I’m a lot like Cardi Bin that song Money and I like it because like her, Now I like dollars, I like diamonds! However, in order to fund that lifestyle you have to have money in the bank.
I want deep-pockets; therefore, I avoid debt, save and invest.
And between you and me, I can’t stand debt. That’s no secret if you have been reading my blog. It just weighs you down.
I figured out a way to make myself feel better about paying off debt. I tend to use the debt-snowball method. I like small wins. And you should too, if it helps you continue to work on paying off your debt over several years, which can be 2-5 years.
The debt–snowball method is a debt reduction strategy, whereby one who owes on more than one account pays off the accounts starting with the smallest balances first, while paying the minimum payment on larger debts. You typically use this method when paying off revolving credit card debt.
Dave Ramsey discusses this and the debt avalanche, paying off debt with highest interest rate first, both are good methods of paying off debt.
But my favorite is the debt-snowball method. This strategy is where you pay off debt in order of smallest to largest, gaining momentum as you knock out each balance.
When the smallest debt is paid in full, you roll the money you were paying on that debt into the next smallest balance. You get a chance to celebrate your hard work by knocking out small debts and slowly working your way toward paying them all off.
For example, I have done the following:
Paying off my payday loan in the early 2000’s, I wrote the final check for $333.
Paying off my car note in 2009, once it got down to under $2,000, I wrote the final check for $1,500 and paid that sucker off!
Paying off my personal loan for $20,000, once I got down to the end, I wrote the final check for $3,500.
Paying off my credit card I got in 2005, once I got it down under $15,000, I wrote the final check (electronic) payment for $14,745, so then I could continue to live my best life.
I did this by saving up my money, paying the minimums on all my accounts until I saved up a certain dollar amount and then I wrote big fat checks to pay off what I owe. I like to pay in lump sums and pay off huge chunks of debt at a time. It makes me feel better. I call it the debt-chunk method. I like to see big results.
I got this idea from reading personal finance blogs like Millennial Money and books like I Will Teach You To Be Rich and Set For Life. In addition to studying the self-made. I combined my knowledge of reading about the money habits of Grammy-winner John Legend and Millennial Money founder Grant Sabatier.
Basically, I combined two different philosophies on saving and debt.
From John Legend I learned that once you have money in your hand you should pay off your debt IMMEDIATELY. If you have the full amount, then pay it all off. Thereby, paying off debt in huge chunks!
From Millennial Money I learned to save huge amounts of money over time by making small increases in may savings rate. I also make sure to take other good advice as well.
For instance, over the years, I have learned to listen to the following:
My partner Charlie says there is only three ways a smart person can go broke: liquor, ladies and leverage – Warren Buffett
Find ways to advertise for less or free. Leverage what you know by thinking outside the box. – Daymond John, The Power Of Broke
Find ways to start or build a business for less, cheaper alternatives out there or for $0 to start. – Zac Bissonnette, Debt Free U
There has never been a time when reading a book has not helped me. Work 10X harder, get 10X the results. – Grant Cardone, The 10X Rule
Work out. Have Discipline. Save and invest your money. I started in real estate and built wealth that allowed me to devote more time to the things I wanted to do. – Arnold Schwarzenegger
Try to save $5 a day. And increase your savings by 1% a month or more. Network. I bought coffee for those I wanted to learn from every week! – Grant Sabatier, Millennial Money
Save $25,000 to stop living paycheck-to-paycheck. Spend more on fun not less. Spend money on the things you care about and cut spending on the things you don’t. – Scott Trench. Set For Life, Bigger Pockets podcast
Spend extravagantly on the things you love, and cut costs mercilessly on the things you don’t. – Ramit Sethi
Focus your energy on the big wins!
If you can cut your housing and car costs, your stand a chance to save $500 or more per month. That is a nice amount to start stashing away in your 401k.
Cutting out $5 lattes and couponing alone are not going to get you to amassing a fortune. But first, before you do anything, you must save!
It is far easier to control and cut your spending than it is to go out and earn more.
Besides, the more you make the more Uncle Sam takes! I am all for people earning more money, but it will make no difference if you spend every last dime.
Therefore, start focusing on slashing expenses, cutting costs, saving an emergency fund (for big expenses), a rainy day fund (for short-term expenses i.e. a flat tire) and paying off ALL YOUR DEBT!!! Doing those five things can start you on the path from broke millennial to millionaire.
