A Million Bucks by 30 by Milos C.

The Random House Publishing Group, a division of Random House, Ine.,

New Yark.

BALLANTINE and colophon are registered trademarks of

Random House, Ine.

This amazingly awesome book is dedicated to my parents, Naney and larry. Mom, don't worry, there shouldn't

Library of Congress Cataloging-in-Publication Data

buying this before it hits the bargain bino

Carey, Alan.

A million bucks by 30 : how ro overcome a crap job, stingy parents,

and a useless degree ro become a millionaire before Car after) turning

thirty I Alan Corey.

cm.

ISBN 978-0-345-49972-1 1. Finance, Personal. 2. Saving and investment. 3. Investments. 4. Businesspeople-United States-Biography. 1. Title. II. Title: Million bucks by thirty.

HG 179.C6825

be any embarrassing grammar mistakes. Dad, thanks for

2008

332.024'OI-dc22

2007028326

Printed in the United States of America www.ballantinebooks.com 987 6 5 4 3 2 1 Book design by Glen M. Edelstein

Contents Introduction

PART 1: Scrounging, Scheming, and Saving 1: Na'ive in New York

~lIapter

2: Inspiration through Infomercials

3: Adult Education 4: Plastic Surgin'

24 30 39 53

Chapter 5: Excel-ing in Romance Chapter 6: Hail to the Cheap PART 11: Estate of Affairs

Chapter 7: Getting Real (Estate) Chapter 8: Splitting Lairs Chapter 9: Getting Testy Chapter 10: Tripped Out Chapter 11: Basic Instincts

65 77

89 99

PART 111: Brokering and Budgeting

Chapter 12: Treasure Hunt Chapter 13: Friends Who Take Interest 14: Rooms with a Few

109

117 126

Contents

Chapter 15: Pressing Matters Chapter 16: Running for Coverage

136 144

PART IV: Howdy, Partner

Chapter 17: Smells Like Team Spirit 18: Perfect Pítch

Chapter 19: Home: A loan Chapter 20: Flipping Out

153 160

167 173

In t r/o;d~~t:i(6 ...t;;,

PART V: Taking It to the House

Chapter 21: Chapter 22: Chapter 23: Chapter 24:

Silent, but Deadly Profitable

185

Bar Tender

190

Boomtown, USA

198

Declaration of Independence

203

OKAY, here's me in a nurshell: Coming out

college, 1

was scared of the opposite sex, 1 hated where 1 lived, 1 had Acknowledgments Glossary

212 214

no viable skills, and the worst of

1 was fIat broke. Maybe

right now you are better off than 1 was, maybe worse, but 1 was in a place where 1 wanted a change. To change every thing. 1 wanted something better. It wasn't peachy being a newly sprung college grad with a crappy day job, trying to get by in my suburban hometown living in my mom's base ment among abandoned exercise equipment and slowly leaking beanbag chairs. It didn't take me long to figure out thar wasn't rhe way 1 wanted ro live-that is, on someone else's terms and schedule, with a limited social calendar, and, not to mention, undet financial constraints. So, at the age of twenty-two, 1 happened upon an

so crazy 1

thought it just might work: 1 would become a millionaire by the time 1 was thirty. Of course, 1 wasn't

first person ro set this goal,

not sure how many people actually accomplish it, and

xii

Introdudion

xiii

guess is rhat those who have probably went about it dif ferently than 1 did.

to teach me the value of money by giving me free money. But I rook her offer as lesson number one in personal

You see, I'm just a plain 01' gravelly voiced dude with no special talents. 1 dídn't beco me an investment banker or a high-powered lawyer, and my famíly's not loaded. When 1 decíded to be a llHll1UHi:11 by thirty, 1 just accepted a

finance: Refusing free money is stupid. My $20 weekly allowance for mowing the lawn quickly became a a-week bank deposito Same with the money I was earning

in a new town, leaving behind a ridiculous comfort zone of familiar surroundings and friends. And, of course, my mom's weeldy Chore Wheel. 1 left thar all behind to $40,000 a year as a technical-support guy in one of the most expensive cities in the world. 1 definitely didn't know what 1 was getting into, bur 1 was excíted about it.

from mowing my neighbors' lawns. And their neighbors' lawns. After a few months of crazy lawn-mowing binges, my mom reneged on her deal (teaching me another les son about money: Ir ain't forever). She thought I was tak ing advantage of her offer, but l' d like to think 1 was being opportunistic (something 1'11 get into in more detail later in the book). Regardless of the lost matching contri

1 embarked on my new life wirh a freshly printed col lege diploma and $10,000 to my name. That's a lot of money a twenty~two-year-old. But because I made sorne

burions, I kept adding to my savings account throughout middle school and high schoo1. My job dressing up as the Chuck E. Cheese's rat earned me a regular paycheck, as did

financial decisions before and during college, I was leaving school ahead of my friends, financially speaking. 1 went to a university thar offered me a full scholarship, 1 kept ir all four years. (That doesn't mean I'm smart; it

occasional lifeguarding and coaching duties at the local YMCA. And even in high school, I kept mowing a11 those lawns. Twenty doIlars for an hour's work is hard to pass up,

means my college had loose standards.) It wasn't the school of my dreams, but 1 knew I could make ir work. Ir took me a semester

01'

two, bur 1 eventually found a way to balance

my studies and stands (both required someone shout ing "Hurry! Befare the girls/cops here! Another chunk of that ten grand came from money I been saving since sixth grade. My morher, in an efforr' to make me interested in personal finance, had promised to double anv amount of money I deposited into my account. Looking on it now, it made no sense her

especially to someone with a limited skill set Iike me. tike most, I continued working in college. I sti11 life guarded for a bit, waited rabIes, and bartended. 1 even earned a big payday by becoming an accidental entrepre neur. My roommate Jeff and 1 wanted to throw the biggest party possible in the Úeld next to our house. We rented generators and Porta Pottis, hired bands, advertised on stations and in newspapers, and bought fifteen kegs the party. Ir was a bit risky and definitely a lot of work, bur we each invested a sizable portion of out savings to do it. At a minimum, we just wanted to recoup

Out

expenses.

xiv

Introduction

So we had to charge

a head. It paid off, though: We had generated so much buzz among aH the students that more than six hundred peopie came! Jeff and 1 made over $2,000 in unforeseen profit. Ir was an amazing feeling seeing that much cash on our living room tableo If it were sitting in a suitcase, 1 would have sworn we had done something ille gal. Okay, full disclosure: Considering that 1 was twenty, 1 waJ doing something illegal. But it was a memorable and profirable night due to our foresight of securing party per mírs ancl observing noise ordinances. Memorable and prof itable mainly because for once ir didn'r require yelling "Hurry, before the cops ger here!" Anyway, thar was rhen, and this is now. With $10,000 in savings and a dream, I did become a millionaire by rhe time 1 was rhirry. The point of this book is to ler you know thar you can too.

Introduction

out the book you'U see boldfaced financial terms. Simply turn to the glossary for an explanation of what they mean. Reacl the book any way you want. Read it from statt to finish; read just the lessons, tips, and box scotes; 01', if you don't reaUy like me yet, read ir from back ro front and watch me go from a millionaire ro being broke. My hope is that you'll see that there is no magic secret to being a millionaire, bm, instead, that with focus, dedi cation, creativity, and sacrifice, you can earn a big payday just like me, Not everything 1 did will apply ro your cir cumstances or appeal to your lifestyle. (Eating ramen every day for three months may be one of them.) But I'm confi dent that many of my strategies will work, or, at the very least, will serve as the inspiration for you ro come up with your own creative financial solutions. Hopefully, legal, con science-friendly solutions (or at least kidney-friendly (mes).

In rhe following chaprers, 1'11 break down exactly how I made a million bucks, and rhe strategies and steps 1 took

Regardless, rhe basic principIes that got me rich are univer sal, and the best news is that putting them into action is

along the way. None of them involves selling kidneys from a Las Vegas barhtub, pur, you know, whar happens in Vegas srays in Vegas, eJpecially i{ it'J your JOld-olf kidrtey. But rhey do involve key financial decisions thar 1 made: my journey from fledgling real-estate investor, to landlord, to seven figure flipper, and the gory derails about my life as (accarcl

absolutely free. In short: If 1 can do ir, so can you. Good luck on your

ing to most of the people I've clated) one of the biggest cheapskates on the planet. At the encl of every chapter, 1'11 show you how I'm doing with a running rally of exactly how much cash I've got to my name, as welJ. as a final "Alan Carey 101." Through-

patb ro creating your very own million, and, most of aH, have fun! 1 sure did.

Atan Carey

Chapter 1

Na"ive in New York THIS was me: college? No more classes??? \Vctit, 1 just graduated Does thiJ mean 1 do what waJ my IttJt rlOw? 1 want to be with them, eating jilth, kids t~re úz filth-that'J my lijé. 1 can't dril1kÍ11g filth, al1d 99-cent beers. and that. Every 99-cent toilet paj}er. I'he

store rules! 1 can't leave. Oh

nzan, what about the So nzany girú! of them are actu attraeted to me, even with my complete diJregard normal bathirlg and laundry habits. You know how a

iJ either clean dearl. Haven't

me every or the jJerfect lijé. 1 arn tvithin shaved sinee a short of every single /rimd of mine, not to mention every bar, and on top all that, 1 am financing this ,d"'¡';,,>? lifestyle 012 my meager irIcorne frorn eoachi12g basketball at the Y 1 don't wa12t to get a real jobo are worJe livesfor Jure, but rt(me 1 can thÍJzk are better. Darnn, 1 Jhould ,flrOfrhod out for five yean like everyone

What the hell am 1 going

A Million Bucks by 30

to do now? 1 can't be that guy who sticks around collegelar no rea son. 1 mean) 1 can be, but 1 don't want to be. 1 hate that guy. Barb g¡tidance counselor says to ga get a real jobo Yeah} thanks} Barb. M y parents must have called her and fed her that lineo A real job?? Doing what? lt's not like she does anything great. Honestly, 1 dídn't know what my major was until my second to Iast semester of college. 1 finalIy settled on man agement of informatíon systems. What the Fran Tarkenton is an "information system"? And why does ir need manag ing? That's what I'm majoring in??? Barb toId me that if I changed my major, 1 wouldn't be able to graduate in four years. So l'm stuck with it. Luckily, my older friend Clay majored in MIS too, and he coached me through my Iast two semesters in college. He expIained that my major was about computers-databases, specifically-and that l' d make bíg money once 1 was done wirh school. I decided 1 could Uve with that. Like most business students, the prospect of a huge salary could motívate me through any thing. 1 finally graduated two semesters la ter and was thrown headfirsr into full-fledged adulthood. Adulthood is bizarre! All of a sudden 1 was aboye couch surfing, started caring about the weather foreeast, and was drinking microbrews. What the Fran Drescher was happening to me? 1 was turn ing inro my dad! Or even his dad. But that's what real jobs do to you. You start earning something aboye minimum wage for once, and you srart thinking like an adult. 1 had been so happy being a broke guy with an open schedule. Hell, everyone was broke and

Na'ive in New York

had an open schedule. Now that 1 had a ¡ob, 1 couldn't anything with anyone. 1 had entered this wholc new world of regular working hours and paychecks. Ir rook consider able self-discipline and self-control for me to handle awkward rransition. Once again, my buddy Ciay helped me through it. It took many beers (microbrewed beer), but 1 got over it. firsr real job after college was in Atlanta, building computers for a family friendo Ir d¡dn'r paya whole lot, but it had perks. No dress code, you say? Then college clean it ist Although 1 wasn't making big bucks, the job allowed me to buy time to figure out what 1 really wanted to do with my life. Believe me, living in my mom's basement (which was the currenr state of aff~lÍrs) was nor whar 1 wanted to do with the rest of my Jife. On my drive ro work every day, I would strategíze about wherc my life should go. Rock star? Fireman? Evil genius? I considered everything. My one obstacle was that 1 didn'r have anyrhing to fall back on except a diploma in something 1 didn't care about. 1 was lost. 1 felt that to be tmly happy, 1 had ro leave my comfort zone and my town behind. 1 always liked bcing a litde uncomfortable; ir meant that I was learning something. I couldn't figure out if 1 wanred to move to New York, Australia, or somewhere in Europe. 1 knew Los Angeles had hot women, so it was al ways at the top of my listo 1 figured there had to be sorne at tractive woman on the beach who needed her informatíon system managed. If only she could find my résumé! For my first five months at work, 1 saved as much

A MiUion Bucks by 30

Na'ive in New York

money as 1 could out ofeach paycheck. In berween building compurers, 1 sent out résumés. 1 seot rhem to every com pllter-based job opening in New York, Los Angeles, and overseas. 1 wanted a change, a loearion ehange, but ir wasn'r coming easy. Of rhe more rhan seven hundred fifry résumés seot, 1 got rwo viable replies. The {irsr response was fram Dublin, Ireland, and they wanted ro know if 1 knew some programming langllage thar 1 had never heard of before. A response of "willing to learn" did nor get me rhe jobo But I didn'r stop searching. Looking baek now, I' m pretty sure it was my lack of a pro fessional résumé rhar garnered me only rwo decent replies. Using the word jJroJicient on a résumé has a poinr of dimin ishing rerurns after irs tenth appearance. My e-mail address ar rhe time was rhe first one 1 out of sehool. Thar meant 1 gor ro piek ir out myself! 1 rhoughr rhar Yahoo! and AOL wete way too conven

tional fol' a dynamic person Hke me, so J waoted an address thar would help me srand out; somerhing rhat would help me make big money in a big ciry! 1 also waotcd somc thing ro hclp me meer some ladies. (That's my motiva rion with most things in Efe; ir's a wonder I'm not a production assistant on The View.) 1 also wanted somerhing free. (Okay, that\ real1y my motivarion in life.) So afrer some around 01' Net, 1 registered somerhing free, fun, and what 1 thoughr might impress rhe chieks: BigAI@models.com. 1 honesdy rhoughr my MIS degree a "modeling relared" e-mail address were kcy reguire meots ro making ít big. Yes, of eourse, the plan backfired.

'-'_._."-

beeause it was utrcrly lame. Anorher problem But nor became apparent when 1 l'ealized rhar everyone was reading my e-mail name (written "bigal") as "BiGa!" rather than "BigA!." '1'his was nor exactly how 1 was rrying ro market myself ro rhe world. 1 did get a whole lor of dudes cootact me, rhough. Dudes wirh plenty of offers, but nor of the employmeot variety. Tweoty-one weeks ioto my ger-out-of-my-mom's basemeot campaign came my second repIy, from a starr company in New York thar apparently read BigAI rhe way ir was inrended. A phone interview weot wel!' An in person ioterview weot even betrer. And rhe next rhing I knew, I was getting offered a job in NYC! T realized thar a locaríon ehange would makeme happy, and that it was whar my liJe needed. On rop of rhat, 1 was rclieved (and a bit proud) rhat 1 hadn't sropped sending out résumés

1 achieved my goal. The real worId wouId rrear me okay as long as 1 füllowed my instincts and dreams-and didn't falsely represe11t mvself as a femaIe bisexual model. didn't have a high salar y for Manhattan, This new and ir wasn't a job in managing information sysrems, ex actly. 1 was in eharge of a 1-800 hotline and answering guesrions about the company's software. 1 figured 1 couId do rhar short rerm, maybe a real business e-mail address our of it, my firsr business card, and then pursue my life's ambitions. Thar is, once 1 figured our what those ambirions wel'e. I knew I'd evenrualIy find my parh ro earning the big bucks after my move ro the big ciry, and rhar ir wouldn't be from this íob. Bur 1 felr rhar because l' d

A Million Bucks by 30

NaIve in New York

of the place_ The apartment wasn't too bad. The wallpaper Extreme Cheapskate Strategy Don't pay for Internet access. With more and more free Wi-Fi in public parks and on university campuses, you can pretty much log on from anywhere. You could even hijack your next-door neighbor's connection if necessary. If wire less ¡sn't your thing, you can log on for free at most libraries or go to Netlero for free Internet access. Ves, it's dial-up, and you have a lot of ads, but free is free, and you can still check your e-mail, which is all you really use it for anyway.

changed my situaríon to be in New York, 1 couldn't be off. That January 1 moved into an apartment in Manhattan. It was during a snowstorm, and 1 unloaded my stuff with the help of my new roommate, a work-friend of a friend of a friendo My share of the rent was surprisingly cheap New York City-$400 a month-but that was my payoff for obsessively hunting for an apartment. After scouring and firing off multiple real-estate si tes, room mate mass e-mails to everyone 1 thought might have alead, 1 found a place so cheap, it seemed to wow everyone. And that $400 even included utilities! 1 didn't care what it looked like. 1 had agreed ro it from my basement in At lanta, sight llnseen. 1 knew 1 would be happy just being in New York. Upon arrival, 1 unloaded my stuff and finally got a tour

in the living room was yellowing, my room was painted pink, but, thankfully, the place had working faucets. Good enough for me! Anything was berter than living back home and under my mother's rules. 1 was really happy (and proud once again) that 1 had upgraded my lifesryle in such a short amount of time. 1 was making ir, sort of. A month later two friends from home moved ro New York and got an apartment within a short subway ride of me. Just twenty blocks from me, they were paying triple in a smaller place. 1 encouraged them to keep looking rent better deals, but they rook the first place they find. Ir seemed crazy ro spend that much on rento 1 knew thejr incomes were going to be even less rhan mine, but being fresh out of college, they wanted to "live it up" a bit. point ro them that "living it up" did 1 wanted ro make not usually mean paying a fortune for abad apartment, but then again, my steady diet of plain pizza and ramen elimi nated me in their eyes as an expert on living it up. Whíle they spent their weekends shopping and deco rating their apartment, 1 took my weekend s to explore my neighborhood.l quickly learned that Spanish was the only language spoken within a ten-block radius. 1 had taken Spanish in high school, so 1 figured ir would come back ro me eventually. However, alll could recall was "Yo bebo de vez en atando l¿:¿ con mi abuela. JJ A phrase thar is not hclpful in any sitllation, really. No one, Spanish speaking or not, wants to hear rhat "1 occasionally drink milk with my grandmother." Regardless of the communicarion failure 1

A Million Bucks by 30

had with my neighbors, I was in heaven. I couldn't believe I accidentally ended up living in the coolest place in the world. Imagine being in one of the cultural pavilions of Epcot, but san s tourists in fluorescent ball caps, and you'U have an idea of what life was like for me. It was a dream come true. This was 180 degrees from the Adanta suburbs, and it was amazing. My friends also loved their place in the more upscale part of the city, and I admit it did look niee. But it seemed to be a waste of money. My neighborhood had culture, flair, and character. I didn't see that where they lived. Their block seemed more manufactured and main stream, or, basically, un-New York like. 1 was happy to furnish my place with discarded furni ture that I found on the sidewalk. It felt like my sruffhad a story to tell, or an interesting liLe, and 1 was jUSt putting ir in my home to retire. New things didn't excite me, espe cially if I had to pay for them. I was aIread y feeling the nancial crunch ofNew York, and I had to save money every chance 1 could A few months flew by. I got acquainted with the city and started to feel at home in my surroundings. 1 smiled at all my neighbors in the elevators and on the sidewalks. one neighbor who did speak English always thought that I was my roommate; he would continue conversations with me that he'd had with hirn, and I chose to just feign under standing him. 1 mean, we didn't look anything alike, but we were the only white guys around, so 1 didn't mind the slipup. But what I couldn't understand is why no one would visit me.

Naive in New York

I had made sorne new friends in my short time in New York and told people where 1 lived, but no one would come by despite numerous invites. 1 wanted ro show them the awesome restaurant on the corner where no one spoke Eng lish, and how big my place was for the little rent 1 paid, and the cool view of Yankee Stadium from my bedroom win dow. Basically, 1 wanted to show off. And then one day, five months into my New York residency, one of my friends in the nice apartment finally told me why they wouldn't come visit me. We were on the phone, and she huffed, "Alan, you want to know why we're not coming to your place? Because youlive in the projects!" The project.f?!?! You know the projects you see in the rap videos? That was me. I was there. 1 was living in those projects. My roommate assumed 1 knew this the whole time and never mentioned it ro me. 1 was a resident of the projects in Spanish Harlem in Ncw York City for five months. jesus H. Lopez! And the best thing was that no one in the neighborhood had ever given me any beef. Either I was innocently hardcore, or the projects ¡ust weren't that scary to me. 1 mean, I heard gunshots almost every other week, but 1 thought that was what living in New York was like, not what living in the proiects was like. After check ing to make sute that my underwear wasn't soiled, 1 patted my nalve self on the back. 1 thought it was pretty freaking cooL I let the news settle in-and then looked around, grinncd real big, and couldn't wait to embrace more these so-called proiects. As far as 1 was concerned, this pro ject was a success.

A Million Bucks by 30

Na'ive in New York

1 had already found the 99-cent store there, but then r found a real cheap grocery store too. And that's all 1 needed. 1 was actually able to continue my college lifestyle a bit. My

aH means, take a cab and just budget for occasions like

new job had my favorite perk. That's right, 1 was still college clean in New York. Plus, the projects made it hard ro spend big sínce all the businesses there had a bargain angle to 1 was, in a way, forced to be thrifty. My friends back home were buying their fírst cars and new work wardrobes, and incurring other miscellaneous expenses, while 1 was content not being image conscious or spending money to match a new lifestyle. And it seemed to be what most peo

of the projects-is being smart, confident, and alerto Don't walk with your head down and with headphones on in an unknown part of town. If you look like a victim, you are more likely to be targeted as a victim. However, things so ir's best to be alert and safe. happen for no reason at

pIe around me were doing too. 1 was hanging on to that col lege life, financial1y speaking, even with an honest-ro-god

nior citizens (always bargain friendly). Anyway, it's all about sacrifices for the greater good.

salary. lloved my situatíon so much, 1 lived in the projects another seven months. This wasn't just an apartment to me, it was my home.

This was my first lesson in New York finance: The more you give up, the more you gain. Choose wisely. rt's far bet ter ro start out in the projects than it is to end up there.

these. I've found that the key to staying safe-both in and out

Maybe living in the projects ro save money isn't for you, but instead consider living in the uncool part of rown. Or one with a farthcr dr¡ve. Or one known ro have a lot of se

As my friends made it pretty clear to me, living in projects isn't for everyone. Obviously, no break in rent is worth not feeling comfortable in your neighborhood. That said, that doesn't mean you have to live in a super-fi:mcy

AlAN COREY 101

condo to feel safe. Living with a couple of roommares is a great way ro be able ro aHord an apartment in a "nicer" neighborhood; you maybe sacrifice some privacy, but you ofren get more space for your money and a larger selection

Follow what makes you happy. rf you have that feeling you belong somewhere else, doing something else, being with someone eIse, you should follow that instínct. It is best to Uve life on your own terms. If it doesn't help you

of places where you can afford to live. (Three bedrooms generally do not cost three times as much as one bedroom.)

become a millionaire, it will at least make you a happier persono You are the catalyst for that change, and it's rare1y

If you use public transportatíon, don't live in a place that's a desolate street or a long walk away from the train or bus.

easy tú do. Major changes, like graduating from school, getting your first job, or moving to a new require being able to adapt easily. If you don't like it, make another

And if you feel uncomfortable going home late at night, by

Na"ive in New York

A Million Bucks by 30

Alan's Strategies for Apartment Hunting

6. Rent a furnished apartment, or just don't buy new for your rented apartment. That beautiful new $700 couch

1. Inform everyone that you are

for a place. That great

deal might come from a friend of a coworker's pet-sitter's

might not fit in your next apartment. Stick with used or dis carded furnishings until you buy a place of your own.

