Why Financial Freedom Is Closer Than You Think It Is
Why Financial Freedom Is Closer Than You Think It Is
Before you read this, I just want to make it clear that I am not a financial advisor, economist or finance professional. Everything written on here is just my opinion based on my experiences.
In 2006, I was 20 and it seemed like everyone I knew was buying homes, selling homes, refinancing homes or somehow making a lot of money from real estate. At the time I was a sophomore in college and working at a credit union. The amount of real estate related money that was going around was crazy. There were a few times when I considered leaving school to pursue real estate career, but decided not to.
At one point, everyone was saying that real estate was the best investment because it never depreciated. I decided to do the math! I calculated the cost for me to purchase a home near Sac State and rent the bedrooms to roommates. Luckily for me, at the time, I only knew about a 30 year fixed mortgage with 20% down. When I did the math it came out to something like a $2,200 mortgage payment on top of a $80,000 down payment for a pretty crappy house near the university. That’s when I decided that I’d never be a homeowner if it meant I’d need to eat Top Ramen everyday. I’d rather rent, save my money and enjoy life. Thinking about purchasing that home and doing the math was a blessing. One, because it made me realize I didn’t have the money to purchase a home, and two, I didn’t know about all of the creative financing that others were using at the time.
One time, I ran into a buddy at the gym who was a realtor. He told me that he could get me into a $300,000 house, this was while I was making $12.44 at the credit union. He started going into all of these details on how he wouldn’t want a pay stub and how he’d make my title sound better. When I asked him about the payment, he told me it’d be super small because it’d be an interest only payment. I’d build equity with that and then buy another home the same way. I’d rent the second home, that would cover my mortgages and I’d be fine. All of this didn’t sound right, I knew the guy in high school and he wasn’t too bright so I figured he was blowing smoke anyway.
Four years, one wedding, a college degree, one recession and few stimulus packages later, I was driving by a model home and decided to take a look. The seller told me about FHA loans and when we did the math it turned out that the mortgage payment would have been less than the rent my wife and I were paying. On top of a monthly payment that was less than the rent I was paying, there was a $8,000 tax refund for new home buyers. We just needed to find the 3% aka $4,200 for the down payment. We pulled together the down payment money and ended-up purchasing the home.
Four years later, we started renting-out that house for $300 more than our mortgage. We’ve refinanced to lower the interest rate, removed the mortgage insurance, taken out $30,000 to purchase an additional home and still have $120,000 in equity.

I’m writing all of this because it goes to show that there is always an opportunity to make money. This is true even when it seems like you’re too far behind to catch-up. Here’s why I think that most people are in an amazing position:
The economy has been doing extremely well over the last few years. Personally I think that this is an amazing time to start switching jobs to earn more money, paying off debt and most importantly…living below your means and saving so that you’ll be in a position to take advantage of opportunities!
Switching Jobs:
When the economy is good then consumers start spending money which means that employers are profitable. Profitable employers are always looking for more good people. If your current employer is doing well and you’re contributing to their success, then you should be rewarded. If you’re not, then right now is the time to find a place of employment that will appreciate your hard work. The goal is for this change to also come with a pay increase.
Paying Off Debt:
My goal is for my investments to earn about 10% a year and even that could be considered aggressive. Either way, most credit cards charge higher interest rates than 10%. In order to be in a prime position to invest, you should be getting rid of any high interest debt. It doesn’t sound as good as saying you made X on a certain stock, but It’s more important.
Living below your means and Saving:
Economist have been saying for years that we’re due for a correction in the stock market. This means some sort of dip is coming. Just like me unknowingly purchasing a home when the housing market was almost at the bottom, I believe that you will be in a perfect position to get into the market during the next dip. In order to do this, you have to have funds to invest. These funds will come from saving and not using all of the income you earn.
In the end, your situation can easily come from living paycheck to paycheck, slowly chipping away at your high interest debt and no investments to:
- Earning a 10% raise after changing jobs
- Getting another 17% raise after paying off your credit card
- Getting another 15% raise from investing after the stock market bubble
For the last 7 years, I’ve said that my wife and I were blessed and lucky to have found our first home when we did. I still 100% believe that finding our first home was a complete blessing. One of the things I recently heard was that you need to correctly position yourself in order to take advantage of a blessing. Hopefully you’ll continue or start positioning yourself to take advantage of the blessing that will come your way too.