And that is because all millionaires know you get there by saving $10 bucks at a time. – Mr. Money Mustache
Therefore, if you want to get rich, just start by saving $10 bucks at a time.
You get what you give. What you put into things is what you get out of them. – Jennifer Lopez
I took this picture while I was waiting to get in to the concert.
I have learned to choose experiences over things. You put those pair of expensive jeans on a credit card and 10 years later those $80 jeans could really cost you $300 with 25 percent interest attached. That wasn’t on the price tag! Those jeans will be long gone by then, but that time you went camping with your family and friends will be great memories that last a lifetime.
In the last several years, I have decided to spend money more on experiences. After seeing that episode of Gilmore Girls Concert Interruptus, I knew one day I would go to a concert so I could be as happy as Loreali and Sookie was to go see their favorite band. Those great feelings you get from actually doing something and paying for it with cash are priceless.
That is exactly what I did on July 17, 2019. I went to see Jennifer Lopez in concert. And I loved every minute of it!
Went to the JLo concert. It was awesome.@JLo says: You can be anything you want to be with hard work.
Took this short video on my phone while at the concert.
She stopped by DC and performed at Capital One Arena after doing her make-up concert in Madison Square Garden in NY after the blackout on Saturday July 13. What a professional.
And let me tell you. I looked into what it takes to do concerts and JLo’s setlist and tour dates. Performing is grueling work.
Jennifer Lopez – It’s My Party – The Forum – Inglewood, California – June 7 2019 – setlist
Want to help celebrate JLO’s birthday with her! See remaining tour dates below. Jennifer Lopez – It’s My Party Tour dates: June 10 – San Diego, CA – Pechanga Arena June 12 – Sacramento, CA – Golden 1 Center June 13 – San Jose, CA – SAP Center June 15 – Las Vegas, NV – T-Mobile Arena June 16 – Phoenix, AZ – Talking Stick Resort Arena June 19 – Denver, CO – Pepsi Center June 21 – San Antonio, TX – AT&T Center June 22 – Edinburg, TX – Bert Ogden Arena June 24 – Dallas, TX – American Airlines Center June 25 – Houston, TX – Toyota Center June 28 – St. Paul, MN – Xcel Energy Center June 29 – Chicago, IL – United Center July 3 – Milwaukee, WI – Summerfest July 5 – Detroit, MI – Little Caesar’s Arena July 7 – Toronto, ON, CA – Scotiabank Arena July 10 – Montreal, QC, CA – Centre Ball July 12 – New York, NY – Madison Square Garden July 16 – Mansfield, MA – Xfinity Center July 17 – Washington, DC – Capital One Arena July 19 – Newark, NJ – Prudential Arena July 20 – Philadelphia, PA – Wells Fargo Center July 22 – Atlanta, GA – State Farm Arena July 23 – Orlando, FL – Amway Center July 25 – Miami, FL – American Airlines Arena
Instead of spending a fortune and being close enough to the stage to reach out and touch the artist and see the white of their eyes, I selected a seat that just fine to see how different my experience would be. My seat cost $49.95 and I have a blast!
You do not have to go in debt or sell your belongings on Craigslist or drive for Uber or Lyft just to spend $500 on concert tickets. The jumbo screens show you all the action just fine in my book.
This was also her first tour since ending her Las Vegas Residency which made like $100 million in ticket sales!
For a night out on the town it cost me about $100 bucks!
So if you want to paint the tow red, I suggest you stay in the black and pay cash and not go in the red and use credit. Cause you know your girl Greenbacks Magnet is all about saving a dollar!
If you read my tweets then you know I can’t stand debt. I would stop doing just about everything in order to save up huge chunks of money to pay off debt. I once saved up $15,000 to pay off $14,745 worth of debt! Paying debt off in chunks feels awesome.
I learned to pay off my credit card and other debt in lump sums from reading about how Grammy award-winning artist John Legend doing it after he got his first big paycheck. Smart!
Just hearing about another pro athlete going broke is enough for me to change my free willing money spending ways.
Breaking News: Adrian Peterson is in debt after making $100 million in earnings in the NFL. This is my version of Scared Straight. Scared Debt Straight that is. Is he not reading my blog?!!!
I encourage you all out there to stop what you are doing and find a way to start saving 5 percent of your income.
Start with just $500 in the bank and work your way up to one month of expenses. That Is how I went from $25 in the bank to $5,000. Save for the things you want. Paying with cash is freedom.
