I got an interesting question from a 25 Year Old the other day and I thought I would post the topic here to see what others thought of my advice and what I got right /wrong. My first thought after hearing the question - it is absolutely possible and in fact likely assuming a few things happen over the next 10 years. 1) You must focus on keeping your expenses low. Where Baby Boomers and Gen X generations went wrong is we bought houses, cars and had kids in our 20's which meant we increased our expenses by a lot making financial freedom much harder and thus we had to stay in the Rat Race longer. If you can keep your expenses the same or nearly the same at 35 as they are at 25 you have taken a huge step towards financial freedom. 2) You must take action, learn your market and secure solid positive cash flow rentals or other side hustle, that are conservatively financed and allow for easy long term hold through any market cycle. Frankly I think Millennials have a great chance at producing a record number of 35 Years that retire Financially Free as they are making life choices that for now keep expenses very low and thus allow them to get to financially freedom quicker than other generations. What do you think? Did I offer bad advice? Z

To be this different...one has to be different. Buying a house isn't the problem. It's the fancy house with the fancy car payment and not wanting to be inconvenienced by having a rental or roommates with it at first. I did it at 31, but nobody was asking me for advice as I drove my beater with my brown-bagged lunch living in a trailer park. Most won't work and sacrifice enough, not to mention bother to get their phone out of their face long enough to even meet people or do critical thinking of their own.

@Michael Zuber I don't see where you may have mentioned earn as high of an income as you can, The formula isn't to just spend as little disposable income as you can, As a Generation X kid, we were taught earn as much as you can and spend as little as possible. My best friend a former NYC Wall Street banker retired at 42 last year, another Gen X-er who lived by this philosophy, Getting to "financial freedom" happens a lot faster when you make significantly more money. It also depends on what part of the US you live in, Some parts of the US, getting a Six-figure job is the standard, and other parts of the US, there are very few if any jobs where 100K and up is the norm. I just hired a 25 years old at $85k a year, as a Millennial she's now shopping for a home in her 20's, this isn't a bad idea or going in the wrong direction in my opinion, she understands the value of a high income in the equation in addition to low expenses. It isn't the house and kids that slowed down the Generation X-ers, it's the spending habits found in every generation, even the millennials, I see Millennials making terrible financial decisions daily, and the generation after them will do the same.

This part of your thesis is wrong. The vast majority of people will never be able to earn and save as much as if they simply purchased their own home and held onto it. The average net worth of a homeowner is 36 times greater than the average net worth of a renter. The rest is pretty good.

Being a millennial myself I can attest to student loan debt holding you back. It's difficult for anyone making the recommended payment, bills, and rent to get ahead. I also made the mistake of buying a BMW after college. When I turned 30 something clicked and I was fed up. Indianapolis was slowing kicking my ass. I sold my motorcycle to pay off the car. I starting cooking all my meals and stopped eating out. I challenged myself to read a few books. I developed a plan to purchase properties I can easily afford. The MINDSET is everything but took me 4 years to figure it out.

I think the mindset matters more than anything else. Regardless of whether it actually ends up happening at 35 or not depends on a ton of variables, but if the right mindset is taken, they are going to be on the best path possible towards financial freedom!

@Michael Zuber get them connected with the financial independence community, such as Mr. Money Mustache blog. There is lots of good advice there for limiting spending and early retirement. They focus mostly on reducing expense. I don't think buying a house or having kids is necessarily the problem. It is the big house and fancy car that is more the problem. The other side of the equation is income. A good paying job or starting your own business (rental or otherwise) goes a long way in setting a person up for early retirement. Wrap it all together, if you can control spending, increase earning and invest the difference, retiring by 35 is very possible. Millennials are already falling into the same consumerism traps that previous generations fell into.

