Why You Should Consider Real Estate Investing As Early As Your 20s

There’s this old saying that says the best time to plant a tree was twenty years ago. The second best time is now. That especially applies to investing. It’s never too late to begin investing and planning for the future, but the sooner the better. This is true in real estate, as buying a house, an apartment or whatever other type of property you’re looking for can pay off big time if you invest wisely in your 20s.

Owning a house rather than renting is often a good way to save money and set yourself up with a valuable asset in the future. However, renting it out can be even better as it’s a guaranteed source of income that can pay off your mortgage while also earning you some extra money on top.

Getting an Early Start

Many extremely successful people saw the value of investing in real estate at a young age and are now enjoying the fruits of their labor. One of my favorite stories is the 24-year-old college dropout who bought a 5-bedroom condo for $60,000.

By renting out four rooms to friends for $300, he was able to live for free while working. Mike Henkel scraped together enough money to buy two more properties in the town. Now, after 42 units, Henkel’s properties are worth $4 million.

His story is an extreme one, as he was maxing out his credit cards for each “leap of faith,” as he called. The stress and pressure was enormous, yet it paid off.

You don’t have to be nearly as ambitious as Henkel was in order to successfully invest in real estate. For some, such as Rob Mericle, it was commercial real estate that paid off. For others, such as Henkel, it was purely residential real estate that helped solidify their financial future.

The Loan

Whether you’re looking for that dream home to live in or a good property to rent out, you’ll likely have to work with a bank to get a mortgage unless you’re blessed with heaps of cash. Regardless of which type of loan you want, the bank will take a look at your credit history, which probably isn’t the strongest when you’re only in your 20s.

Your score will impact the interest rate of your loan. Fortunately, interest rates have been low for the past few years, with 30-year fixed loans typically at around 4 percent. Low interest rates make buying an even sounder investment, as it means you’ll be able to spend more on the principal of the loan rather than the added interest.

An obstacle to all potential property buyers is the down payment. This is typically 20 percent of a home that needs to be paid upfront. A smaller down payment is possible, but this likely means higher interest rates or paying private mortgage insurance.

However, as a younger person, you may qualify for first-time home buyer loans. Other loans allow you to put as little as 5 percent down if you plan to live in the home, which is a great way to make money on a property.

Renting Out Your Property

To make money off your real estate, which you want to do when you consider it an investment, you’ll likely be renting out your properties. Here are a few things to keep in mind as a young property owner:

  • You can do without a property manager, which requires you to pay them, if you live close by and can handle any issues that may come up with the property yourself. This is a nice cost savings.
  • That being said, you should protect your investment property by having a real estate attorney you can trust.  They can assist at any stage in the transaction, including negotiating lease terms, drafting documents, handling closing, etc. Make sure to include legal fees in your budget when underwriting your investment.
  • Make sure to add up your cash flow correctly. You need to account for things that aren’t immediately obvious, such as downtime between rentals and upkeep on the property.
  • Vet your renters carefully. You want responsible people who will pay their bills and won’t require any effort from you to oversee.

Making the Right Financial Moves

Buying makes financial sense. In addition to making money, you’re also learning fiscal responsibility at a young age. You’ll be far ahead of your peers, who probably don’t know an accelerated amortization from an all-in-one mortgage.

But most of all, investing in real estate while you are young gives you an education. The money is great, of course. Yet real estate investment teaches you to think in new ways. It requires problem solving and grit and determination to wait for the best deals. You will learn to assess things differently and understand money isn’t always the most important factor in an investment. Sometimes good investments require time, too.

Investing in real estate while you’re young will carry benefits that can last a lifetime. Do your homework, be aggressive and open your eyes. This will be a fun and rewarding path.


This article comes from our friends at Phroogal. It was originally published on January 20, 2016, and can be found on their website here.

Don’t Make These Credit Card Mistakes

About 63 percent of those under 30 years of age don’t have a credit card. That’s compared with just 35 percent of those over 30 who’ve chosen to opt out of the credit game.

Those who do have credit cards run into trouble paying their bills.  Many millennials are cutting up their credit cards, and others are choosing not to apply for credit at all. However, this may not be the best long-term strategy.

Although avoiding credit may seem like the best answer in the short term, it may not be your wisest move in the long term. Managing credit cards appropriately is one of the best ways to build strong credit scores. A strong credit score will open doors in the future — like when you apply for car loans, personal loans or mortgages.

Here are some tips to help you manage your credit card activities:

  • Be strategic

Use your credit card for purchases so you can protect yourself against fraud. If you use a debit card, you’re basically giving thieves and hackers direct access to your bank accounts. Instead, pay via credit card whenever there may be a risk. Also, be aware that credit card companies offer better security against fraudulent purchases made on your card.