It’s like JLo says, “you get what you give.” You have to work for what you want. She says she gets nothing for free. And that she has to pay for everything.
The harder you work, the more you get. I’m taking my money earning and saving cues from Jlo. I like to study the self-made. And Jenny from the Bronx is as self-made as they come. So happy birthday JLo. Make a wish. I’ll tell you mine. It’s simple really. I want to always spend less than I earn. Your turn.
Like the show, Win, Lose or Draw you must decide your fate.
Financial fate that is.
Are you a fiscal gentleman or lady that manages your money well? Let this post help you out!
I do not care what anyone says or tells you, but saving is important. Supremely important, in fact. Why? Because all things first start with having money; therefore, you must save some.
Want to buy a house? You have to have a down payment. Want to start a business? You need to have the funds to pay employees and the lease on the storefront. Want to invest in your favorite company? You have to be able to put money in the brokerage account. And the list goes on and on.
I’ll give you an example of why you need to save money.
Every year for my birthday, I like to buy stocks.
Generally, shares in a 500 index fund. However, if you are broke, then there is no way to make this ice cream dream a reality.
Instead of an exotic vacation, new toy, fancy new set of wheels, or expensive birthday cake, I prefer to buy myself a $3.50 cupcake. Wait…in providing full disclosure I paid tax on that cupcake, so it really cost me $3.85.
I actually had about $500-$5,000 that I could invest. So, where did that other $496.15 or 4,996.15 go? Toward earning me interest of course!
We cannot all be like the jeopardy champ that has won a mind boggling 28 times in a row. His total winnings are now at the $2 million-dollar mark. Incredible!
However, we cannot base our financial futures on being able to answer in what year was the Louisiana purchase; 1803. Oops…I meant to say, What is 1803?
We need our money to work for us while we are sleeping.
I know the cast of Friends is still raking it in, but they are from a different time. When studios had to pay to play. That is, pay these actors on the back-end with royalties in order to get them to commit to playing the same characters for a decade or more. That is 12-15 hour days spend on a studio back lot that you cannot get back.
So I say kudos to them and the casts of the recently ended The Big Bang Theory and Game of Thrones. However, we all can’t be Starks or Dr. Sheldon Cooper, Dr. Leonard Hofstadter, Dr. Koothrappali, or Howard no Dr. in front. Just Howard. 🤣
You must save because you do not know when the next check will stop coming in. Let’s examine this further shall we? In one of my posts, I wrote about why Academy Award Winner Halle Berry saves so much.
Because if you play spin the bottle with your finances, then it tends to land on BROKE!
It is no secret that here in the good old US of A many high school and college graduates know nothing about finances. However, here at Greenbacks Magnet we aim to change all that.
That is why I write cautionary money tales like today’s post.
For more cautionary money woes and tales, you can check out more stories on my website.
So let me give you some examples of why not to depend on big paychecks, royalties, or sequin jumpsuits.
A DIME ISN’T WORTH A NICKEL It was recently reported on May 14, 2019 that Brian May said that Queen hasn’t made any money from Bohemian Rhapsody. Now that’s a head scratcher. The film went on to gross over $900 million at the box office and its star, Rami Malek, with his performance as Freddie Mercury earned him the Oscar for Best Actor.
What do you gotta do to earn a few coins? Invent the wheel. Or in this case, invent music!
In yet another tale of musicians and money, David Lee Roth of Van Halen fame said the following in a December 2018 interview, “up until 18 months ago, I was making pennies in royalty on a $20 Van Halen record.” In addition, Roth stated, “I got butchered 40 years ago. I made over a billion dollars for Warner Bros. I watched my whole fortune walk off into another man’s pocket.”
However, now that he is no longer under a recording contract and owns his own business he is, and I quote, “I’m a free motherfucker!”
This is sad and confusing to say the least. I would be a disgruntled employee too if I sold millions of albums, t-shirts, spandex leotards, and headbands only to receive pennies on the dollar!
Check out how other musicians made fame and kept their fortune.
This reminds me of what I read in Pat Benatar’s book, she stated that she made her record label $75 million dollars and she felt used, abused, and thrown away.
After reading her book, I knew I better make sure to fund my retirement account like no tomorrow. When you see people work that hard for so many years talk about getting the shaft, then you know us regular folks in the salt mines better get it together.
Don’t even get me started on all the celebrities that owe the IRS! It just goes to show you that saving money has to be a part of your financial freedom equation.
There is no financial independence when you have debt obligations. More cannot go out than is coming in.
