Personal Finance

4 Massive Financial Scams Sold to Americans on an Everyday Basis

Expertise: Commercial Real Estate, Personal Finance, Real Estate Marketing, Business Management, Landlording & Rental Properties, Real Estate Investing Basics, Personal Development, Real Estate News & Commentary, Mortgages & Creative Financing
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If you really want to be financially free and wealthy, you may want to question the status quo and reevaluate these heavily marketed ways of living life.

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Billions of dollars are invested in confusing us and keeping us trapped in the rat race. Don’t fall for it. Be careful of making these blunders—and focus on getting ahead instead.

4 Financial Scams Sold to Americans on an Everyday Basis

1. Buying a House

Buying a “dream home” is one of the biggest traps people can fall into. Most people stretch their limits, get into massive debt, and get stuck paying the bank for the rest of their lives, while working two or three jobs to pay the mortgage. That novelty of a new home can wear off fast. Owning your own house can be great. But you’ve got to do it wisely.

The true costs of owning and maintaining a home can be far higher than most realize. Many also find they get financially stuck in that home, and that can begin affecting all other areas of life, from careers to relationships. Check out this debate on whether owning the house you live in is really a wise financial decision or not.

BRRRR-strategy-deal

Related: Grant Cardone is Right: Owning a Primary Residence Usually ISN’T Smart

2. Avoiding All Debt

Focusing on getting out of debt, avoiding all borrowing, and putting off investing became popular trends in the wake of 2008. This made authors like Dave Ramsey very popular. It’s understandable. However, the most successful and wealthy are not those who have no debt. They are those who know how to leverage wisely. They are ironically often those with millions and even billions in loans.

Like Grant Cardone says, “Rich people use debt to leverage investments and grow cash flows. Poor people use debt to buy things that make rich people richer.”

3. Going to College

Many of the smartest and most established individuals are those who dropped out. That includes Sean Combs, Bill Gates, Oprah, Larry Ellison, Mark Zuckerberg, and more. Many are also big real estate buyers. Many top minds now say that college and the education system in America is one of the biggest scams of all.

I personally struggled with this decision. I wouldn’t change the way I did things, though. Find out how I navigated this giant scam in this article.

college-rental

Related: Dave Ramsey Is Wrong: You DON’T Need to Be Debt-Free to Hit Financial Freedom

4. Save, Save, Save

Don’t get me wrong—saving is necessary at times. Everyone should have some emergency capital saved. But you aren’t going to successfully save your way to a comfortable retirement. Even if bank savings rates go up to 4% again, that just doesn’t provide the necessary juice to get and stay ahead financially. Don’t even expect it to keep you in the middle class (if there is even such a thing anymore).

Summary

It takes a high level of awareness to know what is really going on out there. Avoid the herd mentality, and start to think for yourself. If the masses are going one way, then by going the opposite route, it is highly likely that you will find success. I truly believe this.

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What would you add to this list? Would you agree that these constitute financial scams?

Let me know your thoughts with a comment.