7. Don't hire a broker. Good deals can be found if you do the

therapist.

2. Look a few months in advance. If you are lookjng for a great deal in a week, jt's not going to happen. It's even less likely

And don't even look at Internet listings that carry a broker's fee, however tempting they may be.

to happen when you are looking for a place within twenty four hours.

3. Be

to make sacrifices. The longer the commute, the

more unsavory the neighborhood, or the lack of close restaurants usually means jt'lI have a much cheaper rento

change. Any change can come :lnd persistence. Just don't give up. If a change is not possible, then your environment should not determine your happiness. Your outlook does. 1

You don't need to have the coolest place in the world right

didn't know I was living in what many might caIl an unsa

out of college. Postpone it until you have a million dollars.

vory part of town. Even after 1 found out, I still enjoyed the the interesting people, and the ad came with it. I was in vcntures stories to groW, ¡carn, and and that's aH that mattcred to

4. Bargain with the landlord. Many landlords are willing to trade $50 a month for you to take care of all the extra stuff around the property (putting out trash, 5weeping, mowing the yard, letting in repairmen, and so on). It doesn't hurt to

me. The rest was just gravy. 1 was willing to make sacrifices

request a two-year lease instead of a one-year lease in ex

!ór the greater good of myself and my finances. 1 know that I ife does not take a predictable path. The best Uves are lived

change for lower rento The allure of a long-term and reli able tenant is worth it to most landlords. It should go

those who can adapt to any path.

without saying, but generally any nonshithead vibe you give your landlord is for the best. So always try to be nice!

5. Be willing to live with roommates. Itcould improve your people skills in a "how am I not going to kili him" sort of way and also could save you a bundle in cash.

A~E TWENT'f'~TWO

Checking account:

$9.000 (after the· ....ove)

Total net worth: $9,000·

Inspiration through Infomercials

Chapter 2

Inspiration through Infomercials WOW,firJt hour

dCly jobo ThÍJ A loto/1)eople who I JUJt met are

A lot

Jíon. I'm JuppoJed to be the.re people on the phone WlJat, ex.:. I'1Je reatly to learn the name (l thiJ company. PirJt two (allJ are ~f we Jetl ardo parts. l'm pretty (ertairz we don't. I mean, 1 hope lije don't, because I'rn tetling everyorte we bOH is too b'ISV to talk to,

I'm JUJt wínging it unti! I get in

"No, Jorry, we don't have any auto partJ. l'óu JOulzd like you are from the South. j~re you /rom the South? Me too!" In minutes) 1 learn that Richewd Pettis laJt (t11) race was in Atlanta and MÚJiJsijJpi's state beverage iJ milk. ThiJ ' actu:atly be interesting. Ahhhh, another catler. have a (omputer question?" Oh shit, computer qttestion. There's no one to trem.rfér this to? et'eryot!e gol Okay, let'r Jee how long he'tl wait on hold Damn, twelve minutes.' Okay, buddy, I'!! try to tmJwer yOl-tr ques-

tion. You want to do what? I no idea what words ym/re mean. YetJh, it's probably be.rt y01l e-metÍl yOlir qttestions in rather than it didn't take me long to figure out tbat 1 didn't like having a day jobo 1 think it took me about four hours. Right around lunch break, 1 was ready ro quito 1 was in York, wanting to see New York, do New York things, and be a New Yorker. But l had to work eight hours five a 1 couldn't helieve thís would be my life fol' next forty years. Plus, I've never good with authority, and, being the new guy, 1 was the subordinate ro everyone. It sucked. 1 had ro find a way to spend my days and make money that was better than being bossed around and told ro do things 1 didn't want ro do. 1 didn'r want ro rely on someone else for my financial security and definitely did not want ro sacrifice my life far something 1 wasn't the least interesred in-namely, computers. 1 just wanted to rely on myself and do what 1 wanted tú do all day, every day. the rock-star/evil-genius thing was the way ro go. One night 1 fOllnd myself zoning in on a late-night in fomercial. 1 couldn't get enough of watching a dozen lionaíres with gigantic checks, bad hair, and three teeth cxplain how easy it was to be rich, young, and retired. 1 was transfixed. lf they could do it, 1 couId do it. There Was no way these guys were smarter than me; they sounded like Jeff Foxworthy with a head injury. At Ieast 1 understood that an oversized check fooled exactly no one. 1 watched the same commercial over and over and over again, looking for new nuggets of informatíon on secrets of their success.

Inspiration through Infomercials

A Million Bucks by 30

1 hoped that J could

myself the secrets without buy

aires before tbey became millionaires. They aimed high

iog the seminar, book, aod audiorapes that were being 1 knew there had to be a catch with

dido't stop till they reacbed theirgoal. 1 knew 1 had that in me. Being a millionaire started on

priced $19.95. hooligans had to be actors Hee HaUJ to boost my self-confidence. N everthe less, it was workiog, and 1 was mesmerized.

inside for these people, and ooce they were coovinced

Ooce 1 mined every nugget of possible information from the infomercial, 1 decided 1 would myself test. 1 bought book after book after book about people who are rich and successful. 1 read biographies of about lifestylcs of millionaires, and books wrirren by (like rhis one!). Whar 1 learned from al! my re search was that rhere is no one way to be a millionaíre. Mil lionaires come from all walks of life, and rhey all made a lar of mooey io a lot of different ways. Bur on the orher they aH seemed ro have a few thiogs in common. 1 figured that if 1 also shared these traits. 1 too would a millionaire. ro

on the inside that tbey were worthy, convincíng the outside to them. Ir world dido't seem that daunting of a Age-y, but it seemed to sounded cheesy, maybe a bit necessary to have the coofidence ro succeed. 1 decíded ro take it ooe step further. 1 thought 00 a bigger scale thao rhe millionaires 1 read about. 'fhey j ust wanted ro be suc cessful eventually. 1 wanted ro be successful, specifically a millionaire, before 1 turned tbirty. 1 had to force myself to have the same high self-belíef as them. Right tben there 1 decided 1 wouldn't stop uotíl 1 reached my goal, un less 1 got tremendous feedback from my peers that 1 wa.<; making a mistake.

rhe tools

common denominator that all the millionaires was self-coofidence, high self-esteem, aod high personal motivatíon. (A high salary was usually par for the course.)

Extreme Cheapskate Strategy Carry a coín purse on your key ringo Ves, ¡t's very grand fatherly, but it's also extremely helpful. You can pay for all

believed in themselves. And 1 mean belietied, like New believed. They hOO the self-confidence, on the bordee

your purchases to the exact dollar amount, thus putting

of delusional, thar it rook ro be a millionaire. They thought they deserved better thao the hand they were dealt. They believed tbat no matter bow maoy times they failed, they

to put any loose change you pick up off the street. And hav

eveotually succeed. And oot marginally succeed, be overly successful. They believed they would be millíon-

the "212 rule." I've learned this rule by trial and error. Any

more actual dollars in your pocket. It also gives you a place

a bulky coin purse as a key chain makes losing your keys that much harder. One word of warning: Please adhere to

A Million Bucks by 30

Inspiration through Infomercials

rhe common denominator of all the other millionaires: in thing that is over $2.12 and paid for aH in change will usu al/y make the transactíon la5t twice as long and píss off the cashier. If this doesn't bother you, feel free to break the rule. Unle5s I'm behind you in line.

Thinking big isn't enough-think humongous. It helped me find my goal of being a millionaire by thirty. 1 was rwenry-two and so excited that 1 had something to shoor for, wirh a definite deadline. I was so jazzed that 1 had found my calling, 1 srarted telling everyone who would ten. My friends, family, and acquaintances all got to hear

ro prove these unsupportive and negative people around me wrong. Sorne friends they were. I chose to be a millionaire by rhirty to prove ro myself thar 1 could do it, but now I wanred to prove ir to rhem too. Ir hurt, but 1 knew rhat in eight years rd be thirty, and laughing not only last but rhe loudest (and the most pompously). 1 was already a million

about my newfound mission, regardless if they wanted to or noto From everyone, 1 got these three reactions: At the be

aire on the inside, complete with the top hat, monocle, oversized cigar. AH that was left was being a millionaire on

ginning, it was usually complete disinterest. Eventually it would túrn into an attempt to change my goal ro something more "realistic." And lastly, rhe third phase was snickering. 1 couldn't believe they were snickering! 1 was trying ro a

the outside.

millionaire by thirty, not trying ro make New Coke Missis sippi's state beverage! Now, their being disinteresred in my goal was okay. 1 conld handle thar. As much as 1 wanted them to, my choices didn't occupy the mind of everyone around me. 1 just caUed my friends uninformed ignoramuses when they attempted to change my millionaire goal ro something more realístic like, say, trying to save $100,000 by thirty. 1 had the secrets of the rich; my research taughr me rhe ins and outs of everything to do with millionaires. And 1 had

credible self-belief. 1 was just missing out on rhe huge in come. But, of course, the majority of the reactions ro my life's calling was just plain 01' snickering. My friends had laughed in my face! 1 had final1y figured out what 1 wanted to do with my life, and rhis was ajoke ro them. I was per sonally offended. 1 just became more determined rhan ever

AlAN COREY 101 Confidence 1S the key to success. To be a successful salesman, you need to truly believe in your producto Think ing like a millíonaire means believing in yourself. You truly have to believe in that product, and go out and seU it to the world. If you feellike you are worth $100, you probably make $100. But if you feellike a million bucks, you are one step closer to carning a miUion bucks. 1 find the healthier and more fit 1 am, the more confidence I have, not just about my appearance, but in all aspects of my life. AI

Inspiration through Infomercials

A Mimon Bucks by 30

though 1 hate running and working om, when 1'm Jone, 1 fee! great the rest of the day. Thar great feeling turns iota confidence, and ir Jefinirely carríes over to aH the other challenges in my Efe. Feeling great always makes things seem less Jaunting and more manageable. AJJitionaHy, for some reason 1 keep an inner mono logue in my heaJ that just repears irself over and over again. If l' m waiting for a bus, an elevaror, or j usr killing time, 1 jusr srarr saying ir ro myself until wharever I'm wairing for artives. 1 don't know where it comes from, and 1 don'r know why 1 do ir, but ir definitely affecrs my ap proach to rhings. For abom my first three months in New York, it was, of aH things, a refrain of "1 fucking hate shit." 1 don't know what it means, but I'm sure it was inspireJ my Jay jobo 1 would sing ir over and over to myself, say it withdiffereot accents (most of them Spanish accents, thanks ro my neighborhooJ), and it was always jusr stuck in my head like an earworm. 1 found my demeanor a little more aggressive, and 1 woulJ be more stressed when 1 kept saying rhis crazy phrase, but 1 couldn't shake it our of my daily routine. After 1 figured out my goal, 1 subconsciously changed "1 fucking hate shit" to a more positive and less vulgar phrase: ''!'m going to be a millionaire." And then 1 would srart saying this to myself every day in my free time (walk ing to work, waiting in Ene, and so forrh). After a while, 1 found myself more confident, less stressed, and more hope fui. Evenrually, 1 started believing it myself. AnJ it became such a romine thought in my head that it just seemed so

Jay, 1 still catch To natural to follow through with myself repeating phrases tomyself when I'm waiting in Unes. J've taught myself to instandy change my inner monologue if it is anythíng les s than positive. It makes me a happier, more determined, anJ more confident persono YOll should do this too, no matter how much you fuckíng hate your day job's shit. (Just make sute you Jon't acciden rally do it aloud, or you can forget sleeping with the hot gid in marketing.)

NlOI\ITHS

TOtal

net:wDrt": $10•.000

Adult Education

minder that day jobs suck and the pain of being laughed at by my friends for being ambitions, 1 had only one choice: 1 had to teach myself everything there was to know abont money. 1 bonght and read everything on the subject. I read abont stocks, real estate, bonds, mutual funds, 401(k)s, Chapter 3

Adult Education WHAT the hel! ÍJ a 401(k)? The world's 10ngeJt race? Apair of

credit cards, retirement, and on and on and on. Some stuff 1 never did figure our no matter how many times 1 read it, other things seemed to sink in right away. 1 soaked in as much as I could, and 1 felt even more confident ro start down my millionaire path. 1 decided that if 1 didn't

lo jil! out al! these 10m1J, So thiJ iJ what

understand an investment, 1 wouldn't put my money into it. 1 knew ignorant investors made for broke investors. 1

human resources does, HU1rtan resources people are apparently ¡he

also knew 1 had a lot more to learo, as 1 was currently both

kings 01 paperwork, bttt they sound like lhey should

of those things. Now, 1 did koow one thing about finances. 1 knew my

Levi's? 1 don't

Wa1zt

Jpies

aliens. "Yes, our human resources have inlormed us 01 ¡he Ameri cans' plan lo land on Marx. They are ninely light-years away, We musl prepare." Oh man, more paperwork?!? 1 don't know if 1 want direct tkposit; 1 don't lhink lhere are any ramificatiom for lhal, l'm nol sure. Can'l they just jil! thú 0111101' me? How marly depentknts do 1 have? Do my roommates (ount? How abo!tt my jish? My bobbleheads?

AH of a sudden 1 was getting biweekly paychecks, 1 didn't know what to do with them. 1 never had this kind mooey before in my life. 1 didn't even know my optíons besides depositing them into a checkíng account, 1 wanted ro get to rhe big leagues and be rich, but 1 didn't even know rules to the game, With my forty-hour weekly re-

credit card was bad. Receiving a letter in themail every month with "You Owe This Much" written in boldface type made it pretty obvious. So 1 decided to pay that off in stantly and cancel my card, 1 was used to feigning interest in most things financial, but paying interest was a whole different story. It made no sense ro be paying fees Just so some com pany could lend me money. IfI had to borrow money to buy something, 1 jusr dídn't need to buy it. No marrer how my neighbors would rhink 1 was if I had a reggaeton ring tone, 1 could wait to purchase it with cash rather than credit. And if 1 could never come up with rhe cash, 1 could

A Million Bucks by 30

Adult Education

just record myself repeating the same word one hundred

want ro stay at this job untíl retirement; forty years of

times and make my own annoying reggaeton ring tone. Ei ther way, credit cards were out of the picrure.

answering phones would put me in an insane asylum, prob ably where l'd have to answer more phones. Also, my com pany offered no match to any contribution 1 made to it. After questioning the HR alien, 1 learned that 401(k)s allow me to transfer my money to my next job and that it was still a gaod financial mave, match or no match. So it still made sense to sign up for it. As long as the money is always mine, 1 might as well pur it in a pro's hands to in vest. \Vhenever 1 left 1-800-BORING, the money could go with me. 1 slowly but surely found my footing. 1 wasn't

Next 1 got a savings account that went along with my checking account. 1 made sure not to get one that had a minimum-balance requirement. 1 never understood those: You charged for being pOOL That was definitely adding insult to injury, but it seems to be the standard. Usually, a savings account has a better interest rate than a checking account. Mine was the same. So 1 started putting as much in my savings as 1 could. The extra fifteen cents earned in interest were meager, bur ir was a start. 1 was earning my first interest ever, and it felt unnatural. 1 was being paid ba sically fór depositing a paycheck in my savings account. The first time 1 saw that, 1 thought it was kinda cool. 1 thought, okay, JO this whole perJonal finana: thing rrúght bepretty intereJt ing afier al!. (It doesn't take much to me excited.) 1 expanded my research to cover Roth IRAs and index mutual funds. Just being able ro use those two terms in a sentence cor rectly made me feel rich. 1 Jiked that feeling. 1 couldn't wait to talk to someone at a cocktail party and say something cool abour the differences between a Roth IRA and a tradi donal IRA. Ir would replace my party trick of hiding the party host's dog in the fridge. And lastly, 1 figuted out what the hell a 401(k) was. And that 1 needed to learn. My company, like most, had this oddly named retirement plan and wanted to know if 1 was going ro 1 was hesitant, though, because 1 didn't

exactly krumping through the financial world, but 1 was learning ro do the tobot.

AlAN COREY 101 It pays ro do your homework on aH investments. Go ro the library, check out books, or research online. You have ro work hard ro earn money, so be educated enough to make sound decisions on how to manage it. The best is to exhibit some se1f-control and not make purchases on credit. Wait you have the money, rather than borrowing it to make most of your purchases. Ir's obviously more advantageous ro earn money with interesr than it is ro pay money as in terest. Cet yourself in this positive cash flow siruation as often as possible. lf you don't understand your company's retirement plans, mect with the human resources departmcnt. If you

Adult Education

A Million Bucks by 30

still don't know what

it's their

to explain your options ro you. Ask a lot of quesrions, and ¡nvest only in something once you [uUy understand it. 401(k)s are always advantageous. Many companies will match your biweekly contribution, and rhat's free money. And unlike the sirua rion 1 had with my mother, rhey are not allowed ro cut it off unexpectedly. Take rhis perk and ir. Put in as much money as you can. rhis is basically earning a bonus just [or showing up to work each day. (Telling myself this ar least made getting out of bed each a little more bearable.) Not only does rhis put you in a lower tax bracket.

rhe ability to 401(k) in glossary.)

lower tax bracket means fewer taxes; therefore you have more money to invest. Index mutual funds and Roth are sound investments and should always be considered as a first place ro invest any extra cash, especially i[ you have money sittíng in a checking or account earning you less chan 5 percent interest (and it probably is). You can learo more at Web sites such as Morningstar (www.morningstar.com). Mutual Pund Alliance (www.mfea.com). and the Motley Fool (www.fool.com). Be sure to do your own homework, talk to multiple sources before making any major financial

nUULdl1Ull

decisions. Be sure to ask about aU fees involvcd and be 100 sure that you understand everything about you are investing your money. No one will care about your financial Dicture more than you, so be the squeaky wheel and answers to your questions.

Plastic Surgin'

me points at a gas station. 1 loved it, and it worked for me. Occasíonally, 1 earned enough to a free tank of gas. However, once 1 moved to NYC and became carless, my points became worthless. 1 canceled it and signed up for a new one, one where the allure of a free T-shirt tempted me so much that 1 acrually fillcd out the forms with my correct Chapter4

Plastic Surgin'

information. using ir 1 could Ir was a music-based credit card, and carn points toward music-related junk like a CD tower, a framed poster of a band,

FREE T-shirt! I am going crazy for a free T-Jhirt! I don't even want thiJ T-Jhirt. It'l! probably shrink 012ce 1 wash Íf, and it a lame MaJterCard logo on it, bu! I'm ... Jtil! .. . /il!ing . .. oztl . .. thís . .. foml. Why anz 1 JO compel!ed to J(et IhiJ Jhírt?? 1 Okay. what do 1 halJe lo do? just JÍgn up for credit card, and it~r mine. 1 don't want a credi! cClrd, 1 want a free Jhir!. Okely, I'I! make uf' rny info. Okay, Iha! like el legit ad dreJJ. Good, good, l' I! JUJI Irick him. Make that and make up. Wow, this ís so easy. And. , . 1 . , , am ... Okay, here'J yottr dipboard back. Yes, I'm Jure everylhing iJ correcto What's my Jodal Jecurity rzumber? It:r on the application, Oh, you want me to verify? 1 like to say it out loud,' you know, ideri cmd al!. No, 1 Jweetr it'J rny real nurnber. Okay, 1 don'! my addreJJ either. Come on. JUSI give me ¡he T-Jhirl. you too, Your 1~Jhírt suck.r, and ir wouldn't hm1e fit anyway. No, yon have a good day, sir! 1 got my first credit card right afrer college. It earned

L .

01'

T could even earn the original

shirt they gave me free upon my application-in case 1 wanted another one. The credit card had a reaIJy high inter est rate, but 1 didn't care because 1 was disciplincd enough to pay off my balance each month, so it wouldn't afft;ct me. When 1 finaJly received the card, 1 couldn't wait to go out and use ir. Extreme Cheapskate Strategy Recommend your dentist, doctor, or other health specialist to everyone if you truly do recommend them. I turned my whole office on to my dentist and got her so many recom mendations that she credited me $500 and a gíft box of toothbrushes. dental floss, and toothpaste. I think if I'd asked herfor free laughing gas, she'd have given me that too, but I needed my brain cells for now.