Financially free means very different things to different people. I'm 25. We have 47 units and growing. That being said I also have other income streams that allow me to focus on building our portfolio vs. needing to suck every dollar out. I will probably be able to "retire" before 30 but why would I? I do think in my 30's I'll have a phase of "what do I want to do now". That being said I'm learning more all the time and focusing on bigger/better deals. The #1 thing I see between people who are successful in my generation and those who aren't is... Confidence. I know guys who are in Forex, Digital Marketing, Agency, Rei, Etc who are all easily in the top 1% and a lot of them travel full time. I think what really interests folks my age is "the new rich" as Tim Ferris puts it. Time Freedom. The ability to come/go on a global level. Which is why I'm such a fan of building out systems/processes that allow me to run my companies from anywhere in the world.

@Michael Zuber It is possible for anyone at any age in less than three years to receive complete financial freedom depending on how bad they want it. This is entirely circumstantial but very possible. In Scott Trenches book Set for Life, there is a pretty good start explaining that you don't need a budget and you don't need spreadsheets because it's scarce that you stick to them anyway. You don't need to cut down on your spending you need to focus on the big things that you are spending the majority of your money on, such as your house and your car and the gas for the car. In theory, you don't even need to focus on your daytime job you could be making min. Wage. So here is a simple timeline and example on how this person could do it in 10 years which is a pretty long time if you want it bad enough. But you have to want it bad enough. This is through Real Estate of course. This a single person is living in an Apt. Making min. Wage. Year one: Realize that you want to be financially free. Read every book you can get your hands on about living financially free. Rich dad Poor dad, Set for Life, Four hour work Week, the Richest man in Babylon. Now you have the mindset focus on Real Estate Books: Beginners Guide to Real Estate Investing, All the J. Scott books research on Bigger pockets every day. Year two: Start networking on this site at local REI meet-ups. If there's not one make one people will show up. Start talking to your family about it. Chances are they know someone who did or doing what you want to do. We're going to start with flipping so we can have money sooner than later to begin our rental portfolio. Now by the end of this year, you should know at the very least two or three people in the industry that are successful. Tag along on one of their projects to learn the processes. Now you're ready for your first deal. Get on the MLS, drive for dollars and talk to people. These options are both free, so up until this point, we haven't spent any money. Year Three: At some point in this year if you haven't given up you will have found a deal. (but we don't have any money) Well lucky for you, you have been networking for a whole year, and you know people who know Real Estate. With the combination of Hard Money and using your network to put up the money, you need for your down payment you're ready for your first flip. Now that it's complete you have a little bit of money anywhere from 10-20k depending on your area and how much profits you paid back to your lenders. Now do it again, but this time it's easier because you have less money to raise and you have done it before. Now that two flips in one-year that's not an outrageous goal. Year Four: flip At least 5-6 houses. You should be good at numbers and financing at this point so you should have at least 100K saved at this point because your making 20K off each flip. Now you have two options at this point you can either start buying rentals or expand your flipping business. Let's say we put 40K down on a duplex that's generating $300 per side in cash flow a month. We only put 40K down so we can still have money for our flips. You're still working your minimum wage job, so all of your bills are still being taken care of so you can save all of your profits. Year five: Flip lets say ten houses which still isn't a lot. Now you have 200k saved up. You now have enough to put a down payment on a million dollar apartment complex, or you could put together a syndication deal and have an asset worth anywhere from 5 to 10 million dollars. You get that together and your making at least 5000K a month in cash flow plus the 600$ from the duplex. And we're done in five years with only 17-18 deals. But why would anywhere stop there? That didn't even take ten years, and you could move at a slower pace. The thing is anyone can do this regardless of what their situation is. A dollar was not spent out of your pocket until you made money off your first flip. The problem is people usually think they want something, but they don't want to put the work into making it happen. You could even do it faster if you leveraged more had more partners and flipped more houses sooner. This example did nothing but learn and network for the first two years. Its simple it might not be easy, but it is simple. If you take active steps each and everysingle day then you will make progress and you will be there. I AM 25 YEARS OLD AND I WILL BE FREE IN LESS THAN 3 YEARS

Can a 25 Year old be Financially Free by 35?

Robert Bowker

Real Estate Agent · Member since 2018 · 17 posts · 10 votes

7y

@Russell Brazil your basing their net worth on the value of their home in time. That’s a false assumtpion and true net worth is based on liquid assets.