WE ALL MUST FACE THE MUSIC
Here’s the thing. We ALL are going to stop working someday. It is simply up to you to decide what you want to and ow you want to live.
You may think that adults should know how to manage their money. However, if you never learned how to balance $100 in your checking account, then how on earth is someone supposed to earn and build a million bucks!
I work under the impression and assumption that if most people can manage $1,000, then they can manage $100,000 or more.
If I still have not convinced you to save, then just let me share this last story with you. If you saw The New Edition Story, then you know kids get ripped off too! Recording a hit album netted these kids $500 and a VCR! They decided to start taking more control of their money and their financial destiny. And you should too!
Therefore, I have chosen to be the master or mistress of my fate like Elvira is Mistress of the Dark.
I own my image, whatever I do, my mistakes and my money.
I am Mistress of the Greenbacks Magnet. I’m ready for my financial close-up like the same way model and actress Cassie poses for a shoot.
If some company goes belly up and decides not to pay out it pension, then plan to make other arrangements. I don’t want to be left holding the bag for my retirement after giving my youth to some company who tells me to invest in their stock while at the same time cashing out their own chips like Enron.
That is why I save and invest.
I increase my goals EVERY SINGLE YEAR!
Doesn’t matter if every goal doesn’t get hit, I still have something to aim at.
This is what I have decided for my future. Here’s my financial close-up. 😉
Here is a peak behind my financial savings curtains.
Ladies and Gentleman, I give you Greenbacks Magnet savings goals:
2018: $13,333
2019: $14,000
2020: $15,000
2021: $16,000
2022: $17,000
2023: $18,000
2024: $20,000
2025: $25,000
As you can see, my ultimate goal is to save $25,000 per year. That would net me $100,000 every 4 years! It is all about planning and discipline.
I do not care if your goal is to be able to make rent next month or buy a private plane next year.
Whatever you do, win, lose or save; make a goal and stick to it.
Why the difference? Because women earn on average $0.80 for every dollar a man earns.
Therefore, men have to save less and women have to save more in order to reach the same goal of fill in the blank $ dollar amount here.
WHY IS SAVING SO CRUCIAL?
No one can arrive from being talented alone, work transforms
talent into genius. – Anna Pavlov
All wealth building starts with saving.
Don’t let anyone tell you any different.
Sure you may have to invest and diversify your money such as investing in stocks, real estate, and bonds, but you have to save money FIRST before you can buy or invest in anything.
If you have ever read a Jane Austen or Charles Dickens novel, then you know the theme always comes around to money.
Considering that Jane Austen never married and Charles Dickens grew up in a poor house, it is not surprising that the authors chose to hone in on this topic.
The sorted topic of coin. Both authors are British and in that society they have a class system.
You are either born into wealth and inherit it or you must
work for many years and earn your fortune.
Many of the landed gentry lived off of their land. Profits that were made from owning land was how they made a living.
That monthly sum could be the difference between prosperity
and being locked away in poor houses, which were a form of jail for the poor.
Here in America, we do not have a class system of royalty, nobility, tradesmen, shop keepers and owners, or farmers.
However, we do have a social ranking and social class. Those are the haves and the have nots.
If you want to find yourself in the realm of having, then
you best start saving money for your future today.
Many years ago, I was laughed at for my paltry savings
amount of 9% per year.
Now I am saving over 40% of my income.
No one laughs at me now.
HOW SAVING MONEY CAN MAKE YOU HEALTHIER
They say wealth equals health. And that is an understatement
if I ever heard one.
Having money allows you to pay for all of your needs.
This includes doctor visits, healthy food, and medicine.
Eating well not only affects your waistline, but also your
brain functions.
It is said that children that do not get the proper rest,
nutrition or eat breakfast before school perform lower on tests and have harder
times concentrating.
Success depends in a very large measure upon individual
initiative and exertion, and cannot be achieved except by a dint of hard work. –
Anna Pavlov, Prima Ballerina
When you have the means to pay your bills, eat, and work in
good health; then you are fortunate indeed to be able to pay your own way.
Being able to afford your monthly nut just makes you happier
overall.
You are protected from the pitfalls of many of life’s
hiccups.
You can get just as much pleasure saving as you can from spending.
I seem just as happy being able to have the ability to
afford items than am to actually purchase them.
It is a great feeling to payoff debt. Every check you write frees you from obligation to lenders. Then your money can stop serving THEM and start serving YOU.