  • Keep payments up-to-date

If you’re paying your credit card late, you will face high late fees and drooping credit scores. Paying a bill late will also affect interest rates and any loan applications you may file in the future.

  • Use credit cards sparingly

You need to know your money pitfalls. By knowing your weaknesses, you can guard against maxing out your card. Even if you pay the balance in full later, it can still affect your credit score. It’s recommended to not use more than 30 percent of your credit card’s limit. For even better credit scores, experts recommend using less than 10 percent.

  • Don’t carry a balance

If you carry a balance on your card each month, you may be losing more than you realize. Interest payments tap into your wallet and cut away at your financial freedom. Simply sit down with a few recent credit card bills and tally it up. Credit scores are also at risk if you continuously carry a balance on your card.

  • Make more than the minimum payment

By paying just the minimum amount listed on your bill, you may be paying twice or three times more for the item you bought. Is it worth it? Interest fees, late fees and over-the-limit fees will cut into your cash flow.

  • Review your statement

Be aware of your spending habits. Once you know where you are spending your money, it will be easier to see where you need to cut back. It will also help you catch mistakes so you can let your credit card company know right away.

  • Don’t use cash advances

Cash advances will cost you big in interest rates. Such fees are usually higher than the regular rates you pay on your credit card.

  • Be prudent

Despite any reward program the credit card company may offer, don’t charge more than you can pay off in a month. Also, be careful when making a credit card application. Apply for a card you are most likely to qualify for. A failed application still leaves an inquiry on your credit report.

If you’ve been afraid of wading into the world of credit, take heart. Don’t forget that there arefinancial advisors and other professionals who you can consult about your money management decisions. By monitoring spending and using some solid financial advice, it’s possible to avoid debt and build up your credit rating.


This article comes from our friends at Phroogal. It was originally published on January 14, 2016, and can be found on their website here.

The “High-Low” Method (and Other Restaurant Savings Tips)

Restaurants aren’t exactly frugal. The food is overpriced, you’re paying for the experience, and the booze is marked up like crazy.

Confession: I’m aware of all of this, yet I still love the experience of dining out. It’s an indulgence, but I budget for it and make my savings goals, so I’m fine with it.

At the same time, if I can find ways to save money on my habit, I’m all about that. A fellow restaurant-loving reader emailed me asking how I save money on food, specifically restaurants. I thought I’d share my favorite tips.  

The High-Low Method

This is a new rule I’ve implemented recently. It’s less about saving money and more about getting the most bang for your buck. I wrote about it over at Lifehacker and talk about it in the above video, but here’s the gist: cut out all mid-range restaurants. These are usually chain eateries that aren’t particularly expensive, but the food isn’t particularly great, either.

Instead, you mostly eat at cheap, hole-in-the-wall joints and save your money for a fancypants dining splurge. Check out the video and the post for more detail.

Find the Best Happy Hour Deals

Happy hour is a great way to dine out without spending a hell of a lot of money. I’ve recommended this a dozen times, so here’s a follow-up: find the best deals with an app or online tool. Many of them map your location, then list happy hour specials of nearby eateries.

Some establishments even offer free snacks at happy hour. I’ve never written anything more worthy of bold type. If you can’t find any on the app, simply Google “free food happy hour + [your city].”

Beware the Sneaky Restaurant Tricks

It pays to know how restaurants get you to spend more. This isn’t to say you shouldn’t order the daily special, but you want to make sure your spending is mindful. Here are a few sneaky restaurant menu tricks:

• Fancy fonts
• Not mentioning money
• Elaborate item descriptions

For more detail on each one, check out my full post.

Use Your AAA Discount

I was surprised at how many restaurants offer discounts for AAA members. Of course, these are mostly chains, but in my area, there are a number of independent establishments listed, too. While restaurants vary by location, there are plenty to choose from. Check the AAA website for your area, then navigate to Discounts>Dining.

Buy Gift Cards

Some restaurants occasionally offer gift card specials. For example, one of my parents’ favorite spots once offered a free $10 gift card when you bought a $50 one. My parents bought two, then got $20 free. If you frequent the restaurant, it’s an easy way to save money on food.

These deals abound around the holidays, so it might pay to look out for them around that time, then stock up.

Use a Rewards Program

Some restaurants actually have rewards programs for frequent diners. These are usually chain restaurants, but if you’re a fan of the chain, it’s worth checking out. The Counter, BJ’s, and Chili’s are just a few eateries that offer rewards. Similarly, sites like iDine let you earn rewards at different restaurants, as long as they’re partnered with the site.


