAL economy?

Yea...sorry about that.  j/k

[John_in_NC]

I want to know when I should be buying toll brothers, centex, kb homes, etc.....