Sterling is an multifamily investor specializing in value-add apartments in Indianapolis and other Midwestern markets. With just under a decade of experience in the real estate industry, Sterling w...
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    Wave Taylor from Baltimore, MD
    Replied over 3 years ago
    Well, I don’t have a house, I did go to college, I have NO debt and I basically save all of my money. Am I rich, NO. Am I living the life style that I want, NO. Do I have a job, YES. Am I happy where I am today, Hmmm, NOT REALLY. What is wrong with my picture?
    David Anzini
    Replied 5 months ago
    you live in Baltimore. Get out of that rat hole and move someplace where you are appreciated
    Sonja Sevcik
    Replied 5 months ago
    Buy a small house - maybe even a duplex and rent 1/2 - put some of that savings and some modest debt to good use. Once you save some more ... do it again. Try to keep the duplex and rent the whole thing. The buy yourself a house. The great thing about real estate is you are never too young or old to invest and there is always a way to buy ... just buy smart. The only thing better in life than contributing to your own success is to have great relationships with people you love and/or respect.
    Nikolay Voronovich from Pasadena, California
    Replied 5 months ago
    Wow. Great answer. Especially last part. Thank you
    Wave Taylor from Baltimore, MD
    Replied over 3 years ago
    Good article.
    Sterling White Rental Property Investor from Indianapolis, IN
    Replied over 3 years ago
    Thank you!
    Matt Honeyford Investor from Rochester, NY
    Replied over 3 years ago
    The best articles spur opposing opinions and kindle debates. Solid article. Nice post @STERLING WHITE.
    Sterling White Rental Property Investor from Indianapolis, IN
    Replied over 3 years ago
    Thank you! What are your overall thoughts on each of the points, Matt?
    Lee
    Replied over 3 years ago
    The main thing a college degree did for me was open the door for an interview. I’ve owned several properties over the years and always made a decent return on them. At this point I am selling the current one, moving across country to a rental and will start a small business online doing what I should have been doing all my life instead of accounting management. Companies often rely heavily on the degree process and so parents tend to feel this process is essential for their children’s success. However, in my case I had the talent to do my job well even though it wasn’t my first choice and my degree wasn’t exactly what was required. Then got hooked into the American dream of consumerism, get a job, get married, buy a house & cars, maybe have kids, buy more stuff, etc. Keep buying stuff over and over again. Finally get smart, go minimalist and begin the work of helping the less fortunate, one way or another. Cancel idea of a master’s degree, do what I want to do. Am I wealthy? Yes, in more ways than one, it’s not just the money that counts. Being your own person and finding one’s mission in life is the ultimate goal. All the rest is fluff but that is what we are programmed to chase, it’s pretty hard not to get sucked into it and those who climb higher and higher are not necessarily happy. I know a multi-millionaire who now lives on a rather modest sailboat in the USVI and spends most of his time worrying about his money. Regardless of what we are told, life is not meant to be a competition against the entire world. There will always be someone richer, better looking or happier than we are. Do what you can to be useful and productive in the process of helping others, if we all did that it could be a far better world.
    Charlotte Chew Investor from San Antonio, TX
    Replied 5 months ago
    Re: getting a college degree- I'm a career & tech teacher so I try to stay informed on job market trends. There is getting to be a large demand for trades (electrical, plumbing, HVAC, welding, med tech, radiologist etc) since many who worked in those industries are retiring and leaving a gap. The pendulum is swinging back to having trades taught in high school and having students industry-certified before they graduate. I have a master's and 10 years in education and my students just graduating from a trades program will make 3x more right out of trades school than I do with a master's! Some post secondary training might be necessary but not so much a bachelor's degree.
    Kurt
    Replied over 3 years ago
    Getting a degree and buying a house and contributing to a 401K are the surest ways to get ahead in the US. There I said it.
    Anthony Jeffers from Jersey City, New Jersey
    Replied 5 months ago
    Being happy and fulfilled in life is the key. So if that does it for you, so be it.
    Eric Carr Real Estate Broker from Los Angeles, CA
    Replied over 2 years ago
    Well said, I agree with you here. The details of 2 or 3 jobs aren’t necessarily important, as someone called you out on. What I understood is that people STRETCH for that house and you made a good point. I also agree with you about college, it’s not for everyone nor do I believe it’s mandatory to “make it” as we have been conditioned to believe.