This article was originally published on July 23, 2015 at www.brokepedia.com and can be found here.

How to Save Money on Your Next Car Insurance Policy

What would you do with a few hundred dollars in your pocket? Pay off a credit card bill? Take a weekend trip? Save for a new car? Those are all great ideas and they can become a reality simply by saving on your next car insurance policy.

But what do you have to do to find those kinds of savings, and is it worth your time and effort? Well, think about it this way: you could pay upwards of $1,500 for annual car insurance if you don’t look for any savings on your policy. So keep your mind on that extra money in your wallet! Here are some suggestions to help you determine if you’re getting the best deal and savings on that policy:

New Driver Safety Course

Are you a good driver? Can you prove that? If so, then you might be entitled to a discount. Several insurance companies have set up an online safety course for those they consider to be new drivers: anyone who has been behind the wheel for less than nine years. This test takes an hour to complete but could net you some serious savings. You’ve probably already taken something like this to get your license. Time to break out that driver’s handbook and cram for a new test!

GPA Discount

Full-time students who carry a 3.0 GPA or better could be eligible for a “good student” discount. Look for the companies that offer this type of discount because, hey, you’re already working hard to maintain those grades – why not get a financial break for it? In some cases that discount could be up to 25 percent less than what you’re currently paying in premiums.

Driving Record Discounts

Everyone knows that when you get into an accident and file a claim there is a good chance your insurance premiums will go up. The reverse happens to be true as well. You might earn a discount for driving without an accident for a certain period of time. Your driving experience is based on the amount of time you’ve had your license, beginning with your first learner’s permit. Every year that you are a licensed driver, even if you’re not actually driving, contributes to your safe driving record. If you’ve been doing a good job behind the wheel, it’s time to benefit from being a good driver.

Multiple Policies

There was a time when auto insurance companies just sold auto insurance. Now most major auto insurance companies sell all kinds of insurance policies, from homeowners to renters and even life insurance. Generating a new auto insurance policy might be the time to seek out discounts for your other policies. When you can bundle those policies together, you might earn savings across the board on all of them.

Mileage Discount

It’s no secret that auto insurance companies would like nothing better than if you stopped driving: there’s less risk for an accident to occur. That doesn’t mean you should give up your car altogether, but if you find that your annual mileage is pretty low then you could be entitled to a discount.

This discount in particular can help high school and college students score a big deal. You could go for days without getting into your car or at least only drive a few miles each week. Make sure your insurance company is aware of your mileage. They should also be aware of your correct zip code — where your car is “garaged” and not a P.O. Box. These details can all factor into your overall rate and potentially lower your monthly premiums.

This list of discounts is a great place to start looking for auto insurance deals, but don’t stop there! Check out group rates offered through clubs, organizations, or employers, and remember that fluctuating rates may make it worth your while to shop for a new policy on an annual basis. Yes, it does take some time and effort, but you owe it to your wallet to avoid paying more than you should for auto insurance.

Anum Yoon started and maintains Current on Currency, where she shares her hard-earned insights on money management.

Financial Independence: Growing Up Doesn’t Have To Be Scary

It’s my senior year of college, and a time of preparation for life after graduation. I’ll be transitioning from full-time student to full-time employee, but perhaps the biggest transition of all is that I am finally going to be financially independent. What worries me most is that there is so much about managing my own finances that I don’t really understand. As much as I hate to admit it, I honestly don’t know what I don’t know when it comes finances. And yet, I know that I can’t be the only 21 year old who feels this way.

So on behalf of others like me who may be worried about money and don’t know where to start, I’d like to share my story of how I’m preparing myself now to be on solid financial ground after graduation.

Changing my mindset

When thinking about how to get my financial feet under me, I quickly realized that my life philosophy on life, “live in the moment” was not doing me any favors. . As fun as that mantra can sometimes be for my social life, it isn’t the best approach to planning financially for my future. In fact, that mindset actually causes a wave of anxiety to wash over me when I think about financial planning.

So the first step in my journey was finding balance between my happy-go-lucky mentality and my responsibilities. And guess what? I was able to see that being intentional with my money actually allows me to live in the moment, not keep me from enjoying it. Taking care of my financial obligations first means I know exactly how much money I have left to see where living in the moment can take me.

What does that look like?