Make a goal to write down evet single bill you have and
person you owe.
I started doing this and tackling every debt I had one by
one.
Once I paid of my car, I owed $30,000 and my personal loan,
I owed $20,000, then things started really taking off from there.
I was able to take these monthly payments, $450 and $333
respectively, and start investing that money. Now that money works for me in
the stock market.
Here is one stock I recommend: VFINX or VFIAX. (You can also invest in the VTSAX or any equivalent)
Portfolio composition of VFIAX
Month-end 10 largest holdings (22.40% of total net assets) as of 03/31/2019
1
Microsoft Corp.
2
Apple Inc.
3
Amazon.com Inc.
4
Alphabet Inc.
5
Facebook Inc.
6
Berkshire Hathaway Inc.
7
Johnson & Johnson
8
Exxon Mobil Corp.
9
JPMorgan Chase & Co.
10
Visa Inc.
Whatever you do just make sure you not just SPEND money but SAVE money.
“There are only the pursued, the pursuing, the busy and the tired.” ― F. Scott Fitzgerald, The Great Gatsby
For many people out there I am sure you have heard of shows like Flip this or Sell that house. Many of them are broadcast on A&E. One of these gems was a show called Flipping Vegas.
The show starred real estate investor Scott Yancey and his
interior designer wife, Amie Yancey. What made this show stand out was the
outrageous personality of its star, Scott Yancey. He could regularly be seen
losing his mind over the tiniest of overages to his immensely short time table
he gave to flip any house. It made for great television. I felt it was the
funniest of all the house flipping shows out there.
Scott would regularly drive around in his Porsche (he loves
cars) and go from house to house that he had invested in to inspect properties.
His wife, Amie, could usually be found at places like Walker Zanger to purchase
materials for all of the homes they were flipping. The couple were constantly
bickering about house design, location, and finances. They were a riot.
What I remember most is that Scott was always very concerned
about the budget as where Aime was not. She believed that a well-designed home
sold itself. However, Scott did not always agree. He would regularly have a fit
if she spent extra money or over-improved a house. It was hilarious.
“When you have a
foreclosure sign on the house, it’s saying, ‘Vandals, homeless: Welcome. Please
strip it,’ ” Scott told The Las Vegas Review-Journal of the properties he
purchases. “We’re in a race to get it done and get it sold.”
So, without further ado, I give you what it’s like to flip
Vegas.
WHAT IS FLIPPING VEGAS?
“The houses that are the worst to buy are the ones we save for TV because we know there’s a great storyline with it.” – Scott Yancey
Flipping Vegas was an American reality television series that aired in the United States on the A&E network for 5 seasons from June 18, 2011 – September 27, 2014. Featuring the husband and wife team, Scott and Aime Yancey. The couple would fix and flip homes in Las Vegas, Nevada. It aired on Saturdays. And ran for 41 episodes.
Meet the real estate players
Scott and Aime
Vegas was hit hard by the housing crash of 2007-2009. Where
most saw disaster, Scott saw opportunity. He would buy low-priced and
dilapidated homes in Vegas, fix and flip them quick for a profit.
Setting a quick timetable of about 4 weeks and even shorter budgets of approximately $10,000. A quick fix schedule and low budget is called flipping. Spend less money equals more or maximum profit. His opposite is Aime, who buys high-end finishes that are not in the budget, without telling Scott. Let the fights over the checkbook begin.
Here is some of the banter on this show.
Real estate agent: Can you all this done in a week? It’s a
lot to do?
Scott: I turn and burn these suckers!
Aime: Scott, you’re so cheap.
Scott: Once again you are unconcerned with deadlines and bottom
lines.
Aime: Give the house a great design.
Scott: This house is an ugly girl. Put lipstick on her, we’re
not giving it plastic surgery.
That’s Scott, always keeping it classy. He works hard and
lives his life fast. He likes quick wins and flips. I’ll give him this, at
least he always kept it real.
In an interview with the Vegas
Sun, Aime said, “I mean, I feel like I’m giving birth to each of them. I
know Scott has timelines to turn them around fast, and we butt heads. He sees
the bottom line, and I fall in love with the transformation. I can’t stop
myself; I really need rehab for designers.”
They generally work with the same contractors and real estate agents to sell their houses. In addition, will also have multiple trades working on one house at the same time to keep up with Scott’s insane open house schedule (think buying a home, renovating it, and putting it on the market in 7 days). And yes, there was an episode that he tried to do this.