A Million Bucks by 30

Plastic Surgin'

first time 1 did use ir was when my dad carne to visit me and stayed in a five-star hotel right near Wall

that one-time 10 pereent eliscount. Secondly, 1 learneel that no maner what credit you have, you can usually Iower

Street. 1 got there first, so 1 started checking him in. needed a credít card on file for incidentals, so 1 pre sented my flashy new credit card ro the lady at the counter

your interest rate just by asking. lasr thing a credit earel company wants ro do is lose a customer-even one who pays off the balance each month, because there's still a

as if 1 were passíng her the Hope diamond. 1 was proud excited ro start earning sorne points. The formerly sweet

chance that person could get in trouble and miss a few pay ments. So being the Scrooge McDuck that 1 am, 1 found

best ro contain her laughter. It was as if it

that just requestíng a lower interest rate usually got ir me. AH you need ro do is call the hotline number on the back of your carel, and the person on the other end USlL:1.l1y

lady tried

were the funniest thing she had ever seen. 1 suppose she was ro corporate gold cards and had never encountered a juvenile credít card like mine, one emblazoned with the ev ídence thar it helped earn points for crappy band gear. it got me thinking that however rude chis exchange might have been, J did have a freaking silly credit careL 1 was twentysomething, and 1 was collecting poínts tor music knickknacks. And considering 1 didn't really want the stuff, it had to the most pointless credit card for me ever. I de earning necessities with my credít cided that 1 should

lower it for you. If not, just say that you found a witha lower interest rate (which is usually not hard to do, and credít card companíes know this). The threat of your Ieaving is so great, they will at least drop your interest rate half a percentage point. 1 do this every síx months (arounel New Year's Day and then again on the Fourth of]uIy), years 1 have gotten my credít card's inter over the past est tate down to around 6 percent. 1 just want to make sure

get a credit card that carne sans T-shirt.

that ifI do get in a situarÍon where 1 owe money on a ance, it doesn't hurt me too mucho Luckily, to this day, I've never carried a balance, nor have 1 ever wanted another

I fOllnd out a couple of things looking for a credit cardo It's not good for your credit score ro continuaily change cards and roil over balances.

credit card T-shirt. 1 decided that the only necessity that 1 couId earn from was money. The one I finally chose was easy to a credit

Longevi ty is the key ro building good and it is best to have only one or two cards and them for as

understand and easy ro use, and its reward system was sim

card, or, if that were not possíble, at least earning my legit imate wants. 1 figured 1 should do sorne research and maybe

as possible (preferably one for life). those Banana Re publie and credít cards wiU come back ro haunt your credít score, so don't sign up for them, and forget

ple: For every $2,500 1 put on .my credit card, 1 would be sent a $50 savings bond. The only catch to the credít card was that 1 had to paya yearly $ 50 to qualífy for the re wards programo 1 d id the math and figured l' d still

com

A Million

Bu~ks

Plastic Surgin'

by 30

ing out on balance, the

And just in case 1 ever did to carry a offered a interest rate. 1 got my card, pur it in my wallet, prompdy forgot it. 1 1 would use ir only in or when 1 found with absolutely no cash. AboLlt ayear later, 1 went ro the mailbox, in the mail was an officiallookíng envelope. 1 thought 1 was

1 continue ro do this card-rhis card ís my lifer~and 1 still call the horline on the back

my card every six months ro try ro lowet my in

tetesr rate. The best part, though, is that the five-star my dad stays at don't laugh at me anymore. Hopefully, one credit card makeover is

only plast!c surgery 1 will

ever need.

summoned ot being called fo1' jury dury. Bur inside was a

$50 savings bond from my credit card btand-new, company. 1 was thrilled! My own savings bond! 1 like Axel Foley's delinquent fríend in movie Beverly

CO/J. It was so cool that 1 couldn'r wait for ir to bappen again. And the only way that would happen was if 1 ro my cred1t careL Ah-ha, where they get ya! 1 carne up with a plan that 1 don'r was that but it took sorne nerve, and it put the power of ctedít in hands: 1 put every single bill 1 was gettÍ11g on my credit ca1'd, every necessity purchase on rny credit as well as just about any other expense 1 hado 1 carrying no cash in order to earn more savings bonds. only way 1 would get hurt with this plan was ifT didrú pay my balance each month, so the pressure was on even more to maintain account ro cover my huge credit card bill that carne every thirty days. And it worked. 1 ended up earning níne in a litde over ayear. 1 supplemented myincome ayear with this plan. Plus, 1 l.1aid no interest was charged 1 was points for myself rather for some meaningless music accessory.

ALAN COREY 101 it If there is a gimmíck involved (Iike free means you aren t getting the best carel Web such as Bankrate.com and Credit Card Goodies reward cards out there. It you to the can usually that fits your lifestvle. 1 find a pays to do 1'esea1'cll feel strongly thar earning currency such as as it can be re lila bonds or cash back is deemed e~1.<;ily iE not instandy. Ir's optimal to find a carel that you want ro carry for the rest of your Jife. Once you find the one that you want, cancel the rest. not use the carcls anymore, Ir's not enough ro close tbern. Checking your you have ro actually at annually credit report, which you should www.annualcreditreport.com). will cards are currently in your name and tion on how to close those accounts.

you how many you informa

A Million Bucks by 30

Annualcreditreport.com There is also a way to log on and check your report for free every four months. There are three credit agencies: Trans Union, Experian, and Equifax. AII allow access to your report once ayear from this Web site Just check one agency's re port, then four months later check another one, and four months later again tor the last one. However, ¡f you find an inaccuracy in any of the reports, it's probably best to check the rest instantly to make sure you get it fixed across the board.

Lastly, don't carry a balance. lf you currently have a bal ance, prioritize and pay it off and stop adding to it. A credit card balance can be an expensive lcsson in debt, and you can help yourself by calling and lowering your interest rate in case you ever get in a tight situation. Rather than having a credit card that you pay money to each month, make the credit card pay you money. Getting your credit in check is also crucial. This will help you monitor against identity theft (yo u can see if an item has been falsdy charged to you, if another card has been opened in your name, and so forth), keep your credit balances in line (did you forget about that old hospital bíll, or the damn Gap card?!), and learn yOllr entire financial his tory (that cell phone bill you never paid in high schoo1

'--o

Plastic Surgin'

1I1ight be on there). AH of these steps are equally important. 'l'i1e Annualcreditreport.com site contains i05tructions on how to report inaccuracies, cancel old lines of credít, and pay off old debts that are eating up your credit score. Your credit score determines how good a borrower you ¡¡re, and it can affect you in many ways. It ís a report card lenders (lenders being people that will lend you money someday). Scoring over 700 will usually get you the best mtes possible. A high credit score can get you a better car loan, mortgage cate, and credit card rate, which could save you hundreds-even thousands--of dollars a month if you llave, say, a 709 score as opposed to a 648 score. You may not think it's a big dealnow to make late payments on your (redít card or any other bill, bur it will come back to bite you in the ass when you're doíng something you can't imagine yourself doing now-like buying a house-and those late payments from your bone-headed yourh come back ro haunt you. Also landlords and sorne jobs may access your credit report when doing a background check on you too. Remember, ir's a score of your credít history; it's a life time score. And it can always be improved upon, so if it's low now, don't sweat it. Pay off the ourstanding debts, can cel the cards you don't need, and fix any inaccuracies. And pick one lifetime credit cardo Ir will save you rons of money down the road. le's best not to be surprised if any questions arise from a future lender you come across.

A Million Bucks by 30

AGE TWENTY-THREE

Checking account: $2.300 Savings account: $9,400 401(k): $2,900 Roth IRA: $3,000 Total net worth: $17,600

Chapter 5

Excel-ing in Romance WAIT a mimtte, did she just make fun

hook wtu:Ctum She

.laid that these are the same book.l her dad reads. Díd .lhe mean that in a good zuay or bad zuay? 1 mean, her dad should have read thm financial selfhelp books a long time ago, 'cause if he'J start to read these nozu, hes in trouble. She d.elivered it zuith Juch a inflection, though. Does zuant me to her dad jinan seems perplexed by them. Does cial advice? No, zuait, Tonya 1 totally Jhould tell her 1 think 1'rn a dad or any kidr. Wait, that's assurúng Ihat Jomething'! going to between us tonight. Whoa, jfshe mjJects her dad's taste in books, 1 must he JO in. 1'm like her d4d away frorn horne. !J that hortte.' l' m so out. No, zuait, 1'm her dad azuay did Jhe have fo .lay that? What's wrong with my books? Dates are so aUJkUJard! 1 did have a financial-self-help-book fetish. 1 wantcd to lcaro what 1 had ro do to become a míllionaire, and 1 de voured everything 1 conle! on the snbject. Ane! each book,

A Million Bucks by 30

however bodng it might have been to read, resonated on the same investing principal: The earlier you started a race, the sooner you'd finish. If 1 had started investing just one day earlier, 1 would be richer. Why didn't they teach me this on page one of every book? I don't know, but ro be fair, 1 didn't mentíon it on page one to you guys, either. Hope fully for you it didn't take a full day ro read this faro Compound interest is the Tiger Woods of investing. The younger you start, the dcher you'H be. 1 would have more money today ifI hadstarted just one day earlier. And if I' d started one month earlier, I would have been even fur ther ahead, thanks to having an extra thírty days ofinterest compounded. It pained me that I didn't invest at least some in college ayear earlier; 1 could have been so much further down my path to riches. As a result, I developed something of a love/hate rclationship with compound interest. On the

Excel-ing in Romance

Extreme Cheapskate Strategy Put everything on eBay before you throw it away. If some one bids, charge the normal price for shipping plus an extra dollar tor "handling." Look to see .if items similar to ones you regard as trash are already posted. If so, that means there is a buyer's market tor it, and you might be able to seU it. It doesn't hurt to try to put up as much stuff as possible. A guy on the street once gave me about one hundred $1-off coupons tor soy milk. I sold them on eBay (five sets of twenty coupons for $5 each) and earned $30 ($5 for han dling) tor five minutes ot work. eBay is also a good place to get new high-end dothes and merchandise at a fraction of the price. Ted Baker, Betsey Johnson, Marc Jacobs, Banana Republic, J. Crew-they're all there.

one hand, 1 was so happy ro discover this power of making money, but on the other hand, 1 wish I had known about it so much earlier. Realiúng that tortured me the same way ir rortured me ro realize the hot girl in high school used ro want me. Too latenow. My income at the computer gig was $40,000 ayear. It was a lot for most places, but in New York City ir didn't go very far ar aH. Thar meant I didn'r have.much money ro in vest. 1 figured rhar ifI couldn't control my income, 1 would still control my outflow-and outcome. 1 chose to reduce my expenses, scale back my lifestyle, and invest rhe differ ence in investments that earned compound interese mutual

funds, certificates of deposir (CDs), and even my savings ac count. cut down on my entertain 1 decided rhat 1 would ment expenses, as that was where most ot my money was going. I immediarcly wenr out ro the store and bought a PlayStation for $300. This may seem backward to many, but my logic was sound. A night out in NYC cost me a mínimum of $30 for dinner, cabs, muggings, or other mis cellaneous expenses, but mosr often it ca me out to around $50. IfI had an alternative form of entertainment instead of

A Million Bucks by 30

Excel-ing in Romance

spending money Out on the town, 1 could choose my PlayStation and save money in the long termo 1 was so de

gratis. U nless you plan to be an eccentrk millionaire by thirty, don't go to a wax museum. Those are never free, and

termined to make this plan work, 1 kept a tally of how much money 1 was saving by being a homebody just once a week. In four months, the PlayStation saved me $640 1 would have spent otherwise. Minus my initial 1l1vest

they, like your apparent taste, are a bit ereepy. Concerts: When the weather heats up, free concert se

ment in the console, 1 had $340 extra to put in an interest bearing account. It worked out perfectly. This 1S wheo my

ries, often sponsored by the city or parks departments in most major cities, do too. There's tons of free-and, yes, good-music to be taken in. Ditro for outdoor movies.

obsessive-compul5ive disorder for saving money really be gan to sink in.

Plus, it makes you look like you've got your finger on the pulse of all the happenings in your city. You can learo about

Now,I never did find a girl who wanted to spend a cozy night kicking my ass at PlayStation, but that doesn't mea o my spartan lifestyle kept me from dating. 1 found that

all of these in your local free news rags.

there were plenty of options for things to do that didn't cost a 10t. 1 didn't date any women who required expensive gifts $400 dioners, beeause that obviously wasn't happen ing, but 1 wasn't interested in that kind of ehick anyway, mílliooaire or oot. 1 had a hard enough time asking anyone out, much less someone who wanted a sugar daddy. Plus, 1 figured that if 1 really liked someone, and she really liked me, it didn't really matter what we did, beeause just hang out would (hopefully) be a blast.

the opening nights of new artists.

sorne kind of aetivity 15 always niee, and here are sorne of the ways 1 got around spending buckets of cash while still managing to have sorne kind of dating Me: Museums: Many museums are free, and if they're not,

they most likely have fj~ee days or houts. A quick trip to a museum's Web site willlet you know when it lets people in

Art galleries: They're selling to really rich peopIe, but

it's free to look. And there's usually free wine and eheese on

Exercise: Take it however you want-running, walk

ing, bike ríding, Rollerblading, swimming at the publie pool if lt's not too gross, and so oo. Take the initiative and show that you care about your health. You'll both finish the date feeling better about yourselves if nothing eIse. Happy hour: Cheap drinks, and if you piek the right

place, free food. Seore, seore, and, hopefully, seore. Parks and beaches: You've already paid for them with

your tax dollars, so go ahead and use them. (I'm betting that one of you probably already owns a Frisbee.) Throw in a picnic while you're there. !t's romantic, more or less stress free, but ehances are high you might have to take your shirt Plan aceordingly.

Excel-ing in Romance

A MiIlion Bucks by 30

Games: Laugh if you want; many peopIe wiU teH you

nothíng gets them going more than a steamy game of Scrab ble. Double, triple, quadruple date optíon: Buy a few beers, invite people over, and have a Cranium blowout. Impress the ladies with your plate of handmade hors d'oeuvres. That's r1ghr: chips and salsa.

them: Don't underestimate the powet of matinees, as as milking a subscriptíon to a setvice like Nedlix, or watch ing every free movie on demand through yout cable service. My personal favorite is the turn-one-movie-ticket-into thtee-movies ttick. l can't tell yon how it's done, but maybe you can guess. (1 just strongly tecommend choosing one of these optíons, and sdckíng ro ir.)

Cooking: While not free, ir's a great way ro have an

awesome meal at a fracdon of the price you' d pay in a restaurant. Case in poinr: Say you went out to eat and or dered two filer mignons, two salads, and a botde of wine. The minimum you'd spend after tip would probably be about $1 OO-and that's assuming you get the cheapest bot of wine and tip 15 percent. Do it yourself, and yon'd spend about $30. Filet mignon ($20) + wine ($8) + let tuce ($2). And believe me, cooking filet mignon is not a big deal .. Tve done it myself. (Well, I've watched someone les s capable than me do it in my kitchen.) ObviollSly, you can Cut this down even more by cooking pasta, but if you're try ing to impress, you may want to go a bit more high end. A cheaper but still classy alternative for the non-steak-eater: lasagna. Tilapia is way cheap and real1y tasty. So is Volunteering: lt's free, shows yon give a damn about

your fellow man, and leaves you feeling like a decent human being. Maybe you should do this solo sometí mes too.

Mooch off your friends: Everyone ís always doing

something. Go see a friend's band, check out her improv show, or invite your date to come see your show. Usually fun, laid back, and could possibly earn you sorne date points if at the venue you find yourself on your friend's guest listo Readings: lf it seems like somebody's always hawking a

book, it's because they are. (Yours truly comíng soon to a bookstore near you.) Barnes & Noble, Bordets, and your local independent bookstore all hosr authors doing free readings all the time. In a lot of cases, you can sign up ro get e-maíl notices of who's coming where, when. Literacy is sexy. Rallies: Maybe you believe in the same causes-go rep resent together. Nothing says lasting memories like get ting arrested together protesting poJiticians, taxes, and local library hours. Triple dating points if your protest works. Flea markets/thrift stores/garage sales: While 1 gener

Cheaper movies: As 1'11 discuss later in this chapter,

there are a lot of ways to skin this cinematic cat. Among

ally díscourage shopping as recreation, just rooting around in cool old stuff ís fun, and if you happen ro f1nd a vintage

Excel-ing in Romance

A Mimon Bucks by 30

Lynyrd Skynyrd shirt for 25 eents, you have my blessing. (Although l' d probably seU ir on eBay for a hefty profit.) Street fairs: Free, often live musie, perfeer people

watehing atmosphere. Instant good time. Weddings: While nor reeommended for a first date, it

certainly is a cheap one. Free food and open bar! Maybe kick in for a better wedding gift if you bring a guest, just to re ward the newlywcds for getting your main sgueeze loaded on Someone else's dime for once. TV tapings:

lf you live where a major television show is

taped, there's a good chance you can get tickcts for free. Es pedally game shows and dating shows. Check out the Web site to reguest them. Or befriend Chuck Woolery; I'm sure he could use rhe company. Open houses: l' el be lying to you

didn't indude this one. Of course, it's one of my favorites, but nor everyone finds this as scintillating as 1 do. Make a day visiting high end homes for sale, just ro see how the other half lives (or how you wílllive one day). A final note on the dating front: lt's important to re member that the person you're dating might also appreci ate not having to break the to hang out wi th yOll. Living anywhere when you' re in your twenties and making an entry- or midlevel salary is not easy (especially when you're trying to save money). And if you're a person

that, as they say, is priceless. In other words: How mueh would you not pay to find someone you actually really liked and could spend more than five minutes with? Enough With aH this, 1

convinced a girl in New York to

my girlfriend. Tonya loved movies. 1 thought movies were way too ex pensive to watch in the theater, and 1 had to make a stand. We could be patient and see every movie on TV for free in a few months or rent it from the video store a few weeks later, or bypass watching Bridget Jones's Diary altogerher. Tonya took this as a personal affront, but she had an un healthy compulsion for movies anyway. And 1 tried to cure her of this. Tonya knew everything and anything about every film ever made, and had an impressive collection of DVDs to boato Every word out of her mouth was a movie guote, a movie reference, or a movie factoid. This drove me crazy, but she was cute enough for me to overlook this one char really drove me crazy was seeing how acter flaw. But money she could have saved whiJc maintaining her insane movie adeliction. She wasn't that cute for me ro over look this major character flaw. AH it would take would be a !itde effort on her parto

A Million Bucks by 30

Excel-ing in Romance

she took the $50 a month she was spending on cable Extreme Cheapskate Strategy In movie theaters that have unlimited popcorn refills, save your popcorn bago My girlfriend and I used the same pop corn bag for about three months. Maybe a bit unethical, but desperate times called for desperate measures. And nothing is more desperate than eating a $7 bag of popcorn at a chick

and invested it in the stock market, the tesults would be staggering. Through the power of Tiger Woods--er, com pound interest-this ís how Tonya's financial picture would have changed (not tO mention her relationship with me): By altering her movie obsession just a smidgen and invest ing $50 a month her lastfour years in college, rather than

Tonya paid probably $50 a month for her premium cable access (HBO, Showtime, and so on). 1 know she also Netflix, so that's $20 a month for someone to send

paying for premium cable like she did, Tonya would have sa~ed $2,817.49. And that's with a stock returning an av erage of only 8 percent. That's not bad, especially since she was still getting her movie fix in other mediums. But if she did this for a total of twenty years, she would have gained $29,451.02. For this bnd of payday, 1 think Tonya couId watch Revenge 01 the Nerdr Jl: Nerds in ParadiJe at a friend's

OVOs in the mail. Furehermore, she'd buy at least one or two OVOs 15 each) a month. And then another

house. But to take it one step further, let's trim Tonya's spend

a month was spent .going to movies, especially for r an opening-night blockbuster, which was when she'd call me to be her escore. Anyway, that's $120 a month, 01' $30 a week, on movies alone! And she had just landed her post-collegíate job, with a salary of $30,000.

ing even more. lf she did take my suggestion to watch movies only fram Netflix, that would save her $100 a month. Investing that money in the same stocks as before would produce the following results, giving her over $100,000 in twenty-six years. (One note: This 8 percent re tum is over the long hául and not timing the market like

flick.

Now, Tonya could really condense all her movie watch ing to one fotm,lt like 1 did, whether it be only watching flicks on Netflix or only going to the movies during the matinee. But 1 knew that asking her ro choose a single way to sate her movie jones would be the death kneU of our re lationship. So T proposed she eliminate just one source: the premium cable.

sorne yahoos want to do.)

A Million Bucks by 30

Excel-ing in Romance

YEAR: BALANCE 1: $1,244.99

15: $34,603.82

2: $2,593.31

16: $38,720.91

3: $4,053.55

17: $43,179.72

4: $5,634.99

18: $48,008.61

5: $7,347.68

19: $53,238.29

6: $9,202.53

20: $58,902.04

7: $11,211.33

21: $65,035.87

8: $13,386.85

22: $71,678.81

9: $15,742.95

23: $78,873.11

10: $18,294.60

24: $86,664.53

11: $21,058.03

25: $95,102.63

12:$24,050.83

26: $104,241.1 O

13: $27,292.03 14: $30,802.25

Tonya dumpcd me shortly after 1 presented her with this Excel spreadsheet. Granted, perhaps my tactic was a litde much, but 1 was curious myself to see what she could have been earning with all of rhe money she was squander ing. In the end, our approaches to managing our money were too extreme, and rhe relationship was stressed because ir. 1 was in a completely different mind-set from her, a million 1 was determined to finish what 1 started. To aire bv thirty, 1 couldn't be sidetracked because a cute girl was now making me go to the opening night of Bridget Jones: The Edge o/ Reason (no matter how aptly named

movie might have been).

AlAN COREY 101 The earlier you start investing, the easier invcsting will be for yOU. A mathematical formula known as the rule of 72 demonstrates The idea of saving $100,000 is ovcrwhelming and sounds impossible. Bur the fact is that it's the exact same thing as trimming your spending by just $25 a week. It's not that hard to find that $25. Maybe you cut down on takeout, maybe you invite friends over for beers instead of hcading out to a bar, and maybe you use your cell phone when the minutes are unlimited, or you get a cheaper plan. And, it's cliché, but maybe you don't buy a $4 coffee every morning. If Tonya did that, after just ten years she'd have over $18,000, which could very well be a down pay ment on a house-Iacking a down payment is one of the major reasons people can't afford to buy real estate. In my Excel spreadsheet scenario, Tonya's got it. But movies on opening night were more important to her. She smoker's syndrome in this sense-she cared only about short-term gratification rather than the long-term effects of her actions while young. Before every purchase, ask yourself: Can 1 do without this? Can this purchase wait tm tomorrow? Can I frnd a crea tive work-around instead? Can 1 frnd it cheaper elsewhere? If you answer yes to any one of these questions, don't make the purchase. If you follow this internal monologue every time you pull out your wallet, your wallet will reward you. Scale back your lifestyle as much as you can while

A Million Bucks by 30

you're young, invest the money you would have spent other wise, and compound interest will be your best financial friend-as welI as a helpful tour guide down your path to being a millionaire.

AGE TWENTY.. THREE AND TWO

MONTHS

Chapter 6

Checking aeeopnt: $2,500

Hail to the Cheap

ScII"'a8S &ce"at: $11,500

40t(k)= $1,700

Rotll IRA: $1,000

'rotal net worth: $20.700

OH, 1 want to huyan ¡Pod! Look at this, it'J

tiny! And

$200.1 don't have $200! 1 mean, 1 have it; my ATM receípt says 1 have

500, and I've neve:r had that much money h~fore in my

checking account. 1 can't heliet/e 1 have $2,500 in my checking cU' COJ/1tt! I'm so rich. 1 co/dd totally af/ord thiJ iPod and still have Oh man, JhoJ/Jd 1 get thi..? Rold up,

if 1 irtvested thiJ

$200, 1 could turn it into $215 by next year. And thereUJill prohctbty he an even hetter iPod next year. 1 shoutd hotd off But 1 wi// be a smal/er and better year. Atan, can't wait (}: iPod mxt year. You know thiJ. You can wait. Right, 1 wort't huy it. 1 gueJs I'll jUJt wait 01' ask jor it jor Ch,'istrnas.