I’m not going to lie, even with the most logical rationale, changing mindsets can be hard. I work a part-time job that allows me to cover my rent, utilities, and groceries. But the thought of paying my own cellphone bill, car insurance, health insurance and miscellaneous expenses stressed me out. I knew I had to do something to prepare for taking on full financial responsibility. So, I set goals for myself to gradually get accustomed to setting aside more money for paying more bills. Here are just a few that got me started in the right direction:

  • Don’t spend all of my paycheck as soon as I get it. I need to cover my mandatory expenses first and then save the rest for next month’s expenses or an occasional social event.
  • Limit going out to eat with friends. As enjoyable as that is, it continually drains my wallet. Eating at home is considerably cheaper and healthier.
  • Cancel unnecessary subscriptions. If I’m not using it, it’s wasted money. These expenses can be easy to miss, since they’re often linked to auto-pay. .That’s just another reason to scrutinize my monthly expenditures.
  • Record my expenses. Getting a visual of where and how I am spending my money is much more effective than keeping track in my head. Doing this will help me see where I should cut back on certain costs.

Setting goals seems like a hefty task, at first. But as hard as it can be to sit down and make concrete plans, it’s worth it. I have realized that there’s a lot more freedom in being financially stable verses impulse buying an outfit that will be out of season before I know it.

What I’ve learned

Let’s face it; life after college is going to be expensive. It involves more than just the monthly rent and utilities. And although I admit to not knowing everything about financial independence, one of the best strategies I have learned is that making a budget is extremely important. It sounds cliché or like a broken record, but it’s true.

Mastering a budget now when I have limited expenses is going to help me greatly in the future when I have to plan for more items like a mortgage, childcare, utilities, health and life insurance, credit card payments, student loan repayments, taxes, car loan payments, and a lot more. Learning to live on a budget now will ensure that I am able to meet all my money obligations while also allocating funds for saving, spending, and investing. And living in the moment!

Although I’m still learning new money strategies, working through my budget eases a lot of the stress I used to feel when I thought about my finances. If I could give a little piece of advice to my peers out there who may feel the same way, it would be to have an honest conversation with yourself about what you don’t know. Ignoring the issues or procrastinating isn’t going to ease your money stress (just the opposite!). Educate yourself about how to create a budget, and remember to spend wisely. Saving money for the mandatory expenses before the discretionary wants is not always fun, but realizing your ability to handle whatever life throws at you is the best gift you can give to yourself.

Good luck!

The 10 Most Expensive Habits of Americans

Did you know you could be wasting thousands of dollars a year without even realizing it? That number is drawn from the habits many of us have — most of which aren’t even good for our health or well-being.

Some of those habits are presented below to help you realize how much money you’re really wasting.

    1.  Getting Coffee

A specialty coffee at Starbucks can cost about five dollars. If you have one every weekday, you’re spending $25 a week. In a month, you’ve spent $100 and in a year, $1,200. Think about all of the things you could have bought with that money!

An alternative is making those tasty beverages at home. Purchase an inexpensive espresso machine and learn how to make lattes, cappuccinos and macchiatos. You can have these treats whenever you want and they’ll cost substantially less.

  1. Eating Out

Eating out is easy, but can be much more expensive than cooking at home. Not only that, eating out usually leads to eating more than you need along with foods that are not as healthy as a home-cooked meal.

Let’s do some math: Say you get spaghetti and meatballs at an Italian eatery. The dish will cost you at least $13. When you add a drink and the tip, you’re close to $20. If you do this three times a week with similar costing meals, you’ll be out $60 a week. That’s $240 a month for a grand total of $2,880 a year.

You can have a similar meal at home for much less. A box of spaghetti is about one dollar and the sauce could cost you around three dollars. The meat for meatballs can run about four more dollars. The total is just eight dollars — much less than the meal you’ll get at a restaurant.

  1. Paying for Unused Services

Most people have a service automatically debited from their checking, saving or credit card account. It may only be five or 10 dollars, but that adds up. You can always use the money to buy more groceries or save for a rainy day.

  1. Rolling Debt Over

Whenever you have debt and roll it over, you end up paying interest. Interest is money you don’t have to spend, as long as you can pay off your credit cards or other loans each month.

If you have the cash, pay off your debt. You will save on interest.

  1. Smoking

Approximately 40 million adults smoke cigarettes in the United States. Cigarettes can get expensive if you smoke heavily. Some people can go through a pack a day, and the average cost is five dollars for one. That’s just like getting that Starbucks coffee.

Just think — if you have one coffee a day and a pack of cigarettes a day, that’s $50 for each work week, adding up to $200 a month.

  1. Drinking Alcohol

The Bureau of Labor Statistics reports on people’s expenses. In one year, they found thatAmericans spent about $435 on alcoholic beverages such as beer, wine, hard liquor and mixed drinks. This amount is much more than what is spent on non-alcoholic beverages.

  1. Throwing Food Away

Americans throw away 222 million tons of food. This is about 20 pounds per person each month. That’s a lot of money wasted.