    Jason Rushin
    Replied 5 months ago
    Once again you Provide great info. Very educational. Thanks for all the lessons you pay on.
    Sterling White Rental Property Investor from Indianapolis, IN
    Replied 5 months ago
    Much appreciated, Jason
    Richard A Young New to Real Estate from San Antonio, TX
    Replied 5 months ago
    Great article Sterling! Straight and to the point. Thanks!
    Sterling White Rental Property Investor from Indianapolis, IN
    Replied 5 months ago
    As always. No fluff
    Brittain Bost
    Replied 5 months ago
    @Sterling I need you to come down and talk to my college and youth groups in my church! I was working with the student Pastor to put together some material around the book "A New U" so I am so pumped to read your other article on college education! Completely agree on your points above. I bought a relatively cheap fixer upper home when I first got married - wish I would held off and bought a 4-plex instead to live in... after getting my wife on board of course :) I need to grow in my ability to leverage debt wisely. I am working to learn more and even looking to buy a small business with a SBA loan and should get some great cash-flow while servicing the debt. Need to check your other articles. Thank you for putting this together!
    Sterling White Rental Property Investor from Indianapolis, IN
    Replied 5 months ago
    Happy to be of value! Wish I knew these things and more looking back
    John Lane
    Replied 5 months ago
    I disagree with most of what you said and when I saw you quoting Grant Carson’s it all made sense.
    Dave Slagle from Fletcher, North Carolina
    Replied 5 months ago
    I Love Grant Carson ;)
    Tad Wolfe from Grand Rapids Michigan
    Replied 5 months ago
    😆😉👍👊
    Sterling White Rental Property Investor from Indianapolis, IN
    Replied 5 months ago
    ***Grant Cardone
    David Anzini
    Replied 5 months ago
    So................ This has been up for 3 years or so. Anyone having second thoughts now that we are living in the COVID-19 / Black Lives Matter world? Just asking, not looking for a fight
    Todd White
    Replied 5 months ago
    Yes, I too wonder if now in the COVID19 reality people agree with this article. I personally have missed out on a huge stock market recovery despite the current crisis.
    Phil LoCicero
    Replied 5 months ago
    Yes. Big second thoughts. Best I can suggest is to stay in a landlord friendly state. It’s the only way I’m willing to do it. Be ready to sell in a heartbeat should the need arise. Another of my strategies is to only deal in the affordable end of SFH’s. They appreciate the fastest and can be sold almost immediately if necessary. If you’re not at least a little concerned about what’s going on, I would imagine you haven’t been paying attention.
    Sterling White Rental Property Investor from Indianapolis, IN
    Replied 5 months ago
    Same thought process as 3 years ago. Even in original article I mention about saving for an emergency, which Co-vid I would classify under. Everything else I would put in myself and real estate(primarily multifamily)
    Phil LoCicero
    Replied 5 months ago
    I agree with much but not everything here. Buying a house is great but unless it’s making you money it’s a liability. A forced savings plan at best. I have read that if you retire with your home being the lions share of your net worth it’s a great predictor of a financial struggle ahead. I agree. Leverage- leverage is a crapshoot. As long as nothing goes wrong you should be fine. When does nothing go wrong? Or at least who can predict it. I make slow progress by using no leverage but I also sleep like a baby. I’d rather own 3 paid off properties than than 9 leveraged. Get another 2008 or now 2020 and the market tanks, with no one paying rent, which of the above positions would you rather be in. But absolutely- if everything is going well then the guy with the leverage wins. Saving- I agree. You just can’t save your way rich. Does that mean you shouldn’t save? No way. Save like crazy. School. I agree in part. Any paid education that doesn’t leave you with a marketable skill is better avoided altogether. If it’s a degree in chemical engineering or a welding certification then I say go for it as long as it’s not at a high cost school. You can learn everything you need from a community college followed by two years at a state university if necessary.
    Rick Tra
    Replied 5 months ago
    There is really no right or wrong, it really depends on each person's strength and preference. I have seen people the rent their whole life and invest conservatively through mutual funds do very well. They spend their time advancing in their career they love with no interest in maintaining a house. For the majority of the people a college degree forcused towards a job in demand with a modest home plus a conservative mutual fund portfolio is the best path.
    Michael Lewis Lee Real Estate Broker from Dallas, TX
    Replied 5 months ago