Thanks to my breakup with Tonya, my entertainment expenses plummetcd, and 1 decided 1 wantcd to make cuts in other areas too, The hardest thing about this further belt-tightening was thar it meant 1 had to get a grip on my impulse purchases. 1 needed tO commit to buying only ne cessities (food, shelter, water) rather than wants (iPods,

Hail to the Cheap

A Mimon Bucks by 30

my current savings account to it. I intentionally chose one that was inconvenient for me to get too Afterward I went into work and went back to human resources. I needed

Extreme Cheapskate Strategy Many mobile phone companies give you thirty free credits each month for dropped calis. You have to cal! a '-800 num ber and deal with an automated assistant to get credited for one minute. Call up to thirty times a month to get a total of thirty extra minutes of free phone time. It's worth ít if you are continually going over by ten to fifteen minutes each month and don't want to upgrade to a more expensive plan. It's also a good stress reliever: Instead of counting to ten when you're upset, just make ten phone calls to the robot operator. You'lI stop stressing over your problems. as you can now take ít out on the automated person on the other end of the line.

beer, more beer). When I categorized every purchase as ther being a "necessity" or a "want," I realized I could cut down my expenses tenfold if I bought only what 1 truly needed. '1'he hardest part was Iooking at my AfM receipt and seeing that I could afford something, then trying to talk myself out of buying it. I figured that if I wouldn't give an alcoholic access to my Iiquor cabinet, 1 shouldn't give someone trying to save access to money. I had to make it so that I couIdn't get to my cash. So the next day 1 opened up a second bank account at a different bank across town and transferred all my money in

sorne automatic assistance to impIement my new "out of sight, out of mind" strategy to inves6ng. 1 told HR to di rect deposit 40 percent of my paycheck each month into my new inconvenient bank account. I purposely didn't memo rize the number of the new account, and 1 instantly threw away che A'1'M/debit card that carne with it. In short, 1 took away my access to almost half of my income. '1'his extreme measure meant only one thing: 1 was now officially bat-shit insane. 1 didn't even want

know how much money 1 had

in there, ever. On top of that, 1 asked HR to sign me up for my office's 401(k). The legal maximum 1 could contríbute was 15 per cent of my paycheck. 1-800-SNOOZE didn't have any company match (a common practice at many companies, but I put the fuU amount in anyway. At this point, I was forcing myself to live off 55 percent of my income. These were drastíc moves, especially in an expensive city like New York, but 1 was determined, and fuUy immersed in my fi nancial OCD, so 1 didn't stop there. After meeting with HR, I realized that 1 would have to invest on my own as well. My job was only going to get me so faro So I went online and opened up a brokerage acCOUllt.

I had to start investing in mutual funds, so I opted for a run-of-the-mill index funde 1 set up an automatic transfer of $100 every two weeks from my original bank account to

A Millien Bucks by 30

my mutual fundo That put me in another $200 bind each month (another 6 percent of my salary). After all the con straints 1 put on my paycheck, I'd whittled my $40,000 yearly salary down ro $15,600 ayear, or 39 percent of my salary. And this was before taxes were taken Out. 1 was forc íng myself into poverty, relatively speaking, for Manhattan. Most people thought 1 was off my rocker, but as 1 saw it, 1 had no choice. 1 didn't have the skills or the experience nec essary ro get a high-paying job, so ifI wanted ro save, 1 had to Uve on as little as possible.

Tip: Ves, some big~money corporations deplete the environment of valuable re sources or make their money using unethi cal business practices, but if you don't agree with them, there are several broker ages that employ socially responsible in vesting. Feel free to invest in these.

Hail te the Cheap

absolutely needed. No matter what, all purchases were in tensely scrutinized. Once 1 started buying necessities on a budget, 1 was forced to comparison shop. 1 learned that buying food in bulk was advantageous, but only as long as 1 could eat everything 1 bought in bulk before it spoiled. Plus, com parison shopping all my food purchases helped me pinpoint the product-placement nuances of my grocery store. Anything at eye level or placed near the checkout counter was priced at a premium. 1 figured that the manufacturers of these produces paid extra to have their items in this zone of shoppers' impulse buys. So 1 began buying things requir ing the bending ofknees or the assistance of an employee ro get something off the rop shelf. It was a little extra work, but 1 needed to save every single penny, and the cheaper stuff was always a bit harder ro reach. 1 was on a treasure hunr. Granted, it was a trC'dsure hunt for generic-brand peanut butter and knockoff Cheerios, but a treasure hunt nonetheless. Ir was obviously in the grocery store's best in terest tú pur the most expensive stuff within easy reach,

One positive effect of all this insanity was that it put a complete stop tú all my impulse putchases. Whenever 1 bought something, ir was a very carefully considered decÍ sion. M y inner monologue would just repeat, Da 1 need this, or do 1 want this? Anything 1 wanted, 1 refused tú purchase. 1 was on such a tight budget, if 1 did buy somethíng 1 sim ply wanted, 1 wouldn't have been able ro afford anything 1

1 wasn't falling for it. After about two weeks, 1 was used ro my new budget. It almost felt like 1 was back in college again -1 was eating cheap food and drinking a whole lot of water. This time, though, 1 was drinking water to be thrifty, not ro cure a hangover. In addition, I benefited from living in an area sutrounded by cheap take-out restaurants. (1 ordered take out often--never delivery-ro avoid paying a tip.) 1 can't

Hail to the Cheap

A Million Bucks by 30

cheapest

The ultimate meal for saving money, however, is no se cret to many: ramen noodles. 1 discovered that jfI bought a

Trying tú find the cheapest food sources was my way of becoming a modern-day hunter-gatherer. One day, I found a way to get heavily discounted baked goods. 1 located a bakery that boasted a Baked Fresh Daily sign in the wio dow. 1 knew if they bakcd goods daily, there had to be some

six-pack of ramen noodles for 99 cents, I would have a 16.5-cent lunch every day. If I bought a twenty-four-pack, it carne down tú 13 cents a day. Food was a necessity, but getting ir didn't mean 1 had tú splurge. I admit, it wasn't the healthiest maneuver, but late ramen noodles for lunch for three straight months. lo this day, 1 can't even sme11 the

say enough about ordering vegetarian takeout, route every.time.

baked goods that were a day old and, hopefully, sold at a discount. 1 walked in at closing time, and, sure enough, they wcre about to toss a bunch of bagels and croissaots into the trash. I asked for them, and they gave them to me free. The next day I came back, and they gave them to me for free again. The next day I came back, and they

charged me halfprice.WTF? I paid it, and from there on out it became half price for me. I was sti11 going back, though, as a half-priced bagel with a dollop of peanut but ter from my industrial-sized jar back home made for a hearty dinner on many nights. Now, that's cheap! Extreme Cheapskate Strategy

noodle soup without getting nauseous, but for those three months it was the best smell I'd ever experienced. Why? It was the smell of dollar signs accumulating io my bank ac count, and it helped kecp my food budget tú around $2 a day every Jingle day, What was wrong with me? After a while I got used to it, so much so that I stayed on this measly food budgct for two and a half years. I don't think I'd ever been that skinny in my life, but I was also never richer in my tife, dther. With my extremely limited access to money, 1 was forced to get creative and prevent myself from buying unnecessary wants. And it made me compari son shop for my necessitíes. Both played major roles in helping me save enough tú begin my millionaire journey.

Never buy bottled water. It's unnecessary. Go to any fast food joint and get a free cup of water that's twice the size of a bottle of water. Bonus: it's iced. The bottled-water busi

ALAN COREY 101

ness should be successful only in third-world countries. Peo pie, we Uve in Arnerica; take advantage of it. And if you need sorne flavor; load up your cup with free lernons and ar tificial sweetener for sorne bargain ice-cold lernonade.

If your money 1S inaccessible, you can't spend it. I went to great lengths to have my money hidden from me and to have lt automatically invested. I was benefiting twice by (a) forcing myself to live on a budget and (b) taking advantage

Hail. to the Cheap

A Million Bucksby 30

The trick is that it's not preparedlike normal oatmeal.

of dollar cost averaging through my online brokerage account. And the best part was, I didn'r have to do anythíng ex

just buy a big 01' container of oatmeal and treat it like dry and serve cereal. Pur ir in a bowl, add raisins and

eept spend thirty minutes in the human resources office and thirty minutes online. After ir was all keepíng

cold. You now have a wonderful cereal-like concoetion tastes betrer than store-bought Raisin Bran, and it's also

my impulses in check.

more filling. Plus, it's mueh, much eheaper. You can buy a large container of dry oatmeal and a large container of

Resisting the temptation to buy things you simply want is incredibly hard, but if the alternad ve is not buying the

raisins for under $4 combined, and this can easily last two or more weeks. late it for dinner many times when I was sick of having industrial peanut butter and half-priced

things you truly need, you stop caring so mueh about splutg ing or buyíng yourself that occasional presento Treat your self when you are a millionaire rather than when you are starring Out. Trust me, the presents are much better. If you take a look at how you spend your money, you'll probably find that most of ir goes to food, entertainment, and transportatíon. Entertainment is the to scale just be discíplined and ehoosy on how much caíd en tertainment you yourself each month. For transporta tion, the best ways ro go are subways, buses, walking, arreI carpooling. These alternatives to a car or a will save you money, and they're also good for the environment. One last super-low-budget food option is Alan's Stiek to-Your-Ribs Breakfasr Blend. Ir's actually a redpe created by one of my best friends, Katie, ro help me adhere to my $2-a-day food budget. INGREDIENTS: oatmeal

Raisins

Milk

bagels.

!'f 'i\ \~

;¡

I ,1

••'''gs

($11,500, wh¡ch. 't_kf"'~'-" ac(~nt·.and put "....,ac(alIntto

.nt...

prev_ac~sstoit. =.~,OOO

....

::a

:. ......•

Chapter 7

Getting Real (Estate) WOW, it's atmost been one year oj insane saving. l'm about to turn twenty-four, and the past year actuatty flew by and wasn't so hard after att. [t's New Year:r. [ shoutd make this my annuat check on finances and see how l've been doing. Nt have to head across town today and see what [ have in my checking account. Maybe I'tt have erlough to buy reat estate. [n atl those books, it said to buy reat estate, but I'm not exactly sure what that entaíts. [ shoutd buy an apartment. Okay, [ witl check my batanceJ first and then figure out what to do. [ hope [ can buy reat estate-that woutd definitety sound a tot cooter than 401(k)s when Jchmoozing at cocktail parties. [ want to tatk about an apartment [ own. Okay, that woutd be braggíng. But ít Jtitt woutd be jun! a bunch oj reat Yeah, bragging is jun. Okay, maybe ['ti jUJt estate and write a book about it. ['tt wait to brag then. Way cooter. Bragging in a book woutd be the beJt. I'd catl it A Million

Bucks by lt felt great ro check rny balances in all my accounts

A Million Bucks by 30

Getting Real (Estatel

aftet one yeat. At the age of twenty-thtee, 1 had a pretty de

H'refore have monthly payments that were a little bit

cent portfolio. 1 was definitely ahead of my friends who weren't saving, and 1 was way ahead of where 1 had been fi nancially just one year earlier. I couldn't believe 1 was

lore manageable. If 1 could find a place in New York City for $100,000,

to save money while living in one of the most expensive cities in the world. It took sorne work, but now 1 could see it W<L'l actually paying off. 1 had $11 ,500-plus in rny hidden bank aCCount. It felt good to have that. My portfolio was very heavy in stocks too, which is fine when just starting out when you're young. Even though stocks are risky in that you could lose some money, a long term investment tirncline enables you to weather the ups and inevitable downs-ofthe market. 1 figured I couId take some of my most liquicl money and either buy more stocks Ot maybe even buy a place to live. Real estate seemed at tractive to me, and that $11,500-plus sitting in my hidden savings account was earning me very litde, but at least 1 didn't have access to spending it. 1 needed to branch out, but what could I buy with arOllnd $12,000 in the bank? 1 mean, besides a wonderful week in Vegas. find out, 1 started looking at apartments. I remem beted the no-money-down deaIs from the infomercials, Qut they seemed a Httle sketchy. Even 1 knew that if 1 put no money down, l'd end up with a gigantíc mortgage and have a huge monthly payment because (a) l' d owe more money and (b) putting no money down meant that l'd be charged a higher interest rateo So 1 figured 1'd rather make a small clown payment, get a' better interest tate, and

I would be able to put down 10 percent ($10,000), and ín

'.!t·ad of paying rent, 1'd be paying off my own place each llonth. That sounded way better than forking over my llolley to a landlord every month and never seeing it again. 1I all made sense, but, of course, there was one catch: I had lo

find a place for $100,000 in New York City. I scoured the Web, the newspaper, and listíngs at realty

,ompanies. Everything wíthin my price range was in New '('('sey or the farthest comrnute possíble from the far reaches oC Brooklyn. 1 didn't care what neighborhood it was in; I Jllst wanted to be within a thirty-minute commute of my lay jobo The truth was, the day job was growing on me; the were cool, the hours were flexible, and I liked the steady paycheck. Sure, it was boring, but it didn't require lI1e to wear a tie, and that went a long way with me. 1 fig lIred that 1 would stay there one more year and then really ¡ind rny way. The evil geniuslrock star rnight just still be in me yet. (1' d also read that having a steady job could help you get a mortgage, so I was staying put.) 1 saw a one-bedroom apartment that I teally liked in the Murray Hill neighborhood of Manhattan for twice my budget. However, I couldn't make things tighter finall cially than they already.were. I saw a dny, decrepit shamble of a place in Durnbo, Brooklyn, that was way overpriced, and the Realtor reinforced several times that the ownet

A Million Bucks by 30

Getting Real CEstate)

wasn't going to budge on price, so 1 moved oo. And 1 weot to many open houses in places that were way out of my league locatioowise (and, therefore, pricewise), but 1 just wanted to get comfortable with the open-house process pick up on what types of questions other people were askiog.

r felt

a fish out of water, and 1 Iooked at these as my vocationaI schooI, just by eavesdropping on savvy buyers' comments aod concerns. 1 finaHy found a one bedroom apartment Iisted for $110,000 and went to the opeo house. 1 was the only one who showed up. The apart ment was in Clinton Hill, a transitional neighborhood of Brooklyn-more about that in a bit-but' this was also an area filled with beautiful historic brownstones aod tree lined blocks. r figured that transítional neighborhoods were a good place to start investing, as the property values in these areas tend to increase faster than those in already established neighborhoods. 1 would be buying io a "bad" neighborhood, so to speak, but 1 took an educated rísk that in a few years 1 would own a property in a good one, where people would want to move.

Éxtreme Cheapskate Strategy

and they'lI bring you a box of twenty. (Every lost and found has a mínimum of twenty black umbrellas.) Now, don't feel guilty. When you are done with it, leave the umbrella at an other restaurant or grocery store. It's a bit like recycling, and ¡t's good karma too. We could dry up the umbrella business if we worked together on this.

The reputation of this particular neighborhood the last twenty years was one of crime and drugs. However, it seemed Iike the pendulum was swinging back toward im provement for the neighborhood as a whole. 1 could teH by the new stores popping up in the neighborhood, new reno vatioos happening to other houses on the block, and new people moving in. It was close to publk transportaríon. A nearby park was just starting to get cleaned up by local vol unteers. Neighboring areas were getting too expensive for moneymaking business folk, so 1 figured they would have to settle for this area if they wanted ro buy. 1 believed that the neighborhood's bad period had definitely peaked, and it was getting primed for a renaissance. And besides, it had to be safer than the projects, right? But as cheap as the apartment was, the price was too high for me. r was especialIy excited about the place be

walk into any restaurant or grocery store and ask to see its

cause the next cheapest apartment 1 saw was Usted for $135,000, and 1 knew there was no way 1 could afford that. 1 wanted that one, 1 would have to wait another whole

lost and found. Explaín that you lost your black umbrella.

yeat to save more money, and by then the asking price

You never have to

an umbrella. When it's raíning, just

would most likely be even higher.

A Million Bucks by 30

Getting Real (Estate)

The place

$110,000 was small, and the bathroom ceilings were high and needed a complete makeover, but the building was nice too. If 1 was going to buy, it would have to do, because that was all I could aiford. In the end, 1 realized that the only way 1 could afford the place was to put in a lowball offer and try to it for under

síve, and the costs were more than 1 anticipated. Every state

The fact was that 1 hacl nothing ro lose: Either they would take my offer and l'd buy it, or l'd hunker down and wait another year. So 1 called up the real-estate agent who had shown me the apartment the week before. 1 told her

come with a dosiug. important ro know that when you buy real estate,

is different, but in New York 1 had to pay an attorney, taxes You are required ro receive a to the state, and other good faith estimate when you apply for a mortgage, and should you buy property, it's important to 100k at this care fuUy, because it will outline aH the miscellaneous fees that

that 1 wanted to put in an offer of $90,000 and would put down lO percent. My strategy was simple: 1 was hoping that she'd split the difference, and we would come to an

you clon't just need money for a down payment and your monthly mortgage, but you also need a chunk of change ro pay all of the fees that will allow you ro pay that mortgage in the first place. There are ttansfer taxes, recording fees, ancl more. Get estimates on a11 these up fronr ttansfer

agreement of $100,000.1 knew they were still scheduling open houses trying to get bids from other people, but when they Carne back three days later with a counteroffer of

from your lender. When 1 walked out of the closing with my new keys in my hand, 1 felt broke, because as far as oid cash, 1 kind of was. However, my pordülio had a brand

$105,000, 1 could teH that no one else was bidding on the place. Eut the príce was stilI too high for my meager sav ings, so Tcame back with another offer of $95,000 in an at tempt to get her to split the difference once went back and forth a few times untíl her 10west offer was $101,000 and my highest was $99,000. After 1 refused once again to go ínto six digits ro buy the place, she finaUy counteroffered with $99,600. 1 accepted it. 1 couIdn'r

lieve it~I was buying an apartment in New York City!

(Well, Brooklyn, which 1S technically part of New York

City. 1 did something good is what l'm getting at!)

The whole process of buying a home was pretty expen-

.~.

new look to ir. My checking account reflected $700, but on closer inspection 1 couId see that real estate was already

making me richer. 1 would just have to replenish my check ing account and my newly exhausted hidden savings ac count once again. (Check out my net-worth tally at rhe end

~¡ .(

of the chapter if you can't see the fu11 picturc.) 1 definitely Carne out on top with this real-estate put chase. The $11,3001 spent at the closing earned me $19,400 in equity. Equity is the difference between what a person owes on a property and what it's worth. For instance, the apartment was worth $110,000. The owner agreed to seU it to me for the lower amount of $99,600. 1 put down a

Getting Real (Estate)

A Million Bucks by 30

$9,000 down payment at the closing and got a $90,600 mongage from the bank. That meant 1 owed $90,600 on a

How to Sniff Out a Good Deal

place wonh $110,000, which gave me $19,400 in equity. So here's the math: $90,600 mortgage + $19,400 equity ($9,000 down paymem + $10,400 lower price) $110,000. Equity is the least liquid of capital, but 1 wasn't plan

If you're serious about buying your first place, here are some key strategies to finding a great deal: • Identify transitional neighborhoods where other people

ning on needing that $19,400 any time soon. 1 just hoped 1 didn't have any trouble covering my new mortgage pay

are investing. Look for retail and housing development,

mems. 1 got a thirty-year mortgage, which required me to pay $700 a momh, and my apartmem carne with a $100-a montb maintenance fee for the superintendent, insurance, and a doorman. 1'0 be honest, 1 wasn't sute ifI was going to be able to handle the huge leap from paying a rem of $100

hubs, whích willhelp draw people to an area.

as well as existing services such as grocery stores or transit

cated and more work, but It can also save you thousands

in fees and may help you get a better price, especially if

¡;:

the seller doesn't know the market and has undervalued their property.

a month in the projects to shelling out $1,100 a month at my new place. 1'0 make things extra tight, 1 sti11 planned to on living off 39 percent ofmy salary. But 1 was dcter mined to makc it work somehow. In the back of my mind, the issue of potentially putting myself in a prccarious finan situatíon wasn't going to happen. 1 could always stop living off such a small percentage of my salary to make ends meet if necessary. Luckily, 1 got a raise at wotk to $42,000, which carne with a $5,000 bOl1us. Things would work out, at least fot the shott tetm.

• Consider buying directly from the owner. It'5 more compli

• Be open to an apartment wlth potential. If It seems líke "

you could make improvements and greatly increase the rt

, '1

'i,

value of a place, you may have found a diamond in the rough. You don't have to make changes right away, but you can if you decide to sell. • Know the market. It's crucial to understand the value of similarly priced properties; this will help you know íf the asking price is way too much or, ideally, too low. • If you're in love with a place" and cannot afford 1t, one way to save money is to submit a lowball offer. Or negoti ate that the seller pays closíngfeesor will instal1 an appli ance or two. (Obviously, this V)iOrks only if the seller is desperate to un load, or youire Ina buyer's market. If

A Million Bucks by 30

Getting Real (Estate)

mento Buy a place that you want to live in for a while and you've done your research, you should have a pretty good sen se 9f the current c1imate.) • Consider borrowing money from your parents or friends. If it's an option, it's a good one. Parents are

notso

keen on finandng your trip around the world for the hell of lt, but they know that property is an investment and may be open to helping you take this big step. Friends, es pedally those with money, know this too. • Consider putting down 10 percent. This is not an ideal situation, as lt means that you'lI pay more over the long term for your mortgage-and it often carries additional fees, Jike mortgage insurance. But having 20 percent of the purchase price in hand is not always essential, nor is it always financially possible. Get the best you can get for what you have, and the investment if done correctly, will always work out for you.

be patient waiting for the neighborhood to change around you. If you don't have a ton of money to buy a place in the best part of town, turn your attention to neighborhoods on che cusp of change for the berter. Look for signs that people care about the area, like local community programs work ing hard to clean up where they live. Consider rhe practical aspects of what makes a place livable. ls there a super market nearby? lf applicable, is mass minsit accessible? Is there a park or good schools in the area? Do you see de velopment, even in its most early stages, cropping up? AH of these things will draw other people ro the neighborhood, because they make an atea a desirable place to live. as more people move in, more conveniences will move in too, and before you know ir, you're no longet in a cusp area, but maybe even in one of the hottest parts in town. Regardless, your property value-and equity-has gone up. It's al so important ro remember the power of low balling in real estate or in any other negotiating situaríon.

ALAN COREY 101 The power of equity in money that is the least

estate is tremendous. lt's therefore ir's the hardest to spend on something frivolous. And, historically, real-estate values tend to go up over time, turning your equiry into even more equity. To get the fastest return on real estate, it's usually best to lnvest in property in a changing neigh borhood. But remember, real estate is a long-term invest-

Just because someone has an asking price doesn't mean that he won't take less. Never walk away from a deal you think you can't afford. It doesn't cost anything to put in an offer, so throw ir out rhere. In real estate, you'll usually be using a real-estate agent as a go-between, so you won't have to deal with an itate seller. Besides, he'll eithet take yout offer and accept it, counteroffer, or just ignore it. Just remembet you never know the siruation on the seller's end: He may be moving, already have bought another house, or

A Mimon Bucks by 30

need sorne quick capital and be willing to go down tn pnce to get it. One thing ís true: You'll never know if you never try.