To cut back on spending so much money, use up all of the food you have on hand. You can do this by cooking only as much as you eat or by storing the leftovers. Don’t purchase as much food as you usually do at the grocery store. Cut back so you don’t end up with spoiled vegetables and fruit.

Try to plan your meals, so you don’t have as much wasted throughout the week. This habit is a great way to stay within a budget, too.

  1. Driving Everywhere

Most people will consider driving somewhere before they think of walking or taking some other form of transportation. Driving not only pollutes the Earth, it also spends gas. Gas is expensive, and you can save money by walking or choosing other ways to get places.

You may just tell yourself, “Oh … it’s only a few dollars saved.” Those few dollars turn into hundreds over time, so why waste the money when you don’t need to?

  1. Opting for Low Quality

Low quality items or services can seem like the best choice when you’re budgeting because they cost less. However, you need to think long term when it comes to investing in these decisions: If you will need to replace a cheap version of whatever you’re buying, or if the service you paid for was subpar and you’ll need to get it serviced again in the next year or two, you can justify spending a little more for better quality. You can usually save money by spending more for better quality than by buying low quality replacements over and over again.

  1. Not Shopping Around

Yes, shopping around takes time and effort. The process can save you a lot of money, though. Whether you need to look into a retirement community, a pet sitting service, or a new microwave, whenever you need to purchase a product or service, call a few different places to find the best price. The couple of dollars you save will end up accumulating in your bank account, making you very happy down the road.

Start changing your habits today to save some money! Your new habits may take some time to get used to, but the extra money will definitely make it easier.


This article comes from our friends at Phroogal. It was originally published on December 30, 2015, and can be found on their website here.

4 Steps to a Money-Making Future

“It’s not about the money, money, money. We don’t need your money, money, money. We just wanna make the world dance. Forget about the price tag.”

If only Jessie J’s lyrics were true more often.

As high school students, most of us haven’t started thinking about retirement plans or future investments. But there are a few simple things any teen can do to set themselves up for a successful and profitable future.

The Mash talked with Econ Illinois President Lori Berkes-Nelson and Chicago-area teens about what you can do today to save for the future.

If you don’t already have one, consider opening a savings account. The money you put away today could help you discipline yourself in the future.

“Virtually, what it does is that it teaches (you) not to live paycheck to paycheck,” Berkes-Nelson said. By the time you’re earning your own money, you’ll be used to putting away a chunk of change. You’ll also have a better idea of how much money you need to put away to support yourself.

Niles West junior Tina Conis has been putting money in her bank account since she was 8 years old. “I make a deposit about twice a year, one after Christmas and one after my birthday,” Conis said. “Even though interest might not be a lot, it’s still a lot better than what you would earn from it sitting in the piggy bank.”

Birthdays, Christmas, Hanukkah, graduation and your weekly allowance are all money-making opportunities for teens who don’t work.

You probably don’t want to save every single dollar—or even half of that money. But by saving just 10 percent (one dime for every dollar) of your money, you’ll have enough to spend on fun stuff and have some left for the future. For example, if your parents give you a $10 allowance, you would put away just $1.

Niles North senior Justin Valencia said he’s already seen the benefits of putting money aside. “I save more than I spend so I can still buy myself stuff that I really want and save backup money at the same time,” he said.

Making a list of your wants and needs is also an important step. Whether you use an app on your phone, an Excel spreadsheet or a handwritten diagram, there are many ways to organize a budget.
By doing so, you allow yourself to keep in mind how much money you need to put away for certain things and how much money you can actually save for your future.

Berkes-Nelson also suggests sitting down with a parent and going over general, everyday expenses.
“It helps you formulate on things, whether it’s gas or transportation if you want to buy something more expensive,” she said.

As you get closer and closer to the day that you have to put down a deposit for college, there are many ways you can avoid drowning in debt. Take time to research grants and scholarships. Even if it’s just $100 or $500 here and there, the money adds up.

Though it might not always be enough to pay for a whole year’s tuition, the money you get could pay for books, supplies and boarding fees.

“Knowing what your current financial status is and knowing eligibility for financial aid and identifying scholarships … those are really crucial things to look at,” Berkes-Nelson said.

Although having college loans might scare you, Berkes-Nelson said she encourages students to take consider it.

“I think it’s important to note that it’s OK to take out student loans. It goes back to the economic decision, ‘Is this going to be valuable for me?’ ” she said.

College might be expensive, but it’s also an investment in your future. As long as you’ve considered all the financial variables, you shouldn’t be scared to take the leap.


“This article, 4 Steps to a Money-Making Future, was originally published on themash.com.”