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Brittney R.Pro Member

Rental Property Investor · Houston, TX · Member since 2017 · 10 posts · 11 votes

7y

Yes.

Period. Full Stop.

2 Reply

Michael ZuberPro Member

OP

Member since 2018 · 111 posts · 121 votes

7y

@Thomas S. Very cool, so possible but unlikely given choices we are all faced with

0 Reply

Michael ZuberPro Member

OP

Member since 2018 · 111 posts · 121 votes

7y

@Eduardo Zepeda agree it comes down to choices

0 Reply

Michael ZuberPro Member

OP

Member since 2018 · 111 posts · 121 votes

7y

@Caleb Heimsoth agreed it takes time and commitment that is hard to maintain

1 Reply

Russell BrazilBusiness Member

Moderator

Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

7y

Originally posted by @Robert Bowker:

@Russell Brazil your basing their net worth on the value of their home in time. That’s a false assumtpion and true net worth is based on liquid assets.

Im basing the statement on the statistics of the adult population. Home owners have a net worth on average in this moment of roughly $195,000. Renters have a average net worth of $5,000. Whether someones assets is liquid or illiquid has zero to do with a net worth calculation. When the average net worth of a renter stats approaching the average net worth of a home owner, I will then reconsider whether owning your home is a good idea or not. Until then, the numbers speak for themselves.

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Robert Bowker

Real Estate Agent · Member since 2018 · 17 posts · 10 votes

7y

How much of the net worth is attributed to the value of their home? What happens to their Networth when home values take a dive? True networth is the liquidity of your assets not an arbitrary value given to, illiquid assets. you are correct however that people have seen their networth increase tremendously, because of the increase in real estate values.

0 Reply

Jacqueline Pelzer

Mount Vernon, NY · Member since 2016 · 86 posts · 16 votes

7y

@Ryan Dossey how is investing to Indy? I’ve been on the buyers list for Develop Indy but I’m not sure I want to venture into that particular market. What has been your experience? Rents seem a little low to me. However, so are the home prices. I am much like you in the mindset of being able to scale things well enough to be able to manage it from anywhere in the world. I’m 37. Starting a little later than some but that’s after a disaster deal in my mid 20’s that scared the crap outta me. So took me 10 years to be confident enough to try it again. I’m trying to reach my first goal over the next 5 years and my second goal within the following 5 years.

0 Reply

Cody Johnson-Winsett

Hillsboro, TX · Member since 2018 · 7 posts · 5 votes

7y

@Michael Zuber I just turned 20 and I'll be financially before I turn 25. The world is limitless and so are we.

0 Reply

Marie Fries

Whitman, MA · Member since 2018 · 104 posts · 80 votes

7y

@Michael Zuber listen to BP Podcast #276. Retirement by age 35 with Bryce Stewart. I'm listening to it right now.

2 Reply

Account Closed

Investor · Portland, OR · Member since 2017 · 182 posts · 115 votes

7y

@Michael Zuber Very possible! First Step: Get the EDUCATION, and network. 99/100 people don’t have spending problems, we have income problems. Once my wife and I understood that we both started to find ways to advance and grow our income while maintaining our passions: Healthcare and RE. Within two years we doubles our incomes and started to invest etc. So yes... very possible!

2 Reply

Jaron WallingPro Member

Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes

7y

@Jacqueline Pelzer Indianapolis is a boots on the ground market and street by street. I would not speculate on property unless you drive the neighborhood. The rental rate/cost ratio is great in the C, B-, B neighborhoods unless you over pay.

0 Reply

David Dachtera

Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes

7y

My investing group includes two brothers from South Korea in their middle 20s (they grew up here in the States).

They started out 3 years ago with no credit (maxed out) and no money ($200 overdrawn). One is a veteran, the other is a college drop-out.

They now have 76 doors paying them rent every month with more on the way. They acquired their holdings with none of their own money or credit (they were broke, remember?).

Yes! You can do it! They did ...