The show got is start from a conversation Scott had with some show business friends where he recounted how he had to pull out his Glock (he’s licensed to carry) on some homeless people that came at him with needles in a boarded up house. They recorded some footage of him (Scott paid for their expenses) at work and it got into the hands of someone at Lionsgate. That is how his reality show career got started.
Finance Lesson 101: You have to spend money to make money.
ALWAYS EXPAND
Expand. Never contract. – Grant Cardone
One of the best times to start a business is during a
downturn. Scott is a businessman who owns a real estate brokerage called
Goliath Company. He invests sells, and flips houses. In addition, Scott also
was an executive producer of the show and an author. Reality television star is
also one of his many titles.
When asked what it was like doing the show Scott stated, “It’s reality TV for a reason, but try working with your wife for 12-14 hours a day. [The producers] know our fans. They love it when I break shit, and that’s my favorite part. If I could take a bulldozer and knock out a shed, that’s great. Take a chainsaw to a wall, that’s great. Demolition is No. 1; drama is No. 2. And then education.”
The best episode I saw and my favorite was the Season 2 Episode
10 show entitled, “Yancey’s Eleven” which aired on February 16, 2013. Scott
purchases 11 unfinished villas at Lake Las Vegas for a total of $380,000 and
takes on the gargantuan task of getting them all fixed up at the same time.
A&E episode description(www.aetv.com): Scott takes on
the biggest flip of his life having purchased 11 unfinished villas in upscale
Lake Las Vegas with hopes of flipping all 11 in less than 45 days! It’s a risky
gamble that could have a huge payoff…if Scott can manage to bulldoze through
some unexpected and high-priced construction roadblocks.
Show me the money honey.
The couple then began doing seminars. A no-strings attached
sort of deal. It started out for free with a preview, but then morphs into a sales
pitch. Over three-hours attendees are enticed to pay a $2,000 fee for a second,
more intensive three-day seminar. Those who paid and made the investment in the
three-day event received yet another pitch to invest in the next level that
costs a whopping $30,000.
I, personally, can confirm the first part. I was invited to a Yancey seminar. I went and it was basically someone coaxing and goading you to spend money (not the Yancey’s as they were not there). Basically, it was a high-pressure sales pitch. The free part was just to get butts in the seats. The free meal was a cold sandwich, chips, and a stale cookie. Although, it sounded good, and everyone acted professional. I refused to spend money going to yet-another seminar. After that experience, I swore off all seminars for good.
They said most people did not complete the problem because there was work involved. So, they quit. Customers cry foul. That they were not properly trained. Scam???
Finance Lesson 102: If you are going to expand and ask people for money, then you better bring you’re A-game and deliver. Better to write a book and sell it for a reasonable price, that provide the details of how you became successful then give people false hope and empty promises. A book is at least tangible.
A GOLIATH OF A TASK
“The main thing is that in TV land, they speed everything up. They [the viewers] think, ‘Oh, wow, it’s a breeze. They come in, and it’s done.’ It takes a long time to put them together, to pick out the fit and finish and work on the quality. They only see a glimpse of it.” – Amie Yancey
Scott started in real estate at a young age. He got advice
from a friend to invest his $30,000 settlement from a car crash into real
estate as his family was doing. Scott took the advice.
Forgoing finishing college he still found a way to make a
million dollars. Even though he almost quit real estate after the downturn,
overhearing a conversation between patrons made him change his mind. When he
heard how little people were paying for properties in Las Vegas only to start
renting them out to tenants, Scott saw a golden opportunity to profit. Why not
buy at the bottom?
“At the next table, the discussion revolved around the Las Vegas real estate market and the fact that there were homes available to buy for as little as $36,000 that would rent out for $900/month. Just hearing those two numbers put Scott’s real estate brain into gear. Two things came to mind immediately, ‘You make your money on the buy in Real Estate’ and ‘fortunes are made in bad economies.'” – Scott Yancey
His task was to buy real estate at the bottom. Things have to hit rock bottom become they come back up. You can capitalize on that. It was risky and things were rough. Like me, quotes were in Scott’s mind: “Nothing great is easy” and “Debt equals drive.” Those helped him. He had this epiphany and ran with it.
Similar to the money epiphany I had in 2017. Once I figured out a way to save more, I began to do so massively. Start where I was at and work my way up. I started by saving $50 a month and then slowing increased my savings every day or month. Now, I save over $13,000 a year and increase that number every year.