    This just proves that there many ignorant and desperate people out there making decisions without doing there homework and trying to confirm everything you hear. I've had the time and pleasure to listen to Robert Kyosaki, Grant Cardone, him Brandon Turner, and others on a full time basis, for years and that has paid off well. This is a good time to share that article. Remember that patience plays a big role as well as confirmation.
    Sterling White Rental Property Investor from Indianapolis, IN
    Replied 5 months ago
    Patience is key. Great share, Michael
    Matthew S. Rental Property Investor from Nashville, TN
    Replied 5 months ago
    4 Massive Financial Scams Sold On Biggerpockets on an Everyday Basis: 1) Leverage yourself to the hilt 2) Find “secret strategies” to borrow even more to buy property 3) Tenants will always pay their rents, so you don’t have to worry about those mortgages 4) If your plan fails, it’s someone else’s fault or you were “unlucky” If COVID-19 hasn’t woken you jokers up, I don’t know what will. I’m thankful I haven’t fallen for the scams on this site (there’s good info here too, that’s why I’m on here, but it’s harder to find amid these kinds of articles), and that I did “fall for” Ramsey’s debt-free “scam.”
    James Lusk Rental Property Investor from Lake Forest Park, WA
    Replied 5 months ago
    I’m not sure what articles you are reading.....Pretty much the exact opposite seems to be my experience in my 6 years of membership on this site.
    Matthew S. Rental Property Investor from Nashville, TN
    Replied 5 months ago
    I mean, this article, for one. Do a search for Ramsey to see many more.
    Jason Hinton
    Replied 4 months ago
    Just from today's email: The BRRRR Origin Story: How I Discovered This Amazing—No Money—Real Estate Strategy 7 Ways to Flip Houses With No Money I've been hanging around for a couple years and a huge portion of the article BP selects for the emails are how to get rich quick using other people's money.
    David Schwalm Investor from Austin, Texas
    Replied 5 months ago
    My first "home" was a fourplex that I bought when I was 24 years old with my VA loan when I was getting out of the Air Force. I walked out of closing with cash in my pocket. Two years later I moved down to Austin and bought 2 more fourplexes with a 1031 Exchange. My wife and I lived for "free" for 10 years or so before we traded one of our properties for a house. I never got to the point in the real estate game were I could buy enough properties to completely quit my day job. I ended up selling both and doing very well on them. There is always a "but" and if I could have overcome my fear of building a larger portfolio I would probably be "retired" right now. But I am lucky enough to be in IT and enjoy what I do - so I can't complain. We live below our means I think we are at around a 40% savings rate and can pay the house off if we choose. I think there is always luck involved, too. Who knew that Austin would be where it is? My house has doubled in value in 10 years - far outstripping what we have put in it to live here. My dad lived in his house in Omaha for 40 years and maybe he got 2.5 times what he paid when he finally sold. Big savings comes from tackling the high cost items - housing and transportation. There's nothing like not having that big mortgage or rent payment due every month. This is especially true during these crazy times.
    Susan Maneck Investor from Jackson, Mississippi
    Replied 5 months ago
    College is not a scam, getting yourself into tens of thousands of dollars in debt to go to college may be. The average college graduate will make two million dollars more over their lifetime than a non-graduate. Most people are not a Zuckerbergs or a Gates who were smarter than their professors. Besides a college education offers a good deal more than money. And if buying a house was not better than renting one, we would not be investing in real estate. But this statement remains priceless: “Rich people use debt to leverage investments and grow cash flows. Poor people use debt to buy things that make rich people richer.”
    Rebecca Jackson Rental Property Investor from Dallas, TX
    Replied 5 months ago
    Agree with college- universities are a business, treat it accordingly. Depending on your goals, higher education may not be necessary. No debt- if you don’t have the reserves for contingency planning of said debt, I’d rethink taking on the debt. Risk analysis is key here. Owning residence- depends on where you live and how much space you need. Rent vs own, which makes more sense? Let’s not forget tax deductions and benefits that come with ownership.
    Sterling White Rental Property Investor from Indianapolis, IN
    Replied 5 months ago
    Great points, Rebecca!
    Sam Cherry
    Replied 5 months ago