1 Reply

Brian Ellis

Rental Property Investor · South shore, MA · Member since 2017 · 1k+ posts · 1k+ votes

7y

I would think it takes the right personality, position, and maturity level to be financially free within 10 years, no matter what the age is.

Me at 25? Nope.

3 Reply

Aaron Hunt

All Over, USA · Member since 2017 · 689 posts · 756 votes

7y

@Russell Brazil I don’t like that stat. I made my own. Since I’ve always been the anecdotal exception, never the rule. I’m under 35, a renter, high income, and my net worth blows that number out the water. It’s my investments, and early aggressive leverage + time, that got me there. And...I now live and rent in Rockville, MD. Will likely be here for the next 20 yrs, and plan to buy eventually - more so we can do whatever we want and not worry. I continue to invest aggressively OOS, and haven’t bought a primary here, cause I need meaningful returns (cash flow + appreciation) now. Actually, I’m flying to where I have investments tmrw, tax written-off trips in a city that’s fun and I can continue to invest in for gainz. Future paid off vacation home spot. The city/county I live in now can’t offer that to me. Owning an expensive primary certainly doesn’t secure financial freedom. Will avoid that at as long as I can continue to invest and reach some arbitrary goal.

2 Reply

Russell BrazilBusiness Member

Moderator

Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes

7y

@Aaron Hunt There is always anecdotal evidence contrary to what is best for the majority of the population. And Im glad that everyone isnt a homeowner, because Im in the business of renting my properties to tenants, and selling properties to landlords. You sound like the type of tenant I target for my rentals. Most of my tenants make a lot more money than most of the people on these forums, and Im glad, because I often feel my rents are outrageous, but people keep paying them.

You should come out to the Gaithersburg BP Meetup. (Actually typically takes place in Rockville at the Norbeck Country Club).

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2 Reply

Keila Rosario

Real Estate Agent · Bronx, NY · Member since 2018 · 30 posts · 2 votes

7y

@Steve Vaughan I want your advice. Can we connect?

0 Reply

Aaron Hunt

All Over, USA · Member since 2017 · 689 posts · 756 votes

7y

Originally posted by @Russell Brazil:

@Aaron Hunt There is always anecdotal evidence contrary to what is best for the majority of the population. And Im glad that everyone isnt a homeowner, because Im in the business of renting my properties to tenants, and selling properties to landlords. You sound like the type of tenant I target for my rentals. Most of my tenants make a lot more money than most of the people on these forums, and Im glad, because I often feel my rents are outrageous, but people keep paying them.

You should come out to the Gaithersburg BP Meetup. (Actually typically takes place in Rockville at the Norbeck Country Club).

Might just take you up on that!

And, I hear you. Wish I could have bought in this area back in the day. That’s my goal with where I currently invest.

I have no problem personally renting at a premium if the property warrants it. The amount I currently pay in rent for my current place (penthouse) would have made my jaw drop when I was younger. NYC prices out here! My biggest mental barrier is knowing what these used to go for (in the 90s!) and what I could get for this money elsewhere.

And in turn, I rent out my places to tenants, who will eventually become like me someday. One of my tenants is a CFO of a national chain, and makes way more than me, ha! #goals

1 Reply

Ryan D.

Rental Property Investor · San Jose, CA · Member since 2013 · 188 posts · 228 votes

7y

Too may people are focusing on the idea of "early retirement" and being "financially free", rather than focusing on building a career they enjoy, find meaningful, & don't WANT to stop doing. If a 30 year old is working a job they hate, eating beans & rice daily, & living cheaply in the ghetto, just to be able to quit their job in 5 years....I cant possible see how this is living a more satisfying life than finding a job you enjoy & brings you satisfaction. When young people ask me questions like this, I tell them they should aim to have the means to not be REQUIRED to work, but build a career where they still WANT to work.

Look at the most successful people in any field, and they could have stopped working years ago - they don't b/c they derive meaning from what they do, & the satisfaction that comes with overcoming professional challenges.

Also, the idea of building a real estate portfolio to "retire early" is completely non-existent. People who live off their real estate portfolio aren't retired, they are small business owners. They haven't stopped working, they've just stopped working for someone else.