Finance Lesson 103: Best time to start a business is in an economic downturn as fortunes are made in bad economies. For instance, when the stock market crashes, that is the time to buy.
COLLEGE DROPOUT TURNED MULTI-MILLIONAIRE REAL ESTATE INVESTOR
“I’m not a college graduate.” Scott told Vegas
Seven. “I went to probably five colleges, and I dropped out of them all. I
have ADD. I didn’t come from money. But you don’t need money to be a real
estate investor, and that’s what I teach people. I did my first land deal on my
own without any of my own money, and I netted $2.3 million. I can relate to
most of the people who write to me and say, ‘I’d love to do what you’re doing.
I don’t like my job, but I don’t have any money.’ Great, you don’t have to.
You’re right where I started.”
Scott was hired as a real estate runner for a real estate
attorney named Walther (Walt) J. Plumb III. His salary at that time was
$5/hour. Walt ultimately became Scott’s mentor. He also convinced Scott to get
his real estate license as his last 3 runners had all become millionaires. He
ended taking his advice and making so much money in real estate, that he left
college. He was making hundreds of thousands of dollars, which is a lot of
money for a guy in his 20s.
He was making so much money for Walt that he decided to
strike out on his own.
The $2.3-million-dollar deal allowed him to pay off all his
credit cards and buy the care of his dreams, the Porsche. And put a million in
the bank. He used his big payday to pay off debt. This is similar to what John
Legend did.
You can also regularly hear Scott complain about amateurs on
his show.
In an interview with the Vegas
Sun, Scott said, “but I think there are a lot of amateur-type flippers who
have gotten in in the last little while, and they have short fuses because
they’ve borrowed money to their properties. Scott usually pays all cash.
This is what Warren Buffet says about borrowing: “I’ve
seen more people fail because of liquor and leverage – leverage being borrowed
money.”
He says, “if you don’t know what you’re doing, leave it to
the professionals.” He stills relies on
him and asks his mentor for advice. Looking up the couple net worth online
yields results of $5 million each.
Finance Lesson 104: You can be successful without college. However, you need to decide early and when you are young what vocation you are going to do to try and make a living.
THINGS WILL AND ALWAYS DO CHANGE SO PREPARE
“Flipping is great at first to generate capital, but as an investor, the goal is to take your capital and invest it in rental properties. The rental properties pay you every month. Flipping, you make one payday; you’ll make $100,000 on a good flip. [Investing] that in a rental property [can} make you $5,000 a month. … It’s a lot less work to collect a rent check than to renovate a house.” – Scott Yancey
At one point, in an interview with Vegas Seven, Scott thought that the real estate market would change as it always did. In addition, that there is a false send of high-fiving.
Most purchases are all cash deals being done by investors.
Lots of flippers have left and are out of the flipping market. People are
buying and holding, which should be the real estate investor’s endgame. As far
as renters for his homes go, he wants good tenants that resign every year and
he only takes cash as payment. He also buys near hospitals so many of his
renters are ER doctors and nurses. Basically, those with steady reliable
incomes and paychecks.
I hear that.
I also read a real estate investing book that said a great place
to buy was near college campuses. Get those college rentals going. Not bad
advice. Pretty similar to what Scott has done.
I recently read that the government shutdown has closed up
shop 4 times within the last 10 years. That is a huge problem for RE owners.
Especially, if this trend keeps up and considering that furloughed contractors
don’t get back pay when the government reopens.
Not surprising. A home is only an asset if it can or does
feed you. You can only get access to the equity when it’s sold. The only other
way to make money is to rent it out. Either by the unit, home, or room. If you
want to start a profitable real estate business and become a landlord, then you
better have the funds to handle downturns, bad tenants, vacancies, and repairs.
Finance Lesson 105: All businesses need capital.
You can take that piece of advice all the way to the bank.
John Legend is a Grammy and Oscar Award winning musician. The singer-songwriter won his first Grammy Award with 2004’s Get Lifted. The album went platinum, thanks in large part to his hit single “Ordinary People.”
He was a child piano prodigy. He skipped two grades and graduated from high school at 16.
He sang in the church choir (which he joined at 7 and was leading it by 11), was head of the music department in his church, served as a music director in college and also worked as a wedding singer.
He has done numerous interviews in his career and much of the information in this post comes from them. I discuss multiple ones in this post.
John has an estimated net worth of $40 million dollars.