    Matthew, You aren't alone in your opinion. BP is so full of BS that it clogs my BS filter to often. There are some gems out there but like you said you have to mine for it. I have been a LL for 20 years. I have eight properties and thank God all my properties are paying their rent on time. My secret is I don't rent to tenants with a car payment. That is paying off in spades for me right now because nobody is deciding to pay me or make their car payment. Tenants will always pay their car payment before you because the car and phone are their key to the world and work. I have had other LL tell me I am off my rocker for doing this, however I wonder what they think now? The second secret is I can repair or fix anything. Again providence has paid off for me because my father-in-law is a carpenter and I have been able to pick up more skills from him every day. I don't see how any LL can make a profit by paying everyone to do everything or pay a PM to hire someone to do it for you. Just to many middlemen involved to make it worthwhile. Also, I find the workmanship from most people to be crappy at best unless you are willing to pay a fortune to get it done now or wait two months to get it done at a reasonable price when you can get on their calendar. Neither are profitable propositions. When I do the work I know I am going to do it right and will lower my costs in the long run. In addition, I normally put features in my rentals that would cost others much more but because I am doing the work they costs me less. This is a marketing advantage I like. When tenants are trying to make a decision for a market rent property they will go for the more "upscale" for the same price which reduces turnover in time between tenants. BP is really good at selling the sizzle but is really short on practical advice. I love reading about the people who went from zero to 20 "doors" in one year. Those people are leveraged to the hilt and they are lucky just to own the door on the property outright right now. It is time to start seeing some bankruptcy advice right now because there are many out there that could use it. Leverage is like great winds in the sails on a calm day, but acts like an anchor in stormy seas. Just my 2cents. GLTA! Sam Cherry
    Ty Murray from Graham, North Carolina
    Replied 5 months ago
    What is the real point of this 3yr old article?
    Matthew S. Rental Property Investor from Nashville, TN
    Replied 5 months ago
    Clickbait. Clickbait is the point. BP loves to promote articles like this to promote “engagement” on the platform, but it is actually deteriorating trust in it.
    Sterling White Rental Property Investor from Indianapolis, IN
    Replied 5 months ago
    It’s still relevant, Ty. What was your biggest takeaway from it?
    Brian Taylor
    Replied 5 months ago
    Like anything, there is a right way and a wrong way (or series of ways) to approach all of these situations. Dropping out of college is great to pounce on a opportunity to go make millions or billions, but college is not so great if your borrowing tens of thousands for a degree that ends in the word “studies.” That’s just an expensive hobby (but with some fun parties sprinkled in). Debt is awesome when it produces good margins, but crippling when you are using it to finance lifestyle. Savings is only meant to (1) create insulation for when things go sideways, and (2) so you actually have something to invest. It’s not meant to just be a chronically eroding asset. It’s frankly weird to hear people be so polarized on these concepts, because every one of these scenarios is a balancing act. You can be extreme if you want in any direction, but it can also be a joyless existence if taken too far. I like Dave Ramsey, and apply that to my personal life, but most of my properties are partially leveraged so I could move faster. I think Grant Cardone is a brilliant tactician, but a royal d-bag when I heard him say he got rid of his dogs because they took time to care for. These aren’t either-or scenarios. Find the mix you are comfortable with, and define your own strategy. If I’ve learned anything from BP, there are about a hundred ways to play this game and still win (yes, even during Covid). And you can still have a dog too.
    Brett Jones
    Replied 5 months ago
    Strong work Brian, very well said!
    David Mincey Flipper/Rehabber from Randallstown, MD
    Replied 4 months ago
    Amen Brian
    Chris Vilburn
    Replied 5 months ago
    Higher education is definitely the best investment I have ever made. My earnings increased nearly 4x due to college (and I also met my wife of 23 years there), and the cost was less than 10k per year. And then a masters degree at another university (although more expensive) lifted my earnings with another almost 4x multiplier. The ROI on both of those decisions has been amazing and keeps paying dividends via the skills I gained, great alumni networks, and great memories.
    Staneley Cesaire Investor from Utica, NY
    Replied 5 months ago
    This article is tricky, one can say it is true howEver I caution everyone, education on wealth building is key and an examination of your self is necessary, what do you want? One size never fit all! Maybe you want to buy a nice home where you grow your family, that can be what set you on the path to growth since you don’t have to worry about having to constantly move, or worry about your landlord telling you can’t turn on the AC, like Grant Gordon found out a few days ago search youtube, https://youtu.be/kG0Y5MGFeKU, Regard to college this is true when it come to money but again it depends, i don’t hear to many college drop out discovering cures for sickness! Avoid debt, again this is tricky people should understand debt before using it!
    Anthony Jeffers from Jersey City, New Jersey