AGE TWI;NTY.THREE AND ELEVEN MONTHS Checldng áccount: $700 Savings acc:ouDt: $0 Second, flidde.. savings accóuDt: $4,200 (speftt

Chapter 8

Splitting Lairs

. $11,:100 ef.it on the dosing and thendeposited lIIost of ·my _RUS dIIoney back ¡ato ti)

40'1(k): $4,500 Mldua. fu....: $2,400 Reth IRA: $:1,000

Equity: $19,400 'tetalnet.werth: $34,,zoO

I can't believe 1 actuat!y own something 01 value. My PlayStation was the most expensive thing 1 had ever bought, and nOW one year later ["ve pttrchased a piece ofproperty! So this is the American Dream, huh? Owning property. 1t feels pretty cool, btJt damn, this is one expensive dream; it's costing me a shitload each month. And this is one het! 01 a lonely dream; 1 see why most people wait tit! theyhave a lamily to blty a house. 1 hate living by myself! l'm bor ing myselfto teays here. 1 have no one to yell at. Who's going to en tertain me? '¡'his place is too quiet! 1 was driving myself nuts in my new place. 1 had never lived by rnyselfbefore, and 1 learned quickly that 1 hated it. Ir was lonely coming horne to an empty house every day, and ~ was bored. It wasn't a dream come true at aH, and it started to drive me crazy thar 1 was paying $1,100 a month for a place 1 wasn't truly enjoying. 1 needed to make a change in my living sítuadon, and fast. 1 looked the place over and realized that my living room was just a waste ofspace. Whenever 1 was home, 1 was

Splitting lairs

A Million Bucks by 30

in my bedroom eating dinner on my bed while watching TV. 1 hadn't the living room at aU during the first two months 1 owned the apartment. The space was just a stor

especially in New York, and if I could buy more property, I keep renting to more people! Ir was brilliant! But so

age area for a couch 1 found on the street, atable 1pulled the curb, and a lamp that was left behind by the previous owner. 1 realized the unused space would make for a

first real-estate venture, but 1 had normal haie

second bedroom, which 1 could rent out to earn sorne extra money. AH it would take was a heavy curtain and sorne ceil

simple! I felt like Donald Trump must have felt after

Extreme Cheapskate Strategy Libraries are not just tor term papers. You can check out for

ing hooks, and I'd have a space that surely J'orneone would be game to Uve in. 1 made my "renovations," and after sending

free many of the latest bestsellers in books, DVDs, and CDs.

our a few e-mails, a friend was ready to move in a week latero Sure, now the apartment didn'r have a living room, but that wasn't so un usual in many tiny New York apart

It'5 also good to know where al! the

ments, and 1 obviously wasn't going to miss having one. Not only that, but 1 was going to charge my friend $400 in rent, and you really can't argue with that kind of

employees.)

Your tax dollars are payíng for ít, so take advantage of it. libraries are

in case you ever have an urgent need to use a bathroom out in public. (Librarians are much friendlíer than Starbucks

Hell, 1 dodged bullers for ir ar my first place. Bur with this new arrangement, I killed two birds with one srone. I

But 1 was thinking too far ahead again-after aH, 1 such an advenrure. 1 would didn't really have any cash to

reduced my living expenses by offsetring my mainrenance with my rental income, and 1 had someone around to talk to whenever I was bored. The American Dream, or ar

to save up for another down payment, or borrow sorne

least rny American Dream, was alive and well after aH. Having someone pay me money jusr because I owned sorne walls and a ceiling opened up something of a Pan dora's box. lloved it, and I couldn't wait to purchase an place and do ir again. And I figured rhar if 1 boughr a place that was bigger, with more rooms, it could earn me even more money. People would always need a place to live,

more money, and once again see what I couId afford. But this plan seemed like a viable way to reach my goal ofbeing a millionaire, and I figured that if 1 could add just one property every year, it couId very well be my winning ticket. In the short term, 1 had to be happy with my very small-scale real-estate "holdings": my two-bedroom with no living room and a fabric cuttain for a walL But I knew where I was headed and what 1 had to do: keep saving as as I couId and start preparing to make my next deal.

Splitting Lairs

A Mimon Bucks by 30

ALAN COREY 101

Find what you have that is of value to others and make some money from it, whether it's a shed, a parking space, or

Be adaptable and open to revising your plan, and see opportunity in those revisíons. I'd finally accomplished one of my major goals, and when 1 got there, 1 realized it wasn't a11 it was cracked up to be. 1 was paying way more

an unfinished basement. Ir may seem basic, but you should always be looking for opportunitíes to lower your expenses and inerease your income as much as possible. More money less money out; it's one of the most effeetive ways to be

than 1 wanted to (or couId afford, given my self-imposed budget restríctions), and the fact was, 1 was bored and lonely and needed to make sorne changes.

come a millionaire by thirty.

"GEs TWENTY·FOUR

1 came up with a way to improve both situations by adding an extra bedroom, and my willingness to adjust my plan left me mueh happier.

Checkiríg acco..n~:$3.400

AIso, you should aetively seek out opportunities to generate extra ineome and be willing to downgrade your lifestyle. Pan of the seeret of being a power saver is living below your means and making sacrifices. Often, it's possi ble to generate more income by making saerifices.

401(k): $4,600

I could have lived in my extra spaee in my apartment, but there was no need. I actually enjoyed having someone else around, and it knocked $400 off my monthly expenses. I'd had a garage, I would've rented that out to a neighbor with too many cars. If I'd had a basement, I would have remed it out to kids needing a band space. IfI'd had a baek yard, I would have remed it out too (not sure who would rent a yard, but, then again, I'm sure someone would). This is eaBed passive income. You earn money fol' not doing any work. Find things you own or have aecess to, and make some money from them-they may be things you won't even mISS.

Savings accoum: $0 Second, hidden savings acc...nt:$? Mutual fuad: $2,600 Roth IRA: $J,OOO

Equity: $19,400 Total net worth: $33,000

Getting Test y

Chapter 9

Getting Testy OKAY, le!'s see what we have here. Att right, a check Oh, oh, what's inside good,

one? $61 Jackpotl I've been

not this good. Next enve/ope, what do we have? phone bitt lor $35. Whammy. Come on, A/an, big buckr.

No wha¡mrúeJ. Next letter iJ ... a checklor $101 Oh yeah! Okay, one more enve/ope to go ... and it looks /ike a bítt, and l don't want to open

but it's the rules. . un/m . .. it's ... lor ... my

roommate-and it ÍJ! Att right, A/an wa/ks away with a sigh 01 reliejand negative

7.50 after today:r excitíng game 01 Mai/box

Roulette. Come back tomorrow to see il Alan wil/ final/y have it takes to win or watch hirn die trying. Thank you to our -,ponsors 5print, random /ab test, arld survey. This emotional rol/er coaster was provided by the U.S. Postal

Being supercompetitive, 1 like turning everything into a game. 1 invented a game of "How Cheap Can 1 Go?" to challenge myself to be as thrifty as possible. Each day 1 tried to outdo myself from the previous day's spending totaL 1 would get completely bummed out if 1 lost, so 1 did

everything in my power nor ro lose. lrs counterparr was "How Much Can 1 Make?" where 1 would see how much money 1 could make away from my day jobo Narurally, combining the two games became Mailbox Roulette. (I never said 1 wasn't geeky.) Although 1 had a new toommate and was making more money, 1 knew it wasn't going ro be enough to reach my goal of being a millionaire by rhirty. 1 had ro give it my all in making as much as 1 could and saving as much as 1 could. 1 could ask for a raise at work only every year or so, so 1 had to come up with sorne extra ways ro supplement my come. 1 became addicted tú finding other sources of what 1 saw as easy money to pay off annoying but necessary ex penses like my phone bill, electric bíll, or subway card. Luckily,I found that offering myself up as a guinea pig was a great way to bring in sorne extra cash. It was so amazingly rewarding for me ro pay off an entire phone bill from seven different check s that my desire ro make more money on the sideincreased even more. My sister, a psychology grad, turned me on ro earning small payouts for participating in research studies. Bul letins looking for volunteers ro participate in research groups and focus groups were often posted in her c1ass rooms. 'fhese studies needed to film people doíng puzzles, taking tests, or figuring out a dddle with a group. They usually took twenty minutes and paid $10. Not bad, and you could do as many as you wanted. You just had ro be willing to be a human guinea pig, and 1 saw no harm in that. These tests were offered every month or so, and my

A Million Bucks by 30

sisrer would notify me when rhere was a new one posted on campus-she actual1y participated in many of them herself. Her big payday from this was tor a test on brain activ iry and husbands. She $200 for getting a CAT scan holding her husband's hand, and then again when she wasn'r holding his hand. It took hours; that isn't too bad just ro uncomfortable, stationary, and holding a loved one's hand. Her husband got loot too, so ir was a win win him. (Actually, especially for him, as he didn't have ro ger a CAT scan and wasn't allowed to talk ro her.) Afrer hearing abour his lucky payday, I had to find opportunities ro do these things more often, rhan wait around for more postings in my sister's classroom.

Getting Testy

and giving my feedback. (Wirh rhat last one, I carne out on top: deodorant, no stinky pits, and ca'lh! Okay, esdy, my coworkers and room mates might have come out on top, but someone was benefiting.) leven turned down sorne gigs,.as in the end, sometimes time is money. I was financiallv determined, but a three-hour survey on washing machines tor was not enough to secure my guinea-pig services. One of my best friends, Paddy, was my chief rival in this game, and he was the king of securing odd jobs to sup plement his income. He was a grad student, and he turned down nothing. He would always top my war stories with his own, and ours became another love/hate relationship. 1

I ended up finding Web sites of companies that did similar work; they would pay me to take tests, fi11 out sur veys, and rry products for cash.

was definitely cheaper than him, but his strength lay in procuring side He did so many focus groups and sur at a place conducting them. veys, he ended up getti ng a

Websites that can help you make a few extra

Not even counting the tact rhat every one he found some how carne with a free lunch, he even usually beat me based on the "no-effort factor" alone. His crowning glory carne

bucks: www.greenfieldonlíne.com, www.pineconeresearch .com, www.online-sweepstakes.com, www.your2cents.com, www.testspin.com, www.surveyspot.com.

he landed a testing gig. A reputable firm would him really expensive slippers each week, and he'd have to wear them an hour a day and give his feedback. He'd send in h1S report, keep the sEppers, and then wait for his paycheck to arrive. A few weeks later, he would wrap up

I made sorne extra dollars doing quick and easy things like ralking to a stranger on the phone for ten minutes as

the slippers and them out as Christmas presents to family, earning/saving him a several-hundred-dollar

part of a dialect study, being filmed taking a test on pop culture, and trying different types of deodorant tor a week

bounty for a few short walks around his apartment.

A Million Bucks by 30

Tip: Never buy a brand-new caro A car loses 20 percent of its value the first day of ownership. let some flashy trendsetter take that 20 percent loss and then buy his car from him ayear later when he no longer enjoys it or has moved on to an other vehicle. Materialistic trendsetters are usually horrendous bargain shoppers. but they are fun to party with.

The closest 1 came ro topping this was when 1 landed a gig based on my looks, and not in a cool "Big Al Models" type of way. Time Warner was having a DVD release party for Scooby-Doo and promotíng the upcoming Scooby-Doo 2: Monsters Unleashed. The company needed a Shaggy look alike, and aside from actually looking like a B-grade Shaggy, tbe trutb 1S that 1 have a history of Jooking souodiog like, and constaotly beíng místakeo for a big stoner. So it was kind of a match made io heaven: a role 1 was always destioed to play (the role of a Shaggy Jook-alike, that is). A friend forwarded me the casting notice, 1 ap plied, and after submitting a couple of photos of myself and talking ro the casting agent on the pbone, 1 got the parto For the party, 1 spent three hours dressed as Shaggy and walking a live Great Dane around a paeked outdoor event ro the live music of the Baha Men (the fine ereators of

Getting Testy

"Who Ler the Dogs Out" and responsible for the main song in the movie, "Seooby D"). Ir was a pretty sweet deal, as 1 tan into some eelebriries, bad free food and drinks, and ba sically bad my picture taken with everyone tbere. Tf it weren't for the Baha Men, 1 may have taken Paddy's erowo. We both agreed that the pain and suffering inflicted music made the wbole evening a push. Paddy and 1 had tied for the best gig ever. But 1 apparently impressed the current VOlee of Scooby-Doo, a radio DJ in Louisiana. He gave me his eard and told me be could get me a gig trav around the worldas Shaggy. As he put it, "1 have never seen a Shaggy as good as you. You even walk like him!" Upon hearing this backhanded compliment, 1 laughed laughed and laughed-and then 1 cried. That 1S, until 1 got my $350 check io themail for the Shaggy gig, and 1 finally won my first game of Mailbox Roulette. 1 ended up declin ing the touring gig of Shaggy, because 1 was really looking to make a name for myself as Alan Corey. 1 believed 1 had mimicking an ugly fictional character who more inme was often assumed ro be a drug addict.

ALAN COREY 101 Being naturaUy competitive, 1 found that turning every thing into a game pushed me ro being more creative and also allowed me to have more fun with my finances (or laek thereoE). Ir helps tú have a friendly rival in these types of games, as the support from that rival can really carry

A Million Bucks by 30

through the rough times. To an extent, people usually control their income-that's what bosses control. Rather than just sit back and accept that fact, you should become a side-gig entrepreneur like me. 1 aspired to be as good as Paddy, and 1 carne pretty damn close. We all have our strengths and weaknesses, but a balance of saving as as possible and earning as much as possible is a wonderful combinaríon. Whether it be playing a human guinea pig,

Chapter 10

Tripped Out

bartending one night a week, or mowing your neighbor's for a free dinner, fmd ways to supplement your day jobo It will break up the monotony of your week and

DO 1 think your boyfriend'J

on you? MOJt likely, It'J your wild-card night; you are each JuppoJed to go out on a date and and then tomorrow ret,zJJeJJ. your relationship,

you an edge in your own version of Mailbox Roulette.

AGETWENTY·Foulí AND TWO

(.bollt him, we get free drinks and entertainment all night! take advantage of it. Oktq, well, 1 am going to get as drunk as pOJJible, 1 want to rnake thÍJ fun. you JUJt stop crying for five

MONTtlS

~ing account:$4•.100

Savillgs accoUiot: $O $econd. hidden sava..gsaccount: $1 401(k): $5.300

Mutual fund:$3.lI00 RoIl. IRA: $6,000

equity:$21,500 Total net worth: $40,200;1Y:\

¡ .~.

minutes? One of the side 1 found that paid a decent amount of money was TV shows. This is no secret, but being on can earn you big bucks. And any way that 1 could make Being twenty-four, 1 was money on the side, 1 was down trying to figure out my lite's true calling, so 1 started performing at some open-mike comedy shows in the (Hard to believe, but 1 found out that it too k talent to an evil genius or a rock star. Fortunately, open mikes in NYC took anyone.) One night 1 saw a flyer at one these open mike nights looking for comedians to audition for a dating show caBed Change of Heart. 1 have come to find out that

A Million Bucks by 30

Tripped Out

many reality show producers like to cast green wannabe co medians like me. This is probably because of our

rant for the sake of "good" tclevision. After aH, 1 saw mysclf in Rocco's shoes one day, and 1 wouldn't want someone in

ness to do anything, eagerness to be on TV, and potential

tentionally trying ro sabotage my efforts. Due ro one of my half-hearted attempts at mucking up the show, 1 was de moted from a featured waiter role to a food-running back

comedie talents. Or, more likely, our depleted bank ac counts. 1 auditioned

got casto The premise was that 1 would go on a date with a gid who was already in a relationship, and if the date went really well, there was a chance that she'd have a "change of heart" and pick me over her boy friend the next day. 1 went on the date, and the gid was pretty awful. AH talked about was her concern that her

ground prop. (Sorry peeps, but this is the way "reality" TV shows actually work.) 1 actually earned a second living wage as a food runner the show. (After a certain point, for six weeks before 1 I'd had it.) It wasn't a lot of cash, but it

WaJ

a second

boyfriend was going to cheat on her. (Umm,yeah, that's the point of the show.) But what 1 thought was cool regardless

for me, earning me sorne cash that 1 could apply to my millionaire-by-thirty dream. During this time, 1 was work ing nights and weekends at the restaurant, and heading to

of the company was anight of free drinks and entertain ment, plus a $350 appearance fee. lloved this side gig! (Oh, and, of course, to sweeten the pot, she did have a

my tech support job days a week. Getting paid to be on TV was much better than sitting at home and watching TV alternative. time was earning nothing, which at

change of heart and picked me over her loser boyfriend. And 1 never saw her again.)

Even if it was exhausting work, it put sorne extra cash in my wallet. Plus, 1 got sorne Diesel ¡eans and Adidas shoes earned respect work uniform)-and a for

Ayear after my Change 01 Heart appearance, 1 got of fered an audition for The Restaurant, a much-hyped show documenting the opening of celebrity chef Rocco DiSpirito's newest venture. 1 the part, and my "role" on the show was to provide sorne comed y and to mess up every once in a while, both of whieh 1 reluctandy tried to puH off. 1 didn't mind screwing up an order, but droppíng trays making out with s9,me chick in the meat was where 1 drew the line (out of respect for Rocco and my significant other, respectively). 1 respected Rocco as an entrepreneur, and 1 didn't think it was fair to screw up his dream restau-

for food runners and busboys. Now, 1 had learned these benefits of being on TV as a good source of income and other perks when 1 was in college. Back then, my room mate Jeff and 1 had a plan that we hoped would produce a free and memorable spring we had break adventure, rather than to Florida done every year prior. We decided that we would make up a story, on a daytime talk show, and let them By us out ro wherever they were filming. It was a far-fetched but we thought it would be amazing if we could pull it off.

A Millíon Bucks by 30

At least it would make a good story for the postvacatíon "What did you do on spring break?" query everyone asks. We recruited our best girl friends to be part of our cha rade and caHed TheJerry Springer Show and rold them that Jeff and 1, best friends and roqmmates, were datíng another pair ofbest friends and roommates. kicker: We were sleeping together--and we wanted ro the world on his show. (Yes, it was a complete lie, but we were desperate for a free trip and would do whatever it took. it might mean that we would go on the worst show in TV hisrory to save a few bucks, but we were okay with that.) And the producers loved it. They flew the four of us to Chicago for spring break, aH expenses paid: free airfare, free hotels, and limos. We 'even got $250 of "Jerry Bucks," litde pieces of paper with Jerry Springer's face on them, redeemable at any hotel gift shoo or restaurant, was the best spring(er) break ever! We filmed the show, had the requisite onstage fight, stifled our laughter, and then we were on our way back home a few days latero We did it: We got a free spring break teip minus the sunburn, and one that was way cheaper than a drive to Florida. (Only skiH it required: calling ] -800-96 JERRY.) Not only that, but we became a hit on campus, and in the end, everyone seemed ro agree that we made for pretty good TY. While not the dassiest choice, at leastJerry Springer was a step up from making our mark in the video Girls Gone Wild, which, ttuthfully, is an option we probably would have sought out if we had ended up in Daytona Beach/Panama City/Boozeville, Florida.

Tripped Out

Litde did 1 know, this creative litde spring break scheme became my step down a long and winding path of reality TV gigs--one that earned me some pocket money and a ton of free swag. Remarkably, during my second in New York, while 1 was filming The Restaurant, 1 got picked for another reality show due to my insane thriftiness. A friend recom mended me for a brand-new makeover show because she knew (1) 1 was a reality TV whore and (2) 1 needed a makeover. Backhanded compliments¡ but 1 instandy knew it would be fun and would probably mean lots more free stuff. Of course 1 was down! However, the producers of this new show needed me to pitch a premise of why 1 needed a makeover. If 1 could come up with something catchy, then they would book me for the show. 1 figured a penny-pinching mooch would be a perfect angle for a new makeover show. 1 was definitely that, and it showed within every aspect of my life, from home ro fash ion. 1 pitched an embellished story line that my new girl friend's parents were about ro meet my parents for the time at a cocktail party at my house. 1 didn't teH them that there was acrually no need for them to meet (they lived in different states), but 1 figured it would be a good premise the producers. Not to a makeover evento And so mention that my girlfriend at the time was in the "he needs a makeover" corner as well. This unproven new reality show ended up being Queer Eye for the Straight Glq, and, indeed, 1 did get completely hooked up on the show. First, 1 should say, the "Fab Five"

A Million Bucles by 30

Tripped Out

and 1 were instant friends, and it was so rnuch fun taping

the MCs at the pageant, and she allowed me to take full ad

with them for four days, even though the whole show was

vantage of our face time together.) 1 will admit that she

based on them criticizing me about my cheapskate ways. It

didn't call me back. Apparently Miss Universe has stan

was still nonstop fun, and the show did become a hit..

dards (after all, she is Miss of the Universe), but, neverthe

Not to lose i:rack, the reason 1 do reality shows is that they' re fun. And for the goody bag of stuff you get, and 1

less, 1 like to aim high. And that's a perk 1 wouldn't have gotten sitting at home watching TV on my couch.

got hooked up on this one. The way it worked was that

At this point, 1 knew that reality TV shows (not to men

companies would donate their products to Queer Eye to be

tion fans) were sick of me. Fans really started to notice a

featured on TV. Queer Eye would then turn around and give

problem when Bravo and NBC started airing The Restaurant

these goods to their Queer Eye victims. 1 was on season one,

and Queer Eye back-to-back several times a week: two hours

which had the lowest budget (and was before all the Queer

straight of Alan Corey on reality TV! 1 got hatemail from

Eye mania), buf when all was said and done, 1 carne out on topo 1 calculated 1 got about $15,000 worth of free clothes and furniture just for being ridiculed about my stinginess on TV. It was an amazing experience and worth every ounce of embarrassment. 1 was relearning guickly that if 1 gave producers good TV, in return 1'd get free goods. Yes, it was like being a prostitute, but a very well-dressed prostitute who has kick-ass furniture. After filming my makeover (and my fourth reality show), 1 assumed 1 could never do reality TV again. 1 had to be blacklisted somewhere at that point. Everyone seemed to recognize me as the stingy fool from Queer Eye. Even the Queer Eye producers recognized that 1 was a memorable character. 1 was so memorable, in fact, 1 got called back with twenty-four other former Queer Eye victims to be on Queer Eye's Mr. Straight Guy Pageant. 1 acted like my usual buffoon self, won second place, and got sorne more prizes, including Miss Universe's phone number. (She was one of

sorne viewers who felt deceived. Someone even started a peti tion to stop running my episodes. There were also online fo rums calling me all sorts of names. My three favorite guotes from these forums were probably "Alan is a fucking cheap ass dickwad," "1 think he is an asshat. Actually, l'd even go as far as calling him an assclown," and "1 don't know if he's a scam or not, but in my book, he's a creepy little famewhore." (Ahh, the beauty of anonymous posting on the Internet.) So what's a creepy little cheap-ass famewhore to do? Naturally, 1 moved on to audition for game shows. It seemed a logical transition, and possibly an ample source of money just waiting for me to collect. And, hopefully, not as many eagle-eyed fans. 1 knew 1 wouldn't win over everyone. 1 could barely win over a girl to date me. 1'd gladly receive sorne entertaining barbs in exchange for a fun and prof itable side gig like more television appearances. After a few rejections at the big-time game shows 1 au ditioned for, 1 finally landed one with a team. Jeff, my New

Tripped Out

A Mimon Bucks by 30

York roommate Andrew, and 1 got cast in a new word association game show called Chain Reaction on the Game Show Network. It is a three-on-three team competition. Watching the show, we realized that all the eontestants were boring personalities with boring stories (thev were work together, in the same friends since so on). We knew if we had a unique angle, a chance to win some money. So bor we' d get on and rowing an idea from my friend's comedy prank Web site, Improv Everywhere, we pretended that the three of us were in a barbershop quartet. Quartet means four, so we informed the produeers that the fourth member of the quartet wasn't a fan of the show. They thought that was a valid (and pos sibly rude) reason, but noticed our hook was distinctive an interesting show. We got booked, filmed the show a few months later, and wore ridiculous barbershop quartet outfits. Our team completely slaugh tered our opponents (don't underestimate the intimidatíon of candy-striped jackets), and we ended up winning Not bad $8,400! Only skill requíred: renting said for some brainstorming and a few hours our barbershop quartet hasn't had one hater. Yet.