He did an interview with Katherine Schwarzenegger for her 2014 book I Just Graduated… Now What?: Honest Answers from Those Who Have Been There. You may recognize the last name. Yes, she is the daughter of Arnold Schwarzenegger and Maria Shriver (Kennedy).
Here is some of what he had to say. (Not every word or quote is from her book, but numerous interviews) I highlight his advice in her book with KES (Ms. Schwarzenegger’s initials). There they are (KES) on the board right behind her.
“I had followed the path that the Penn graduate was supposed to take, but I didn’t fall in love.” – John Legend
KES: John directed theater productions in school and performed in talent shows. He wanted to be a big star, but did not know the steps to get there. John said he had a fire in his belly. No one was coming along to make him a star as he learned along the way. John had to put together a demo and have it produced by the right people. Anything that he was doing that wasn’t music, was going to be temporary.
Although, music is his first love, he worked a safe corporate job for three years while hustling to get his music off the ground. He received lots of rejections, but continued to side hustle as a musician playing anywhere he could.
DON’T BE AFRAID TO FAIL
“Fear of failure stops too many people from doing things. It’s not wrong to be afraid, but you have to fight through fear to overcome it.” – John Legend quoted as saying this in Katherine’s book (KES)
Many of his friends became bankers and consultants so he did too. However, after following in their footsteps he found that was not meant for him. He was not cut out to be a consultant.
“I couldn’t shake my passion for music.” – John Legend
He made savvy moves to make his dream a reality. During the day he did PowerPoint presentations, but at night he wrote and performed music.
Fun Fact: While in college, Legend was introduced to Lauryn Hill by a friend. He played piano on Lauryn Hill’s “Everything Is Everything.” That was his first album appearance.
WHY SIDE HUSTLE?
“I needed money. I lived in New York and had to pay my rent.”
KES: John didn’t have any financial support from his parents and he had student loans to pay back. He found that you could make good money in consulting.
He was rejected by all major labels. All the heads of these labels all turned him down.
KES: John paid his own way through college, racking up tons of student loans in the process. He had to deal with them after graduating college. He rolled the dice, took chances, and worked his butt off to follow his dreams, and never lost faith along the way.
Basically, he moonlighted his way to a music career.
BREAKTHROUGH
Havin’ money’s not everything, not havin’ it is. – Kanye West
KES: John would go to the studio straight from worked dressed in his business attire. He said he definitely stood out from the way everyone else was dressed in the studio. He ended up getting a manager and a lawyer that were also well-connected. This was in 2002.
If you want to be treated like an adult, you have to dress like one. – Diane Kruger (actress and star of National Treasure) See my post on the film.
Through his collaboration with Yeezy, he was able to parlay that into a record deal. His first album was produced by Kanye. He got a deal with Sony.
That album would go on to earn eight Grammy nominations.
Years of toiling and hard work had paid off. It just goes to show, it’s not only what you know, it’s who you know. If you want to be taken serious, then you have to act like you do.
John Legend joined the elite group to have earned Hollywood’s most prestigious awards – an Emmy, Grammy, Oscar and Tony – on Sunday. At 39, he is the youngest person to achieve EGOT status. He’s also the first African-American man to win all four awards. https://t.co/5YSh5rYfPUpic.twitter.com/AUK3Kgh1S0
“When I got my first big check, I paid [my college loans] off. No more debt!” – John Legend
As you can see, his biggest earnings are from his music. It goes to show that passion can pay off big!
KES: John quit his job and started working part-time so he could focus more on his music. He struggled for a while, living on credit cards and skating by. Then he started making money touring with Kanye. In 2004, he got a deal with Columbia Records and when that happened he didn’t have to worry about money anymore. As soon as he got my record deal, he paid off all his student loans and credit card debt. He said no one ever told him about college loan debt and how to manage it.
Preaching to the choir here with not knowing how to manage debt. And in his case, that is literally speaking as he was in the church choir singing, which would become his meal ticket.
INVESTMENTS
“I bought a place [in Manhattan]. I just bought some art—some abstract stuff—and some collages are coming too. A friend who works at MoMA is like my art consultant. I just wanted nice stuff that would hold value.” – John Legend
You should always invest and buy things that go up in value. It just makes sense.
PASSION MAKES A GRAMMY WINNER
“But that cool detachment only gets you so far. Passion gets you a lot further. It makes you a better entrepreneur, a better leader, a better philanthropist, a better friend, a better lover.” – John Legend
He chose to pursue his interest. This made him his fortune. I call it the House that was built on a piano. 😉