    Replied 5 months ago
    Great article. Grinding it out, purchasing RE that cashflows (assets), then when the cashflow is built up, it can purchase and sustain the personal dwelling and other liabilities. Why work to pay for liabilities, when smart investments will to do it for you? Financial freedom = time freedom..".....and we only have a finite amount of time.
    Gary Stringer from Myrtle Beach, South Carolina
    Replied 5 months ago
    I got started late with this whole Real estate investment Thing for my personal betterment. I spent a couple decades helping other people get wealthy through my efforts in my construction company. I got into it just before the crunch , maybe a bad time and maybe not. It was so easy to obtain financing at that time. I am 69 years old now and BRRR seems a little uncomfortably late for me. I bought a home needing quite a bit of work, Bought it for $100K and ARV now worth $550k. I also bought 2 rental houses at $120k each. I thought the day of the $100k house was gone . I now find my rentals to be unique in the market, they are in a rare $950 /mo price range for single family detached. I don't know that they have drastically increased in value but they would sell immediately if I wanted to sell them. I thought it important to have a paid for roof over my head at my age so I focused on paying off my personal home first. I then paid off both the rentals so I now have three houses paid off and am completely debt free with a couple years ahead still working at the profession I enjoy. I have been self employed all my life with no big pension. I would have to have a tremendous amount of money (which I don't have) invested in the stock market for dividends to match my $1900/mo gross rental income. I have very rare turnover in tenants. My rental income, and that little social security check along with the wife's ss check and her pension will be my retirement income. Had I been younger the BRRR is the way I would have gone. So I find myself after battling through a catch up football game of life with the score tied and finding myself in field goal position to finish the game. Leveraging is great but to a point with age considered for my thinking.
    Deanna Opgenort Rental Property Investor from San Diego, CA
    Replied 5 months ago
    College detractors generally seem to be defending a decision they made when they were between 18 and 24. Those who did get a degree seldom regret it (because of the knowledge/skills gained, doors opened), but in hindsight may wish they hadn't gotten into as much debt in the process (Hint; JC+transfer = 4 year diploma identical to every other graduate, but about half the tuition expense).
    Dominique Pradel-Lewis Investor from Pittsburgh PA
    Replied 5 months ago
    Hi Sterling I hope you're doing well! You should add whole life insurance to the list. Savings should be a vehicle to acquiring assets. While I always wanted my kids to attend college they needed to have a goal in mind and not do just to say they did: Find their passion so to speak. Enjoyed your article specially since I used to believe in some of those thing but BP has showed me different: Closing on 8 doors (2 deals) between now and August 21.
    Sterling White Rental Property Investor from Indianapolis, IN
    Replied 5 months ago
    Great to hear from you Dominique. And congrats on the closings!
    Tyrone Dennis
    Replied 5 months ago
    Debt Free Living... Early Spring this year, I had a subordinate respectfully tell me his views. He said live within your means and don't buy it if you can't afford it. He meant DON'T TAKE LOANS. He couldn't be convinced about leveraging debt. I smiled and told him good luck.
    Evan Alfonso Jimenez
    Replied 5 months ago
    #1> Buying a home. YES it is wrong to buy a house BEYOND YOUR MEANS. I see this often. The last thing you want is to be house rich and cash poor. No thank you. But I also believe that real estate is a great way to build wealth. Over time. Especially in high expense places such as California. #2> Avoiding all debt. YES knowing HOW to utilize debt is fantastic. Using it to build your credit and increase your credit score is absolutely something that will benefit you on every financial deal. Avoid credit card debt that you cannot pay off. Use other debt in yoour favor. #3 > Going to college. YES. Paying beyond your means is a NO. I should've listened to the experts on this one. Paid over $25,000 for out of state tuition for my son; ended up being sent home for covid 19 pandemic. They won't refund a penny. Now he will stay home and will attend our local community college for practically FREE. Lesson learned. #4 > Save, save, save. Yes - to an extent. Yes you need money in a savings account for a rainy day. Yes you need money tucked away so you can sleep at night. But beyond that you need to put your money to work. LOVE the quote "Like Grant Cardone says, “Rich people use debt to leverage investments and grow cash flows. Poor people use debt to buy things that make rich people richer.” I am on board w/ this and have begun utilizing this philosophy in my life.
    Kaii Blanton Rental Property Investor from Los Angeles, CA
    Replied 5 months ago