ALAN COREY 101 Have a gimmick, a story line, and think outside the box. You never know what people will give you. It could be free trips, eJothes, or money, like 1 earned, to help me penny

beginning, 1 we were pinch a little more. on a good TV show with a story heIpingJerry Springer to line that they could use. And in return, they were helping us out by giving us a vacation. lt was a win-win for every one. It took some convincing (and sorne acting), and it paid off. And no one got hit by a chair! Well, except for Jeff. For The Restaurant, my gimmick was basically to be a distraction and provide mistakes, with the eustomers, 1 pounded into the heads of other blunders. In the producers my been embarrassed" tales ana will immess to push the envelope. Although 1 didn't completely through with everything 1 set out to do, it seemed to work for everyone: 1 was being entertained and being enter taining enough to make a few appearances throughout season one. Another win-win situation for me and the producers-but not for Roceo, toward whom 1 thetic after the first At this Doint, l've onfive reality shows and one game snow. w ny do 1 do it? Why do 1 like it? Well, 1 have no legitimate talents ro actually make a living on TV. 1 just have a willingness to be thoroughly embarrassed on na donal television, and that opportunity comes often. Plus, it's entertaining to me, and, usually, entertaining to others. And 1 obviously don't mind being eompensated for my best to ther. 1 know producers want good TV, and 1 give it to them (except if you are asking me to sabotage an entrepreneur 1 tespect). 1 even turned my gimmick ofbeing on reality shows into a gímmiek all its own. I've been paid

A Million Bucks by 30

hundreds of dollars ashow ro travel around the country to universities and perform my comedie one-man show my experiences on reality TV. It's caBed Creepy Uttle Pame whore, of course. Through it aH, I've learned that a gimmick, a twist, or just a new angle can help you create opportunities. those opportunities can be turned iuto other opportunities. Chapter 11

is the cornerstone of many successful people, ideas, and businesses. My idea was just finagling my way onto as many reality TV shows as possible. 1 currently don't see any more re:ality TV in my horizon, as people are truly sick of me. But that just shows how successful 1 was at And not one producer ever complained after finding out about my shenanigans, as they were appreciative of what l did for them. It was only those damn viewers on those hate-filled message boards that didn't likeme!

Basic Instincts YOUR car broke down? You want me to give you $20 to get your car fixed. And you'll pay me back $40 tomorrow? Okay. what broke in your car that costs only $20 to fix? Oh, the belt. Can 1 see it? Oh, your car's in the shop. The Jhop

blocks away. Why are you over here, then? Oh, your aunt lives down

AGE TWENTY·FOUR"TWO MONTHS,

like, fifteen

street? What street? 1 live down the Jtreet. Oh, 1 was .

thinking 1 might know your aunt. Why don't you aJk your aunt? lost her Job? Sure, Jure. Okay, so, yeah, only $20 to fix your

AND TWO WEEKS ............. '.'

Checklng account: $6~z¡ij':i

car belt. And you'/l pay me back $40. Okay, well, 1 can't help

Savings account: $0

you, because you told me the Jame story about a month ago. Yeah,

Second, 'hldden sMII

l'd

401(k): $5,300

Mutual ftlnd: $3,300:

Roth IRA:$6,0C)0

Equity: $21,500

a new Jhop. l like easy money. As someone who is naturally at

tracted to any deal, contest, or opportunity, I've run across my fairshare of scams and illegal propositions. As many people know, anything that requires money up front is a scam. And often scams do have a "too good to be true" vibe that makes them so hard to resist. l was doing okay with my millionaire goal, up to roughly $42,300, and 1 was still

100

Basic Instincts

A Million Bucks by 30

itching to much more. Any little would help. everyone, it's tempting to try to take the fast track to riches when it's offered to you, like all those Nigerian lottery scams and pyramid schemes. I had those opportunities more, but I ¡ust had ro remind myself that making money, especially a lot ofmoney, takes a lot ofhard work. So ifany-· thing was pitched to me with an "easy breezy" path to riches, then I to trust my gut instinct that it was probaa scam. Recendy, my friend Allison was walking down the street and was stopped by a modeling recruiter. She told her that looked beautiful, passed her a business card, and invited her to come in to the office the next day for an evaluatíon. Allison was excited, of course, and she couldn't wait to go. Allison's attractive, so it wasn't completely out of the realm of possibility that somethíng like this might happen. (Im probable, sure, but not impossible.) But Allison didn't want to go by herself, and she begged me to go. I was completely hungover, but I fina11y agreed, as the opportunity to see several models in one room seemed worthy of the effott. I had slept in my dothes from the night before (it was Ha11oween, after and I was wearing part of my disco costume of a powder blue leisure Being hungover, thus slow moving, I didn't have time to change. Forty-five minutes later, I met her out front of the modeling agency looking like a dead 1970s John Travolta. I explained that I made no effort to look good in order to make her look more attractive. I don't think she bought it, but she was happy I was there nevertheless.

I ~,1

IJ'

101

The place was the slickest place I've ever seen. There were flat-screen TVs in every room showing runway mod els, magazine covers framed along the wa11, and the loudest music pulsing through a place of business that I have ever heard. Once inside, Allison was given a whole bunch of forms to fi11 out. As I sat waiting on the bench ín the lobby, a nicely dressed man from the agency approached me and offered me the same forms, explaining that 1 had "an inter esting look," and that as long as 1 was there, 1 might as well get an evaluatíon as well. 1 had nothing el se ro do, so 1 filled them out. And I'm not one to ever tum down a chance to be in the spodight, hungover or noto After about thirty minutes, the waiting room became filled with attractive men and women-not necessarily model attractive, but peo pIe who were a litde aboye average in the looks depart mento But by comparison, the people that worked at the agency were far better looking than anyone in this catde ca11 1 was now a part of. Then a hot agency representative called us in one by one for an evaluatíon, This place seemed legit, or at least it would be exdting to be associated such a cool and trendy atmosphere. 1 went first. The spiel they gave me was that they were a modeling agency with connections to aH the big casting agents, magazines, and producers. They followed this wíth a hurricane of compliments, telling me how great and unique 1 looked, and that we could make a lot of money together. For anyone who wanted to hear sllch a thing, it was fairly intoxicatíng stuff: These people were pretty con vindng.

102

A Mimon Bucks by 30

Basic Instincts

They explained to me that all I needed to ger started was a portfolio of to show to agents, and then would get started casting me. Of course, they couldn't guarantee me they would get me any roles or gigs, but they couldn't rrv until I had a book to show people. Extreme Cheapskate Strategy Many gyms and health clubs offer you a free trial week. Spend time to research them and take advantage of this offer. When you travel out of state, say youare neW in town and would like to try out the gym; it's definitely going to be better than any hotel workout facilities. I kept this up for three months once,

stopping after I was

forty

five minutes to go work out eaeh day in a different town. You can choose your own limits (mine being the city limits).

Oh,

the book

ro be done a professional pho tographer, and even though I didn't know any professional phorographers, 1 was in luck, because they happened ro have some in-house photographers thar rhey could recommend. And, bonus: The for thejr guy would be abour $500 cheaper than if I went anywhere else-bur it was my choice, of course. So I could spend $2,000 using my own photographer or use theirs for $1,500. Por me, and for many other people, probably, the scam was easy ro spot, but I'm sure for i:hose who were desperate or seduced by the idea of fame, it was hard to say no. They

103

tried to make it seem like you were just $1,500 away from stardom. But like anything that requires payment up front, they were taking people for a ride. Afrer they were done with me, Allison got called. She went in and came out, and, of course, gor the exact same routine I did. Everyone in the room ended up being told the same thing. Some "evaluation"-it tumed out that everyone passed! None of us was model material, but course we aH wanted ro be. Who wouldn't? The sham mod agency was just preying on people's insecurities and dreams, and it herded in a whole new groupofpeople every single day. If one person bit, that was $1,500 in the scam artists' pockets, and then they' d put no real effort into cast ing the persono If the person complained that he or she wasn't getting cast, the agency would teH him or her to get new photos-maybe with a different look this time, and ro use its phorographer again. But now, since the person 'was a " the fee was only $1,200. And the cyele would never stop. 1 ran across another "dea!" when 1 was in a Polish neighborhood in Brooklyn. I was at a bar one night and be carne friendly with a bunch of guys who had had a litde too were telling me about how much to drink. trouble they were having getting green cards to stay in the United States. The thing was, they weren't trying to do it the legal way: They' d all paid American girls ro pretend to them. If they kept the marriage front going for a cer tain number of years, they could get a divorce and stíll re main in the United States. Meer some digging, I found out

104

A Million Bucks by 30

Basic Instincts

105

these guys didn't live with the women, barely knew the women, was the crux of their problem. fake interviewed bv the

golden carrot being dangled in front of you. But

Services every year, and-surprise-they all kept screwing up

and dig a deeper financial hole for yourself. M y feeling is ifI don't have to work hard for the money, the money

1S,

there is no guick and easy way to get rich. lf you there is, you wiU just throw away your hard-earned money

The spouses wouldn't know each other's birthdays, or what their dog's name was, or some other detail that people whp are actually married tend to have no problems recalling. It aH seemed very nerve racking, not to mention completely 111\;;15'1.1揃 And then they pitched the scam to me.

Unless you're paying for school or a class tbat will help you ~llUUIUl1 pay up front for any足 you reach your thing. You can't pay someone money to you need to do for yourself; for example,

They were planning on bringing their sister over to the States and wante<.l to know if I would be willing to "marry" her. Sure, I would have to go through the USCIS interviews

wanted to be a model, she could have done sorne researcb and found out exactly how someone breaks into the busi足

every couple of but after three years, they would pay me $15,000. Now, I like sound of $15,000, but the thought of following through with something like that

ness. And she probably couId have gotten a lot of answers ,500, if not for free. You're to scams only if you don't know what

scared me to death. Luckily, this was all pitched to me over

you want, don't nave a

my first beer, so I didn't make an intoxicated decision I later regretted. I got Otit of there pretty guickly with a solid no.

pIe who aehieved goaIs similar to yours

And rather than falling for easy money, whether it was a scam or not, I held on to the money I had aIread y earned the hard way. exist in unearned riches.

buy herself a modeling or acting career, but if she

other Onee

you know what you want, learn everything you can the topic, industry, and so forth, and use that knowledge to pIot out the steps to get you there. If you do that, no one wiU be able ro distraet you by offering the "easy way" out, because you'U be focused and already know what you need to do to get you where you want to be.

ALAN COREY 101 If it's too good to be true, then it probably is. When things are tight financiaHy or you're feeling like you're not

get them the hard way, Not by being foolish. People lose 1fl1llHllIS ous pie-in-the-sky seams. Luckily, I didn't have to

reaching your goal fast enough, it's tempting to chase a

lesson the hard way. My instinets knew what was best.

vari足 the

106

A Million Bucks by 30

AGE TWENTY"FOUR ANO .•1'HR••

MONTHS

Chec~ing

acé:ou,nt:

$f$,~

$avings a"ount: $0

second, hiddensa..,ngs acc:~unt:$'l

401(k): $5,300

Mutual fanck$3,JOO

Rolb IRA: $6,00(1

Equl.,-: $21,500

PA RT·

1·11

Total net worth: $41,0(10

Brokerihgahd.Budgeting

Chapter 12

Treasure Hunt THIS bathroom is disgttsting. [t's the only thing keejJing the apart足 mentIrom being wnsidered above average. [1[ make over the bath足 room, ['11 have more eqttity in the place becattse it will be worth more. [1 [ ever move Ottt, [ can rent it Ottt lor more. Man, what is happening to me? [ bet this is what adttlts think like all the time: "Let's do bathroom makeovers!" Didn't [jttst throw a massive beer bash? What's happened to me? Jestts H. Wheelchair, ['m getting so oldl Eleven months into property owning, 1 was spending a lot of time thinking about bathroom makeovers. It was sUghtly unsettling, like the feeling of finding yourself car足 ing about an American [dol finalist. But I had saved enough one, so I decided to go ahead and do ir. I got money to estimates from several contractors and handymen and went with the second-cheapest guy, who was also the one who promised the work would be completed the earliest. I job wasn't done even had him an agreement that if

110

A Mimon Bucks by 30

by the date we agreed on, he'd take $300 off the bill, which actually brought his price down to the lowest bid r got. r did a complete gut renovaríon of the bathroom: new shower, new tile, new sink, new toilet, and new overhead lighrs. The total price was $6,000. Now, when you renovate your home, and you do it right, you the value of the property close to egual, or sometimes even more than, the money you spent to fix ir up. Studies show that bathroom and kitchen are rhe most in helping owners recoup PVhPn<:p<: and the value of their home. Buyers care abour these two areas rhe most at prop ertles. Ir probably has something to wirh out sociery's obsession with food and potty narurOOIIl was In such bad shape, r thar ifI ir by buying at discount priees, contractor, and painted it myI in value to my apart ment. Ir seemed like another win-win situation to me. r gor and for cheapest priee. (The job was so r $300 knocked off the price, as agreed.) And it looked the apartment was now complete. Now r just had to find a way ro buy another one. Around the time of rhe bathroom makeover, my two year anniversary of extreme saving was approaching, and I was getting ready to check my finances once again. Ir was two and a half years since r had moved to New York City. My checking account balance was low after paying for the

Treasure Hunt

bathroom makeover, gone up my theNew York

111

hoped, because, as r fise. estate is based on IS comparables. In my situarion, all of the apartments simi to mine in my buildingand on my block were selling ayear before. rf T had more money chan rhey had ucdded to sell my apartment, r would have gotten more money rhan 1 had paid in 2002, because the comparables in rhe neighborhood were up. If 1 didn't sell, rhe difter ence between what I paid and what 1 could would be re tlecred in my eguity, since my apartment was worth more than it was when T bought it. I had a real-estate agent come by post-bathroom reno varíon, and as 1 had planned, he told me thar he could seH the place for $130,000. Fantasric. When r looked at my balances overall, T could see that rhe value of my stocks had decreased a líttle bit over the past year, bur the value of my real estate had increased gready. By owning property, I was in a position to benefit in both markets, which meant that 1 had a balanced portfolio. In other words, r didn't have all of my eggs in one basket. T couId tolerate sorne loss in one area and was able to benefit from the gains in another, which in my case was real estate. chapter You'll notice in my tally at the end of the principal on my mortgage is now $600 lower, as 1 been paying ir off (along with throughout the year.

112

Treasure Hunt

A Million Bucks by 30

As a result, 1 had added to my overall equity since equity value what you owe. 1 owed less, so 1 was worth more. In just over one year, 1 had added $24,500 to my over al1 financial picture by adding to my mutual fund, Roth IRA, and equity. 1 had benefited from a positíve real-estate upswíng and wasn't too hurt by a slow stock market. And 1 had an undísclosed amount still in my hidden savings ac count. So 1 had $24,500 more. but 1 still wanted to

113

Tip: If you're shopping online, never, ever buy anything without searching to see if there's an online coupon that can save you sorne money. Just Google "online coupon" and the product name. There are sites on the Web devoted exclusively to keeping track of who's offering what discount for how long. Sometimes you can score free shipping, sometimes 20 percent off. If you don't use them, you're just throwing away money.

Honestly, 1 expected the meeting to be pretty quick, one thar started with him laughing in my face and ended with him telling me to come back when I had sorne money. But rhar wasn't what happened. 1 did have money in the form of net worth, and thar's something. If 1 added up my 401(k), Roth IRA, equity, and checking and savings ac counts, 1 had money. Ir was my hands-off money, I didn't for mortgages at several dif then comes to you with the best offer.

want to spend it, but 1 had access to it. And I hoped thar would get me somewhere. He sat me down and let me know aH of my options. (1 really didn't rhink 1 had any options.) He explained that it was possible for me to do a zero-down deal (which is exactly whar it sounds like: putting no money down), but that would mean l'd have high monthly payments. IfI did want to go with zero down, he could

me a loan for $1

114

Treasure Hunt

A Million Bucks by 30

based on the value ofall my assets (stocks, equity, and bank accounts). But the a place after 1 was pumped-I could mortgage broker kept talking, so 1 kept listening. He asked me if 1 had any interest in a multifamily home. 1 wasn't sure what that entailed, but it sounded expen sive. He explained that was a fancy way of saying "a build ing with more than one unit," and that 1 could Uve in one apartment and rent out the others. And then he said this: If 1 were interested in purchasing a multifamily home, he would be able ro approve me for a $500,000 loan. 1freaked out. A half million dollars! 1 thought he was smoking crack. He just said he would give me a half million dollars! 1 thought maybe 1 had just smoked crack. What the hell was going on? 1 caught my breath after about five minutes, and then 1 made him explain how the Fred Savage this was possible. He told me that lf 1 bought a multifamily home, the property's rental units would generate income that could be used ro pay off my mortgage. Those sources of income would make the investment less risky, so banks would be more willing to provide me with a large loan to finance the purchase. We both knew there was no way 1 would be able ro afford the $4,000 monthIy payments that came with a $500,000 no-money-down loan. But ifI couId find a multi family house that 1 could rent out for a combined $4,000 a month, then a bank would approve the loan. The tricky part, of course, was that 1 had to find a place under $500,000

115

with a rental income of $4,000. 1 didn't know what lay ahead, but it was definitely worth a try. Ir was just so crazy, it just might work. 1 had to start this treasure hunt ASAP; 1 wanted this $500,000 loan before this mortgage dude changed his mind, like my mom did with her matched savings plan!

AlAN COREY 101 support your overall big goal is Having subgoals also crucial ro achieving anything. If you have only one big, goal floating off in the future, it's easy ro feel over whelmed, discouraged, and at a loss as ro how you're going ro get there. Subgoals provide the road map that tells you how. Subgoals help you know where you' re going and pro vide an achievable goal to focus on. Every time you accom plish one of your minigoals, you know you' re one step closer to the big goal, and you al so reap the benefit of in creased confidence, which will only spur you to get crack ing on the next step in your plan. 1 know this works, because lt's what happened ro me. My subgoal ofbeing a millionaire by thirty was to buy real estate every single year, and my commitment ro that helped introduce me to the idea of owning multifamily homes something 1 probably never would have thought of if 1 hadn't focused on figuring out how to buy another prop erty. 1 found that each time 1 accomplished one of my sub to my u~timate goal of being that much goals, 1

A Million Bucks by 30

116

a millionaire by thirty. It was something that could easily measured, and each time 1 took that next step, the progress from that would keep me motivated ro keep on going. Figure out whatever you want ro do; then decide on the steps you need to accomplish that goaL And then: going!

AGE TWEIITY路FOUR AND FIVE

IIIIQNTHS

Checki..g .Bccount: $900 Saving. 路account: $0

S茅cond. hidden savings acc:o-'nt: $1 401(k): $6,400

lIII.....al fund: $4,200 RoU. IRA: $6,000 Equity: $40,000 Total net worth: $57,500

Chapter 13

Friends Who Take Interest A half million dollars! 1 can halle a $500,000 shopPing spree! jeJus H. Moneybags! 1 need to find a place, and fasto I'm twenty-four years old; this is ridiculous. Okay, calm down. Walk armmd this open house. Act like you know what you are doing. Be cool. Let the agent think you might buyo Ask a lot of questions. Listen to what other people are asking. Get a flyer. Breathe. Breathe. Count to ten: one, two,

half million dollars!

1 went ro work immediately. 1 hunted all over and went houses as nOSSlDlE Sometimes ro as many multifamily (the income it produced) of the the agents had the rent property, sometimes noto When they didn't, 1 would go check out rentals in the building's neighborhood, to an idea of what the going tates were. Many of the propenies 1 saw for sale were listed at over $500,000 or had a rental in颅 come of les s than $4,000. Finding a building was turning out to be harder than finding a girl who didn't think 1 was

118

A Million Bucks by 30

a cheapskate, I couldn't give up. My house had to be out there somewhere. One day, as I was exploring my neighborhood and surrounding arcas, I happened upon an open house. There had been a fire in the two-family house a few years before, and the owner had renovated it with the cheapest and ugli est stuff possible. Ir had been sitting empty for two years, It wasn't pretty, but it wa<¡ really big, and it even had a back yard, which is highly prized in New York City, But the best part was that it was listed for $450,000; I just had ro figure out the building's rental income. One unit in the house was a three-bedroom. After doing sorne research, I found out that another ugly three-bedroom in the same neighborhood was going for $1,500 a month. The second unit was al so a three-bedroom, but it had an office, too, and I guessed that office had to be worth around $500. That meant the total rental income of the property was $3,500. Ir wasn't the $4,000 I needed, but the build ing didn't cOSt $500,000, I had ro go back to the mortgage broker ro see if this work. He punched sorne numbers into his computer and carne back with bad news. Interest rates had changed a bit since the last time we talked, and now I would need ro earn $4,000 a month in rent ro get a $450,000 loan with noth ing down. So I dug deeper and asked him if there was any way the deal could done, He rold me that if I carne with a 10 percent down payment, 1 get the monthly amount I would need ro make from renting to tenants down ro a target number of $3,500.