9 Reply

Greg GaudetPro Member

Investor · Pukalani, HI · Member since 2017 · 414 posts · 291 votes

7y

@Michael Zuber Yes. Anyone can be financially free as soon as they want to be (within reason, depending on how much work they’re willing to put in)

Podcast Guest on Show #385

0 Reply

Michael ZuberPro Member

OP

Member since 2018 · 111 posts · 121 votes

7y

@Marie Fries will do

0 Reply

Jonathan C.

Real Estate Investor · Nashville TN · Member since 2009 · 287 posts · 171 votes

7y

Started RE at 8 years ago- at 28... 36 now... 6-12 mos away from passive income covering current living expenses, but should have already been there. Got sidetracked, wasted first year doing stupid stuff.

10 years more than enough. You can do it in 5-7 if everything goes right for you.

1 Reply

Vasyl Magura

Real Estate Agent · Cleveland, OH · Member since 2017 · 41 posts · 32 votes

7y

Very possible, even possible to be financially free at 25. How? Go from driving expensive cash killing cars, shopping for new clothes, and living a life you can't afford to driving a cheap economy car/. Save up a savings then live in a small home where taxes & bills = <500-600 monthly

Start making money at 19, @ $66,000 salary / 12k school debt

Debt paid off at 19. No credit cards, no car loans, no mortgages. Free person

Few thousand dollars in stock contributions started growing

Start a business at 21

Live with my parents until 23 @66,000 / side business 1 first year $25k, Side hustle in sales 20-30K bonus.

Free house at 23 from parents

Bought first rental during hard financial times cash @40k worth $100k+/ rented it at $975 instantly

24 -25 Business grew from $25k ----> $150,000+ in a little over a year, took that business to my advantage to start another business full time in sales went from 20-30k yearly to $100k + yearly

Found my other half super frugal & debt free with 100k+ salary

Left job to focus on personal desires to go back to school to be an MD

bought another rental cash 75k worth $130k/ rented it

Is retirement possible? Yes.

Do I want to retire...? No. & definitely not here in the U.S.

Did I change my work?... more diversified, cars, houses, healthcare, teaching.

Has life changed....? Significantly. 100% independent from anyone & anything.

My life tip to anyone seeking financial independence is to open your eyes & look around you.... you see advertising everywhere you look, new electronics, new cars, new lips & boobs for females, new alligator on a t-shirt......the stuff is worthless. Go outside, take a deep breath, throw your excess crap in the dumpster, pay off any & all loans that are killing you with apr, and live your life for once, while laughing at the people going to work in their flashy cars & on their i-phones.

Also find a place out of the states to retire, because taxes & healthcare costs will make any millionaire broke in a few weeks.

1 Reply

Ray Johnson

Irvine, CA · Member since 2016 · 545 posts · 614 votes

7y

@Ryan D. Congratulations on seeing beyond the flashy lights of the alleged "Financially Free" neon sign.

Elon Musk, Warren Buffet, Bill Gates, Jeff Bezos, and too many more to list are all Billionaires yet they still go to work doing something they love, They're not putting in 8-10 hour days 5 days a week but these are people that are "financially free".

I'm always curious as to what people plan on doing once they are "financially free", most will say travel the world, but it you retire at 35, you'll run out of travel destinations over the next 60 years traveling several times a month before you hit that 95th birthday if that's the only thing on the agenda.

My question to all of you would be what's the plan once you retire in your 30's?

1 Reply

Kevin Dong

Flipper · Fort Myers, FL · Member since 2017 · 182 posts · 98 votes

7y

I am 27 years old. started investing in real estate 2017. And I have 16 units free and clear. Cash flowing around 12k a month. Am I financial free yet ? For most people yes. But not really for me. It really depends on how much do u need monthly passive income to your freedom number. I think mine is 100k monthly cash flow. I will try to hit it in 5 years.

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Can a 25 Year old be Financially Free by 35?

Can a 25 Year old be Financially Free by 35?

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