    Great article! I truly enjoy reading articles that go against the grain. I truly believe you should rent where you live but own where you rent. More Grant Cardone for you!
    Katie Rogers from Santa Barbara, California
    Replied 4 months ago
    1) College graduates still make more on average than non-college graduates. If you value the education over the so-called college experience, it is possible to graduate from college without going into deep debt. 2) Do not let a buyer's agent push you into buying more house than you need. 3) Aggressively pay off your residence. Then you operate from a secure foundation. Whatever else happens, the home you live in is safe. 4) Yes, save aggressively. The time value of money demonstrates that all things being equal, it is better to have money now rather than later. People get themselves in trouble when their reserves are inadequate. 5) BP stories not withstanding, it is not necessary to amass a real estate empire to reach financial independence. Three single family units can do it: One unit to live in, one whose rental cash flow pays the property tax and homeowners insurance for all three units, and one whose cash flow pays your other living expenses. One more unit is more secure because it covers the risk of a vacancy. Umpteen units are unnecessary. 6) Human nature seems to have trouble understand the concept of "enough." It is probably related to the evolutionary struggle to have enough food.
    Stacee Evans Investor from Canoga Park, CA
    Replied 4 months ago
    Sterling, I am a big fan of you and your content and constantly learn from you. I actually agree and disagree with each point, although some of it may be with a small sample (just me) as a reference. 1. Buying a house is not a one size fits all that everyone should or should not do it. If you're tying up too much money by buying and don't have extra to invest and work towards financial freedom, don't do it. After I purchased my first house, the mortgage stayed the same, but if I was renting, it would have gone up. When I purchased my 2nd house, I was able to rent out my first one. Due to luck and great timing, the home values shot up, and the rents shot up so high that renting would have ended up being a financial burden, but because I purchased my first 2 homes, I was able to use the equity to purchase rentals while keeping my monthly mortgages low. 2. As far as avoiding all debt, I would suggest that if someone is the type of person that runs up credit cards or purchases liabilities with debt, they should not get into debt. If you're disciplined enough to use debt where you have a higher ROI on your money than paying cash for an asset, go for it. For someone not willing to learn and put in the work, a blanket statement for them of avoiding all debt may help keep them out of trouble. Look at Dave Ramsey. At one time he was so leveraged that he lost it all and then went in the other extreme. Look at you. You use debt to make money and increase your income and net worth for yourself and your investors. Debt can be used in a smart, profitable or not so smart manner. 3. Going to college may not be a great decision for someone that doesn't know what they want to do, has to go into massive debt to get a degree that doesn't pay well, or has another career goal that doesn't require a degree, such as an electrician, plumber, real estate or entrepreneur. We do want college for our doctors, scientists, engineers and other careers that not only require a degree, but they have a financial payoff and are hopefully in a career they are passionate about. 4. As far as save, save, save, I know too many people that really need this one. For the person that gets their paycheck and the next day it's gone, they need to save. I also know people that make a lot of money, but with each pay bump, they increase their lifestyle and they are always broke. This is a great post and it is helpful to look at general rules to live by from different sides. I will admit, the title was a great hook and got me to read the post.
    Howard H Phung
    Replied 4 months ago
    These solid advice challenge the conventional wisdom. However, I don't think we should downplay the importance of going to college. Granted, college is not for everyone and can be very expensive. Many smart people dropped out college and build empires. However, most people reading this post are not ultra-smart. Statistically speaking, a college degree can open more job opportunities and potential better salary than a high school diploma can. I listen bp podcasts, and many successful guests have a least a bachelor degree. These guests use their savings from W-2's and expertise from their behind-a-desk jobs to jump start their RE investment. Having a 6-figure income and doing a house hack is much easier than having a salary less than $37K a year and doing a house hack. Saving is the most basic financial skill. Nobody expects to live off their saving when they retire unless they have been earning a 6-figure income and spend $25K/year. Saving is different from investment. However, if a person do not know how to save, he cannot expect to be financially independent. In other words, saving is necessary but not sufficient.