Friends Who Take Interest

119

At first, I didn't think that would be possible; I dídn't was the have $45,000 to fork overo But it seemed like way it was going ro happen. I had to get creative and find a way to make the deal work. 1 went back ro my apartment and brainsrormed. I ured that my only hope was to try ro lowball again, so I called up the and offered $400,000. No dice: She hinted that she had an offer much closer to the asking price. 1 had to this place; nothing el se I had seen had come this close to having the numbers work out for me. How could I come up with a $45,000 down payment? It would take me forever to save that amount. I didn't want to cash out my 401 (k), mutual funds, and Roth IRA. Those options an carne with hefty penalties and 1 wanted to keep those invested in stocks for rhe long termo The only option seemed to be to fiat-out borrow the money. I didn't know any huge benefactor with a lot of cash ro throw but 1 did know a few people with a litde bit of money. I decided it was worth a try, and I went ro rhe peo pie who trusted me rhe most: my parents. extremely I first pitched the deal ro my mother cheap mother), and she was, of course, nervous. She's always nervous with risking money, and she's never liked parting with any of it, no matter how litde. She finally agreed to give me $10,000, but 1 had to pay her back in full in two that, I would have to pay back the loan years. On rop percent interest. That was probably an additional more than a bank would charge me, but then again, with my financial situatíon, a bank probably wasn't goíng to

120

Friends Who Take Interest

A Million Bucks by 30

give me $10,000 to begin with. 1 figured that in a worst case scenarío, 1 could se11 my apartment and pay her back. Next 1 went ro my dad. He said the same rhing he al ways says to me: "Whar does your morher rhink about this?" 1 told him that Mom gave me $10,000 at 10 percent interest. My dad said he would do the same thing. 1 also promised him 1 would sell my apartment to get the money to pay him back if necessary. 1 now had $20,000 in my hands, which was great, but 1 sti11 needed $25,000 more. 1 went to two of my best friends, Fat Matt and Tall Phi!. Ir was weird asking my friends for a chunk of money, but 1 told them about the deal 1 struck with my parents and offered it to them too: paid back in full in two years, plus 10 percent interest. 1 told them 1 would cash out my 401 (k) and Roth IRA and pay them back if necessary. 1 was young enough that if it didn't work out, and 1 did have to drain my retirement fund which, really, you should avoid at all costs-I could start my 401(k) investing plan aH over again. Ir wasn't the best disaster plan, it was my worst-case-scenarío disaster plan, 1 had decided that 1 needed to take a big risk. After sorne sleepless nights, they agreed to help me out. They both lent me $10,000. Friends are nice; rich friends who will put up ten grand each are really nice! (Thanks, Fat Mate and Tall Phil!)

121

Extreme Cheapskate Strategy Buy one pair of multipurpose shoes ayear. Don't buy any others. If shoes make or break you with any business deal, date, or intervíew, believe me, unless it's a

with a foot

fetish, it isn't the shoes.

And ro prove that sometimes day jobs aren't al! that bad, 1 found a way to convince my boss to give me a full year-end bonus and a slight raise. Picking up on my first year-end review, 1 reused my strategy that worked before. Since day one of employment, 1 saved every thank-you e-mail any cusromer sent me after 1 answered his or her question on the computer hotline. 1 saved anything con taining praise about the speed of my work, the quality of my work, aod more. And if 1 had a good rapport with the customer, I'd ask him or her ro seod an e-mail to my boss sayiog that same thing, aod ro copy me 00 the e-mai!.So during my year-eod bonus review, 1 presented a stack of printed e-mailsshowingwhatgreatworklwasdoiog.Ir.s hard to say no to documented proof, no matter how much of a slacker 1 really was around the office. And believe me, 1 had played over three thousand games ofTetris, so 1 was the king of slackers. My reward? A $5,000 bonus once again, giviog me the last of the money 1 needed. 1 had enough for a down payment!

122

A Million Bucks by 30

Friends Who Take Interest

123

I had two years to figure out how to pay back my

tual fund investment. I had to focus on keeping up with my

friends and parents, but I knew that my expenses weren't

mortgage payments, paying back my friends and family,

going to go up, and I planned to continue saving like crazy.

and finally building up an emergency fund, as I should

With the raise, I had a little more money coming in each

have been doing all along (in case things really went sour).

month now, and I still continued working odd side gigs. I

In my head, I had my stocks as my emergency fund, al

thought about even getting a legitimate second job if nec

though that was technically cheating. Plus, I had just

essary, but only if I had trouble finding sorne renters. I was

promised them to my friends as collateral if I defaulted on

aboye water for the time being, but I was mentally prepar

my loan, so things were tight, for sure. Maintaining my

ing myself in case I hit sorne financial rough patches.

lifestyle of extreme saving was now more important than

I called back the agent and offered the asking price of $450,000 with 10 percent down. I got a call back that same

ever, especially because I now had other people's money on 1'.

the lineo And though they were not the types to break

day, and the owners accepted my offer. The house was mine!

kneecaps, the shame and guilt would have been far worse. I

Just six weeks later, I was closing on the house. I

had ro make it work. I had no choice. I just had to remain

showed up with my checkbook and a smile. The agent even

super-optimistic if I encountered any hiccups along the

told me she was glad that I had gotten the place, saying she

way.

thought I would make the best use of it. After about two hours of signing papers and giving handshakes, I was a

ALAN COREY 101

twenty-four-year-old who owned two properties. My port folio had changed drastically once again.

When you see an opportunity, one that is key to your fi Tip: Never invest your money in some

nancial picture, don't give up on it. Find a way to make it

thing you don't completely understand.

work, but at the same time formulate an escape plan. That's

You've worked hard tor your money, so

not being defeatist, it's just being prepared. I saw the house

work hard at investing your money.

as a big step toward being a millionaire by thirty, and I was determined to get it. But I al so knew that if it didn't work out, I could cover my debts. I also had a credit card to put

That feeling was awesome, but now things were really

expenses on if I got inro real trouble, although I definitely

tight financially. Drastic times called for drastic measures: I

knew to avoid that route if at all possible. That was worst

put a temporary stop to my monthly $200 automatic mu-

worst-worst-case scenario.

124

A Million Bucks by 30

If you don't get what you want at first, try another tac tic, and if that doesn't work, think of another strategy. I found out all of my options from a mortgage broker, and put in a low bid on the house. When that didn't work, I went to my famUy and frieods, but I wasn't asking them ro give me money. It's never a crime to ask for help. The key is figuring out how the people who can help you can bene fit from doing so-then you're helping each other. My favorite part of having a day ¡ob was the year-end review. This 1S usually hated both boss and subordinate. a bonus and a raise. I looked at it as my one chance to So thinking ahead a full year, I collected everything to me with my case. It worked the first year, so I made sure it would work again. Plus, I knew I had a difficult case to pre senr. My mind was always on personal projects rather than the company's needs. (If not Tetris, then it was real estate, side gigs, and fantasy football.) Yes, I was reliable and pro fessional, but I never went aboye and beyond my responsi bilities in the office. I had other things to deal with winning f~llltasy football). However, I knew 1 needed that money, and I found a way to get that bonus. strategy worked for me time and time 1 avoided tapping into my hidden savings account that was now for emergency purposes only. It was using other people's money that helped me take a major step toward being a millionaire. If I hadn't enlisted thejr help and taken that risk, I would probably be in a very different financial position than I am now.

Friends Who Take Interest

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Rooms with a Few

Chapter 14

Rooms with a Few THAT'S what the ad JayJ.

yOll'll have JixroommateJ. YeJ, Jome 01them twe JtrangerJ to me. /t'J going well, been doing itlor Jeveral monthJ now. There are three bctthroomJ, JO you don't to worry waiting in fine to UJe the toilet. That Jeerns to be evervone'.r con cerno there are two kitchem. YeJ, Jtrange si/uation. /t uJed to be two now it:\ orte. hard to exjJlain. If you're interested, 1 would}ltJt JuggeJt you come over andJee it. The jJ/ace is huge, / think like it. You make Jome Iriends. And it's priced well too! I had accomplished another goal: 1 owned more real estate-a multifamily, no less!-and I was now a landlord, which meant that other people were going to pay my mort gage for me. It was exciting, mainly because 1 had a new with the word lord in ir. But slightly terrifying, be cause I was basically broke and owed aH kinds of money to the bank, to my family, and to friends. I had to figure Out a way to maximize the income from my two properties. The going rate for a nice three-bedroom in the area was about $1,750, so getting $3,500 from my two-family was

127

absolutely doable. After aH, one apartment had an office, and one unit had access to the backyard. But I really wanted, and needed, to make more money off the house. So I came up with the foHowing plan: I'd convert the two-fami1y into a one-family, and rent out the room s at dif ferent rates according to their size. (The "renovation" process amounted to taking a door off its hinges.) So, basi rather than having two units with three bedrooms each, I had one big house consisting of six individual one bedrooms for rento My friends had said they would be will ing to pay at least $700 to live in the smallest bedroom in house, so renting a medium-sized room for $725 seemed reasonable. After converting the house into a one family structure, I also decided to rent out the office as a bedroom too, now making it seven one-bedroom places to rent with two shared kitchens and living rooms. Lastly, I decided that I too would move in to the house and move out of my $1,1 OO-a-month apartment. The reason? I found a friend who would rent it from me for $1,200, scoring me an extra $100 a month of income in the process. I drafted sorne rates for the individual room s in the house, and this is how it broke down:

128

A Million Bucks by 30

Total rent: $4,150-$650 more than ifI had kept building a two-family! This was definitcly the smartest plan financially, and 1 was excited about putting together a

Rooms with a Few

129

1 could fill the spots fast and have a choice of roommates, rather than being forced ro accept just anyone who

But it did come with all S!lrreal tiog stuck the same drama. kept iosomnia Ooe determined room mate switching rooms with everyone io the house ro tty ro see if that would help alleviate his disorder. It never did. As happcns io living situations like this, two frisky room mates hooked up with each other 00 and off. Aoother

1 envisioned myself living with good friends and hot

got pisrol-whipped aod robbed walking home late ooe·

modcls, not Hells Angels and meth heads. My strategy worked. After 1 sent out sorne e-mails and posted sorne ads

night; he moved out the next Two stroog-willed/weak-brained tenaots started a war

online, 1 had more than a handful of potential room mates to choose from. (Although no hot models ever applied.) 1 realized that 1 really didn't know what 1 was doing

over who bought and used the most toilet papero The war

lívable rooming-house situation. To hclp me do thar, 1 intentionally kept the rent for each room low so that

and had to educate myself fasto 1 bought a few books 00 how to be a landlord, ioterrogated my real-estate attorney (real-estate attorneys are required when purchasing real es tate in New York, so 1 knew a couple), aod went back ro doing sorne online research. 1 came away with blank lease forms, a basic knowledge of the renting process, and sorne much-needed confidence. 1 quickly filled the room s with a combination offriends and people 1 had just met who 1 thought would be a good fit. 1 was creating the kind of college lifestyle in the world adults that 1 had been shootiog foro It turned out to be sort of like college, a bit like MTV's The Real Worlri insane. We were, after aH, seven people (sorne of them straogers) living together and "gettiog real" io one big Brooklyn house. Maybe too reaL It became The Real World: Brooklyn. Which, if you ask me, is better thao get-

eoded after a span of three months when my basement got flooded with sewage. As the plumber explained, "A amount of papet towels was io the pipes." (That made sense: Paper towels were the backup choice during the toi let paper feud.) a mar Ooe sexually cufÍous renter was sleeping ried couple down the street, and one girl who was socially conscious would invite the local homeless populatioo over to feed them. The musically inclined roommate had weekly midnight band practice io the attached house next door, conveniently rook place in the room adjacent to mioe. And, no, his group never got a tecord of this made for ao interesting dyoamic, ro say least, and 1 learned ro refine my roommate selection process by fiworing word of mouth aod referrals from other friends over complete strangers needing a place ro live. The saving grace was that we were living in a two family house, which meaot we aH, crazy or not, had plenty

130

A Million Bucks by 30

ofroom. We

two

Rooms with a Few

lLueus. two

rooms, and three wasn't cramped, and everyone

131

Neverthcless, things were going weIl, if not a bit mad cap. The only real snag was the $600 windowless office,

everything.

which was turning out ro be harder to rent than 1

were other headaches too. A

months after

When we all moved in, I'd found someone to take his lease was up, in no time at for three months,

my roof had to be retarred because rainwater was about to make my ceíling give way; ir set me back a

he was moving out. 1 couldn't anyone to

painful $6,000. 1 knew it was in need of repair; however, 1 hadn't done my homework up front to find out exacdy how

1 decided that

much it would cost. A home inspector 1 hired told me the roof would last me one more year, maybe two. was wrong.

take the shit and rent the gold: the 1 figured 1 master bedroom 1 had been using. 1 moved into the oHice on renting out the master bedroom for a

over

1 could do was Iive there my

which took no time at aIl. My onIy

Tip: Do yourself a huge favor and don't

was thar 1 hadn't come up with that idea in the beginning!

shop with your credit card; ¡t'U keep you

(Shocking, seeing as how 1 never flinch at living bclow my

from spending money you don't have.

means.) With this adjustment, my total monthly rent roIl had improved yet again:

pipes in a neighbor's attached house and. his house wasn't flooded, but mine was. He promised to pay

One slIIall

me for all the damages; it's been three years, and I'm still

~~$650

FOil' medi.....~si2edI'OOlllS• •~5 Une ...aster lledroo.... $800...•

waiting for his $2,000 check. 1 think it will come the same day my tenant's band gets a Grammy.

sacia

One offlce W.DO wlnd. . . .$O (....ne)

1 also had to deal with the challenges of living with friends who were also my tenants. They wanted a on

One apartment. $t,:aOO

Total·...onthly rent: $5.550

rent, thought they didn't have to pay on time, or wanted to renegotiate alease two weeks after one had been As much as 1 wanted a casual living environment, 1 explain that

My monthly property expenses were the following:

was hard..

I I

132

A Million Bucks by 30

House mortgage, $3,500 Apartment mortgage, $700 Apartmeld maíntenance·'ees, $400 Total montll'yexpebses: $4,600 Total moldll., prefil from real estate: $950

Rooms with a Few

133

job was no longer an economic necessity, as 1 sti11 had in come from side gigs and was still saving as much as possiThings were actually working out, and even though 1 had planned it, 1 couldn't quite be1ievc it. 1 imagine ir would be like what a pot farmer feels when watching crops grow. Sure, he'd planted all the seeds, but 100k at aIl that free ganja!

In short, l was getting paid $950 a month for living in my own house! 1 had no living expenses besides food entertainmcnt, and thar figure never broke more than $300 a month. Insurance, utilities, taxes, and repairs would take a cut of my monthly profit, but overall 1 was still coming out way on top for sleeping in my own house and collecting rent checks each month. Even with this development, 1 was still working my day job, still putting 15 perccnt of my paycheck toward my (k), and still making a deposit into my Roth IRA. (1 had cut back on my mutual fund contribution only tempo rarily.) Plus, 1 was still earning savings bonds from my credir card, still working the occasional side here and there, and still eating way too much ramen. AH my penny pínchíng, deal making, and hard work were paying off more than 1 ever anticipated! 1 was making a decent i ncome with no viable skílls, after aH. Given aH of this, 1 esrimated that 1 would probably be able to pay off my friends and family within two years as 1 had promised, without cashing in my coIlateral. My income was higher than aH my ex penses, thanks to my rooming-house situation, and my day

ALAN COREY 101 Once again, 1 used my go-to strategy ofbcing rcsource fuI and creative. This is the best way to handle any tightly mn endcavor. 1 got more income from my properries by mishmashing tenants together, rather than being conven tional and renting out two units. lt was more work and more headaches, but it was also mo~e incomc. lt was also my first srint as a landlord. Landlording wasn't something 1 had ever thought of doing, but 1 knew tbat didn't mean 1 couldn't do it. 1 just hadn't done it 1 had to educate myse1f and build up my confidence. Ir wasn't rocket science, judging by the look of my first (and lasr) landlord, not even close. 1 just read as much as 1 could on landlord-tenant situations, so tbat 1 was as prepared as l could be. And still tbings happened that 1 hadn't antici pated. You can never be prepared for everything, and in unique situations like the roof caving in, rhe basemenr flooding, and my roommares moving out wirh only twenry-four

134

Rooms with a Few

A Million Bucks by 30

had to roll with the punches. 1 did have hours' notice, 1 hell did 1 get myself into? several times thoughts of What during my first year oflandlording, but I was committed to this project, and 1 had to make it work. If I got unnerved and too frantic, 1 couldn't dwell on it-that would only make the rough patches rougher. I just had to keep on truckin'. Another milestone I reached was final1y having no liv ing expenses. This was a necessary (and huge) step to getting me where I wanted to be: a millionaire by the age of thírty. 1 had reduced my cost ofliving to such a minuscule amount, it didn't take much rental income to cover it. 1 was able to achieve this goal by renting the best rooms in my house and accepting to Uve in the worst room. 1 didn't a master bedroom, I needed a couple extra hundred dollars a month. 1 would the master bedroom someday, but I didn't it then. I was getting paid to Uve in an office. That made me happier than any master bedroom could. Lastly, 1 still have to thank the mortgage broker for ex plaining the benefits of having a multifamily house. 1 just took it one step further and created even more units by renting out the bedrooms separately. I was young, it didn't matter. 1 brought the dorm life back to NYC, and it was a helluva lot of fun, not to mention a helluva lot of income. And that was an important lesson to learn: Even with al! the Real World drama, making money can be fun as shit.

AGE

T"ln¡N"Y~FOU" ANDi$lEn'E.

MONTtlS

......Inetworth: $61,650

135

Pressing Matters

Chapter 15

Pressing Matters WAIT, is my lije

or is it awesome? I can't tell. I serape

work hard, and what is the reward? There are so many things

l' d rather

doing, and so many things I wOldd like to have, and

I'm dejinitely getting a little burned out on this extreme savings programo On the other hand, ['ve never been haPPier. I feellike l'm making progress; hel0 1 know l'm making progress. I have enough to buy a house, or at least an apartment. That's a huge ae t:Omplishment right there. But is

millionaire goal worth all

thiJ work? Well, ['ve been a little imane, yes, but I truly am en joying the lltadness

01 it all.

It's a ridiculous feeling, I know l'm

doing more than enough on my savings, bltt

so mueh fim push

ing mysell to new limits eaeh day. Okay, my lije isn't miJerable, awesome. l've Jtuek with ir lor three years, and if I just ride ir out to my thirties, ['II be one really

dude, and then 1 ean quit

my day Job, travel, and "live it up. JJ When l'm a millionaire, I willlive that life ['ve dreamed about. The one in the rajJ videos, but

having to return the Rolls at the end 01 the shoot.

137

aH right. Amazingly, 1 was whole, 1 was On still able ro score an occasional girlfriend, even though I was an extreme cheapskate. (A boyfriend with the mie of staying in one night a weekend to roil on PlayStation 1S not impressive to most women.) Things were tough financially, but 1 stíll found ways to enjoy myself, even on a self imposed tight budget. The million-dollar light was at the end of the tunnel, but I was definitely still in the tunnel. r d living a restricted lifestyle for a couple of years, myself food in any form and limiring myaccess to most of my money, and 1 decided that 1 wanted to finally reward myseIf for all my hard work. But 1 wasn't ready to abandon my plan to be a miUionaire or be sidetracked that goaL 1 needed to reward myself while also sticking to my goal and savings plan. My soIution was the Billfold Blowout™. Every Sunday morning I'd walk to my bank's A'1'M-past aH rhe other ATMs thar charged me $1.50 per transaction-and with draw $100. 1 was sick of accounting for every penny. 1 wanted to have a lirtie leeway, and this would still keep me on track. The mIes were simple: 1 could spend only $100 a . week. 1 was not aHowed to go back to the ATM or use my credit card until the followiog Sunday. '1'his one ATM trip became my church outing, and 1 paid my respects to fee-free machine once a week. I also made it a rule th,at I had to spend aH $100 by the following Sunday. If ir was Saturday night, aod 1 had $2, rd go get some ramen noodles and play some Madden NFL

138

Pressing Matters

A Million Bucks by 30

Football. If I had $60, 1 would go out, watch a movie on opening night, catch a cab to meet my friends, and then drink myself broke. It was I was on a budget, but for once it didn't feellikc it. My new strategy didn't require always taking the cheapest opdon, always hunting for a grocery store treasure, or analyzing every single purchase for an hout. Ir was the best budget system ever. Plus, I to reward greatly on Saturdays if I had any lefrover money. IfI didn't, it was back to the good 01' days of count pennies to see what I would eat for dinner. (It was always ramen. 1 definitely should checked.)

my sodium

The truth is that the best weekend night I ever had on my Billfold Blowout plan was the result of the most crea tive six days I had prior to it, and it barely cost me a cent. My aH-time favorite band, OutKast, was playing Madison Square Garden one Saturday night, and, clearIy, 1 afford to go. I'd been a fan ofOutKast's since they were just a local Adanta rap duo with a misspelled name, and now were Grammy Award winners on a world tOur. I was determined to be there. Obviously, buying tickets was not

139

Now, my journalistic experienee was limited to a se mester in eollege, writing comic strips and an oeeasional musie review for the campus paper. It was through this that I discovered the bountiful universe of free music swag, and usually all it took ro sorne was a letterhead and a maehine. A to the publicity dcpartment of the band's record label usually produeed not only a eopy of often press packets, posters, T-shirts, a CD for review, opportunities to interview the band-and, yes, free tickets to nearby shows. Being a reporter (even a fake one) nitely had plenty of perks. Extreme Cheapskate Strategy Challenge yourself with your thriftiness. lf you make saving into a game, it will make

thrifty interesting for you.

And share your experiences with your friends and family, or with an online community. lt'-5 very

to communicate

with people doing the same thing you are doing. That means write what you are doing in a joumal, or start a blog, or just talk to your friends about ¡t.

an opdon. My budget would not allow that, as doing sO would just be giving in to an expensive "want." So I had to figure out a way ro get in for free. I sat by the radio and

Iwasted no time drawing up logos for Ace NYC, a

tried to win tickets duting aH the contest caH-íns. No luck. 1 tried the fan-mail where a fan would

phony monthly publieation fuH of After staying late one hour at the day job, I had a bogus logo, letterhead

tickets. No luck. 1 had no more ideas what any insane penny-pinching fan tickets: I ereated a fake magazine.

with the vague alliterative slogan of "Musie Makes Man hattan," and business eards (hat ttansformed my residential house into a semilegit eommercial ad.dress. AH it took was

Therefore, I do to get free

140

A Millíon Bucks by 30

to my address. 1 also gave mysclf the music writer," because it sounded earnest and in case 1 came across any inquisitive recoru label peeps. As much as 1 loveu Ace NYC, 1 knew there was no chance in heH 1 was getting any access to OutKast. So 1 ue cided to focus my attentÍon on the opening act, figuring the banu's publicist would be pleasantly surprised that anyone gave a rat's ass about the group and that he'd be trying to milk the spot on the high-profile bill for all it was worth. 1 called the publicity and promotions department of the banu's recoru label anu asked for a media kit and a press pass. A fax or two 1 was on the press list for Saturdav night and able to see the unknown opening act 1 had done it! Creativityand you know, OutKast-for sorne slv moves aHoweu me to pull it off. The show was 1 even

arounu to spending the $9 1

left in my weekly budget on two beers-one for me anu one for a young lauy 1 met at the show. So, overall, no one was hurt by my little dishonesty. A girl got a free beer, I'm writing about the show now, and 1 hau the best time of my life. Sauly, for the life of me, 1 cannot remember the name of that opening banu (or the lovely creature 1 kissed), but 1 hope they're aH doing we11, and 1 will always think of them very, very fondly. Anu, yes, Ace NYC hopes to print its first issue one of these days. 1'11 figure out the name of the opening band by then.

Pressíng Matters

141

AlAN COREY 101 1 like to think that making a million dollars is like 10s ing fifty pounds: Both provide new freedoms and options to the people who achieve these goals, but neither of these ob jectives can be achieved overnight. Instead they're accom plíshed through small but crucial choÍces made every day. Just like there is no prouuct that a week, the chances that twenty pounds a are prettv slim (so to Ul-"_~".f' ton of weight) is actually you need is focused effort, right mind-set. People who stick to a plan and make good daily decisions with regard to that plan end up with amazing results. Those who don't, or those who cheat themselves, either get no results or, per haps, even inverse results. The Billfold Blowout is just like the Weight Watchers point system that helps you track your calocic intake. You are allowed a certain budget, and you can you can't exceeu it. If you are really goou aH afford to cash in your points for a cheesecake, or in my case, a cab ride and drinks, The best part is that no math is ever involved: Whatever money is left in your wallet is money in your budget, key to llIlallual rocusea on your that focus to all your spenuing uecisions. to buuget, and it sounds really boring, the cornerstone of staying on track financially,

142

A Million Bucks by 30

Pressing Matters

1 was beginning to have a negative attitude about my financial situarÍon. 1 knew that thinking positively had

AGETlNEJl1'Y.FQUR ANOEIG""

gotten me far, but eventually 1 realized that 1 had to make

MONTHS

a change and reward myself 1 had to adjust my plan, but 1

Ch~ck••9a~.~: $"~OOO

didn't want to give up on ir altogether or detraet from my overall goal of being a millionaire by thirty. My solution

savings ace....t: $O S~o.dr hiddellsavings ilCCOqnt: $?

was to get ereative and have a built-in reward program in

401(k): '-'0,Z50

the form of my Saturday night blowouts. Maybe that's not

Mutual ....lId= $S,150~

YOut thing. Maybe you don't want to Uve on $100 a week.

Roth I.RA:.$6..000

That's eooL Make it $150. And then in a few weeks work

-=lIu_"on.. apal'llllent=· $~,OOO

your way down to $1

Ellu", Ob. hoQse:. $,1.000

. And then try to get to $100 even-

But remember this: You make purehase deeisions multiple times a day, and if you go into

purehase deci

sion telling yourself that you have a spending limit and to ir, yQu'll have more money than you know what to do with over time. 1 guarantee it. Oh, and you' re welcome to tey my

mag idea to

into shows. Just keep in mind that Ace NYC is taken. Who knows, maybe my 'zine will write about your band someday-I'll be in toueh with your publicist.

'nIta• . • ,nrorth: $6á,400

143

Running for Coverage

145

blown the president. 1 explained to them all about saving a lot up front, going to open houses, and how 1 borrowed

Chapter 16

money from my friends and family. 1 probably told same story about twenty different times to twenty different friends. 1 was happy to share my strategies with anyone who was truly interested. But then 1 was asked by friends of friends, and friends of friends of friends. Most of the people were just looking for a loophole or a slipup in my story, but

Running for Coverage

a few were genuinely interested. After a while, it got a little tiring telling the same story over and over to people 1 dídn't even know. 1 decíded that 1 would tell the story once, and if people wanted to hear how 1 was able to buy $560,000 worth ofproperty for $14,600 of my own money, they could come and listen. Of course, 1 planned on charging a few dollars a head for my trouble. 1 contacted a local comedy theater and found out that

HELLO, thanks for coming out. 1 aHume you are here because you want to have better control 01 your finances, get out 01 debt, learn how to invest in real estate, or just be richer overall. That's great. 1'11 tel! you what 1 know about al! 01 that. Please ask questions, plenty 01 questions. 1 don't know everything. 1 just know what 1've done. But first 1 want to learn about each 01 you, and what brought you here, what your goals are. Thanklully, itJs a small group, so take your time and share your story. Karl, not that story. My circle of friends knew that 1 was doing some big time investing. They were getting my e-mails looking for tenants and such.1t was as odd to them as it was to me that 1 was a landlord. Pretty soon my friends wanted a piece of the action too. Whenever we went out, they asked me all about it. They wanted to know where 1 had gotten the mooey to do it. They knew 1 was cheap, but still they were convinced 1 had gotten an inheritaoce, won the lottery, or

the place was empty on Sunday afternoons. 1 asked if 1 could use the space at no cost to teach a reaI-estate class in exchange for giving the theater a cut of what 1 collected at the door. They agreed. 1 was a little pesitant to send out press reIeases proclaiming my expertise in investing, but 1 knew what 1 had done, and it seemed to interest a lot of people. There 1S no official format of a press reIease, so, like 1 ways dip, 1 just followed examples 1 found online. 1 figured the places 1 was sending it got hundreds of press releases a day, so mine had to stand out. 1 titled my press release . "How to Be Richer Than Your Parents." 1 figured that would get them to at least read it and give che story a

146

Running for Coverage

A Million Bucks by 30

147

chanceo Although "How to Be Cheaper Than Your Parents" was really what the class was about.

back. So, no, the class wasn't a sold-out packed event, but if 1 hadn't done it-because, say, 1 was afraid of looking like a

The press read it and, surprisingly, had no hesitation abour calling me an experto A local blog wrote about me, and leven got a write-up in the NeUJ York Post and Time Ottt New York. The word was out, and the New York media was callíng me a "financial whiz kid." 1 had never thought of myself as that; 1 saw myself as a paranoid saver who bought

loser or falling Bat on my face-I never would have gotten the press 1 did. And that press opened other doors for me. People who read the artides were calling me up at work trying ro partner with me. Other people who were already

property when 1 could-bur I would be lying if 1 said I didn't like the attention. AH it took was a pressrelease, and the press was fooled ioto thinking 1 had skills!

landlords got in touch to share war stories and ask for ad vice. Even a few long-lost friends read about me and just called to reconnect. (You know, those friends you have that aren't MySpace and Facebook savvy.) It was a pretty cool ef fect, and the result was that when I had enough money

Extreme Cheapskate Strategy

saved up to buy another property, 1 now had a Rolodex of experts already working in real estate who wanted to be

I would fill out comment cards at every possible fast-food restaurant. Many would follow up with complimentary food and/or gifts. My girlie complaint at a Wendy's that the bathroom was too cold resulted in an envelope containing an apology letter plus coupons for three free hamburgers. And they were right: It takes only three Wendy's hamburg ers to stay warm in their bathroom. (And it kept me in there another half hour.)

Despite this mini flurry of press, the class came and pe 0 went, and it was sparsely attended. I didn't mind. pIe who came really wanted to learn my story, and it was very rewarding for me ro help them out. leven made $200 for my three-hour class after giving the theater íts kick-

my partner, ageot, or mortgage broker. The dass itself turned out to be only part of the pícture: Having my name out there had reaped some amazing benefits that had noth ing to do with whether or not the event was standing room only or a total busto The experience taught me that once you get press, it's easier to get more press, and that the more people who know what you are doing, the better your opportunities be come. 1 wasn't always wheeling and dealing. People would contact me and take me to Knicks games to chat, or they'd take me out to lunch; others just wanted to exchange some e-mails. Any and a11 of it was fine by me. People saw that 1 was doing something they wanted to do, and they wanted ro píck my brain or swap ideas; and 1 was happy to be in the company of anyone who was interested in the same things that 1 was. AH of it was time we11 spent.

148

149

Running for Coverage

A Million Bucks by 30

AlAN COREY 101 If you have a story to teH, share it in whatever way makes you comfortable with the widest audience possible so that like-minded people can find you. lf you've got a unigue angle or informatíon that people want and need, consider speaking somewhere or teaching a class. I consid ered myself far from an authority, but I knew what I had done, and the press decided that what I had to offer was good enough to label me an experto AH it took was a press release and an theater space on a Sunday afternoon, and I was introduced ro a whole new network of contacts and friends, many of whom remain in my life both profes sionally and personaHy. And the experience touched off a cycle of media attention that only snowballed over time. Maybe standing up in front of a room full of people for you, or isn't for you right now. Find a smaller forum for meeting and connecting with people, like a pro fessional organization or a local club dedicated to real estate invesring, small business ownership, or whatever your interest is. Connecting with people who are interested in the same thing you are is a great way to stay engaged with your ideas, maíntain momentum and enthusiasm for the work you're doing, and build your network. If you read about someone doing what you want to do, reach out to him or her. It's important to remember that people who are passionate about what they do love to talk about aod that people who are successful at what they do know that good ideas and informatíon cao come from

anywhere. (That is, io fact, part of the reason they're suc cessful.) The reality is that often parries on either side of the eguatíon benefit. When people got in touch with me, it wasn't all about what they couId from learned from them too. And Iastly, if someone who's looking for your help and advice approaches you, never forget that one day you might ask for his help, or that he could be your next partoer. 'M"

•• "

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"nI"<,TWO,WEEK.S Check_"s 21c«:0Ilnt:$1,.0

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!quib' on hO"ll5e:$1,ooO Total nel WOr1h:$64.650

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Chapter 11

Smells Like Team Spirit THIS place is so nice. You did al! this work yourJelf? This is one hel! 01 a gut renovation. Jesus R. Makeover! ThiJ house iJ exact same dimensiom as mine, but youy.r is one hundred times bet足 ter. Man, you really know what you are doing. You've done this before? Yeah, 1 can tell. So you are into real estate too? 1'm the least handy per.wn in the world We should totally partner up. Rey . .. wanna buy a place together?

That was the first conversation 1 had with my next-door neighbor. He was a young guy like me, and he had his own real-estate strategy: He would buy a place, fix it up, and live in it for two years. Afrer thar, he would seU it. Then he'd buy another run-down house, fix it up, live in ir for rwo years, and seU again. Get this: He didn't have a jobo He just lived off rhe money he made by selling his house every rwo years. He had raught himself how ro renovare, and it helped thar he was a perfectionist-the place looked im-

154

Smells Like Team Spirit

A Million Bucks by 30

maculate. But why was moving every two years? He had to be running from the law. 1 learned that in America, homeowners reap some amazing benefits when it comes to paying taxes. The capi tal gains tax on real estate exempts you from paying taxes on up to the $250,000 that you make on the of a property that you have lived in at least two years, and that figure doubles if you are married. My neighbor was mar ried, so he was exempt up to $500,000 on any profit he made on his real-estate investment, his own house. 1 esri mated thar by purchasing run-down property ar a discount and selling it completely made over with high-end renova tions, he was probably averaging a $350,000 payday every two years. And, ofcourse, he didn'r have to pay taxes on any of ir. This guy had rhe besr ever! 1 didn't have rhe handiness to make over my own place, bur 1 liked his work, and he liked my obsession with real ayear to kill before he could seH his place, and he was getting restless sitring ar home doing norhing. 1 proposed that we buy a run-down place rogerher, and he could teach me how to renovare it as we worked to gerher. He liked the idea of nor doing all rhe work for once, and, righr rhere, we shook hands and created firsr partnership either of us had ever hado

155

Tip: It takes aman to admit this, but leven got a pointer from The Oprah Winfrey Show once, and I adopted it for myself.

Anyway, she has a rule that if she really wants something, she waits twenty-four hours. If she still really wants that prod uct, shirt, or whatever it is in twenty-four hours, then she'lI buy it. Usually, the effort of going back to the store is more trouble than it's worth, leading her to conclude that she really doesn't want it that badly after all.

Since my $6,000 bathroom makeover, 1 had continued to learn about the benefits-and pitfalls-of different renovations. 1 saw this myself during my open kinds house excursions. 1 was always going to open houses, even when 1 didn't have any money to spend, because the more 1 saw, easier ir was for me to assess a property's value. 1 saw apart menrs where the owners had sunk a ton of cash into up grading rhe master bedroom, but in the end, it didn't seem like they were gerting much of a return on their invesr mento Afrer a while, 1 was able to see that ífI did a $5,000 kirchen renovatíon on a $200,000 apartment, ir would look exactly like the $225,000 aparrmenr 1 had seen the day be

156

A Mimon Bucks by 30

Smells Like Team Spirit

fore. 1 was recognizing deals left and right, but, once again, 1 didn't have any cash to make a move. When 1 saw houses and apartments similar to mine, worth tens of thousands of <1011ars more than what 1 had re cently paid fo1' mine, 1 knew the market was changing or that 1 had a good deal. It ended up being both. 1 turned this way of accessing real estate into something 1 call the Corey Open House Formula (named as such beeause being an ego maniae like Donald Trump seems like an enjoyable pastime of the rieh). Corey Open House Formula Target a neighborhood or area where

like to invest.

Then go to every single open house in that neighborhood. You see the open houses of properties worth $50,000, and you see the ones worth $1 million. After about thirty to fifty open houses, you'lI have a solid and accurate grasp of the current market value of real estate in the area where you're considering

You'lI know what $90,000 buys you in

this neighborhood, and

know what $900,000 buys

you. And you keep going to open houses. You'lI eventually recognize that a place that needs only a new bathroom will be worth just as much as the one down the block listed for $75,000 more. Then when you find that great undervalued bargain, you smile a big,

grin. That's when you know

you are ready for a real-estate investment.

157

1 had deeided 1 wasn't going to borrow any more money 1 paid back my friends and family. But now 1 had an amazing opportunity with my new partner. So once again 1 needed to find sorne money to take advantage of the situa don, not to mention the rise in the real-estate market 1 was wirnessing at my open house exeursions. After seeing yet another apartment near mine priced very high, the time had come: 1 dedded 1 would seH my first real-estate purchase, my apartment. The value of it skyrocketed more than 1 expeeted, and the "transitíonal" aspeet of the neighborhood was now nonexistent. Myapart ment was now smack in the middle of the new "it" neigh borhood, and people were hot to move there. (Not to mention that my Real World house was ten blocks away on the fringe of this hot neighborhood, increasing in value along with it.) 1 figured 1 would seize the chane e ro seH my apartment, pay off my debts, and use whatever money was the next-door left over ro invest in another project handyman. A real-estate agent carne over and appraised my eon verted two-bedroom apartment for $185,000! My $99,600 apartment had almost dotlbled in value in a little over two years. 1 knew the value of the apartment had appredated, but to appreciate this mueh in sueh a short time was ex traordinary. J put ir on the market and sold it for less than my asking priee, but 1 wanted to move quickly case the zeal for my neighborhood quiekly waned. J still made plenty of money. 1 had realized a good profit and want to get too greedy by waitíng for an even higher priee.

158

Smells Like ream Spirit

A Million Bucks by 30

159

partnership enabled us ro each invest less capital, as well as decrease our individual risk, because by going in rogether

Plus, according ro the same agent, my other house had gone up in value close to $70,000 due ro its proximity ro this neighborhood.

on the deal, we'd be sharing ir. Everyone knows that knowledge is power. Especially in

After all was said and done, 1 walked away from che closing my apartment with a check for $80,000. Ir was rhe biggesc check 1 had ever seen, and, even better, it had my name on it. 1 rhen completely surprised my friends and famíly by paying off all my debts ro them (including the 10 percent interest) one year ahead of schedule. That was a huge relief, and it felt really good to give them their money

investing. Recognizing value is a key ingredient in having the power of knowledge. The Corey Open House Formula was my specific way of figutÍng out real-estate value on my own, rather than just going with what a real-estate agent rold me it was worth. lf yon can determine when ro hold, when to seU, and when ro buy anyrhing of value, you have better it made. Plus, the more knowledge you have,

back. 1 also figured rhar by doing so, rhey' d be willing ro lend me more money in the future-hopefully at a more fa vorable interesr rate.

your pOS1tl0n WIU be in any negotiation, so you can makc even more money off buying the bargains and seUing over valued assets. My approach was specific ro real estate, but a similar approach couId be applied ro buying cars, art, or whatever your niche interest may be,

AtAN COREY 101 Recognize your srrengths and weaknesses, and strengths and weaknesses of others. 1 knew my neighbor had excellent renovation skills because l'd seen his work. 1 also knew he was a lot betrer at ir than 1 was. Have 1 men tioned rhat I'm not really good at anyrhing? We shared a common interest in real estate and had similar ideas abour

Checking aceount:' $50,000·;,';;·····

401(k): $11.500

Mutual fund:: $5,150

whar made a neighborhood a smart place to invest our money. We were neighbors, after aH. Finding partoers is a great way to innease your resources, knowledge, and

Roth IRA: $6,000

.Equity on house: $71,000($47$,000 •••

.estlmated valae .... $404;0001ll0rtoa.,.)

He brought actual skills ro the table, and 1 brought money and a willingness ro leato, and in the end, we were far more effective than we would have been on our own. Our

'IOtal nel worth:$14',65(t

Perfect Pitch

161

store and two apartmems aboye ir. We figured we could ir for $200,000 and then dther rent it out or ownec, and they were ir. Ir was a foc sale $500,000 [or ir. We both knew rhar [or the shape the place was tag plus a $200,000 was way too much. A $500,000 renovarion budget was way beyond what we could pay, even thoullh we assumed we couId still make money in that

Chapter 18

Perfect Pitch ts on too. But high. Then

verge oJ collajm, Yes,

scenario. A similar fullv renovated building in the atea was we get close to selling for we that price range a full renovation.

probably be

one of us had enough moneyto embark on a $700,000 ect. We had to eirher find a rhird partner with a lar

location is

01' the owners to come down on the price- most we had to . .

inve.rtorJ ... Jomewhere. \Vou,~ tI this lamily doesn't tmtve out Joon, they cwtld die. T he floorJ are about to buckle! H ow long have !hey lived like this? Lets ¡¿et out 01 here! jesllJ H. Hardhat, Iha! place was dan(J{!Y()!L hut new Ir was in a prIme 10carÍon Red

me $10.000 ro bachelor party. Fat Matt, who my house, was about to get married, and 1 had to be there to

would be Brooklyn's next up-and-coming

The are a was still bnd of gritty, but ir was c10se ro the water, and the neighborhood had a lot of charm to ir. Both

out needed the owners to lower

of us thought it was ¡ust a matter of time befare the real es

ro 6nd us a third partner. As is

hOL lJt:Lau~t:

was in need of a major renovation, buying a decrepit place and fixing ir up ourselves, we make a lot of money. lt was a mixed-use building with a

The day atter we saw

Las Vegas tor a

the big step he was about to take. But in rhe back of my 1 couldn't thar property out of my head. Yes, it was but we were

to rip everything back to life. 1

the case with in New York City, 1 had to do both quickly.

estate

As everyone was arriving for the three-day debauchery I sat by the swimming pool making caUs. It was 1 like 1 was in a movie: 1 was twemy-six, pooIside at a Las Vegas

162

A Million Bucks by 30

business

on my ceH phone. AH 1 was missing was a martíni, a masseuse, and a nickel-plated re volver under a silk robe. It felt pretty cool, but it would only be really cool ifI could actually pull it off. 1 called the owners of the building and explained ro rhem the scary condition of their floors. They seemed ro know already, and 1 assumed that's why they were looking ro sell. 1 told them the property was probably worth ,000. Of course, 1 thought it was worth more, but 1 figured ir was worth a shot, especially if they weren't will ing to put the money into repairing the building. 1 was ex pecting them ro hang up the phone on me right there, they didn't. Like most homeowners, rhey had a cerrain at tachment ro rheir house (they had lived in ir for iorty years), and rhey wanted the next occupant ro be someone They didn't want rhe place ro be torn down or the original character of rhe building to change. (Theseprefer ences are usually shielded by a real-estate to prevent

Pariad Pitch

long-term girlfi:iend) and told her abollt what 1 was piece together. The only person she knew who terested was her father. 1 figured that would be a good base with to start before 1 1 had met her dad a few times, once at my party on Queer and he always me abollt real estate. 1 also knew he was a high-powered lawyer, so he probably had the capital 1 needed. It wasn't lost on me that if he became a third party in our partner could probably give us plenty of free legal too, which is never abad thing. 1 gave him a caH and p~o posed the deal to him complete with a pitch abollt the my neighbor's amazing work, and our the changes ahead for the neighborhood. He seemed somewhat interested and told me to follow up with him when 1 had some concrete numbers. 1 had a maybe; 1 definitely work with a maybe.

any deal from falling through, but this was for sale by the owner, and J them directly.) 1 told them the truth: We really our goal was to

Consider being a model at a school for hair styllsts to get

make ir beauriful

cuts for free. Obviously, you don't want to do anything crazy

$390,000, and orte!" pretty

with an of seemed to the news of my lowball They said they' d think it over and

back to me. 1 had ro find someone else who mighr be interested in in vesring in the proíect. 1 called my girlftiend (she sti11 being interested in me post-Queer Eye makeover and, thus, now a

163

Extreme Cheapskate Strategy

or complicated, but (a) these people aren't total morons and (b) they want to do a great and

!t's their "dass work,"

don't want to get a D plus. And you don't need a

haircut every month. It'5 okay to wait awhile.

164

Perfed Pitch

A Million Bucks by 30

Later that

the owners

the building calJed me back and gave me a counteroffer: They would sell it for $400,000. Lowballing had worked once again! (1 figured they míght come down a little bit, but a $100,000 príce cut was amazing.) I had no choice but to say yes and take the deaL We had an oral agreement on the phone, but doesn't mean mucho I had to finalíze the rest, figure out

165

in my checking account. I kept that Iast part to myse1f. I saw my golde n ticket, and I would just have to find a way to get $50,000. I had done it once befare, and I figured 1 couId find a way to pull it off one more time. If 1 were suc cessful, I would make $93,333! I had to find a way to get deal done.

how ir could done logistically, and an agreement in writing. This was too good to pass up. I caUed bade my girlfriend's father and pitched him the

AlAN COREY 101

scenario. As egual partners, the three of us would each ln

Be a deal maker. Always be on the lookout for a way to

vest $100,000. The building was partIy zoned as commer cíal, so the bank would reguire us to put down a 20 percent

make things work. 1 didn't want to pass on a property be cause it was priced too high; 1 wanted to pass on a property

deposito That meant $80,000 of our total $300,000 budget be used for our down payment. We'd spend the re maíning $220,000 on renovations, mortgage payments, and

because it was abad investment. 1 worked every possible it even more attractive to all parties in angle to

budget overnm~. estimated it would take six months to do all the work, and then we could rent it out for some monthly income or most likely seU the place for around $900,000. If our plan worked to perfection, we would each make a profit of around $93,333. (This is how the numbers fell out: purchase priee of $400,000 + $220,000 budget = $620,000. SeU for $900,000, leaving us with a $280,000 which we split three ways, giving us ,333 each.) Fortunately, the numbers Iooked good to my girl friend's father too, and he agreed ro join uso So my neighbor had $100,000 to put in the deal, our new partner had $100,000 ro put in the deal-but I had only the $50,000

owners into a $100,000 price cut. 1 was volved. I an enthusiastie pitchman to win over my girlfriend's father. If those two things didn't work out, I had other strategies. I was going to the owners if they were willing ro defer payment until after renovations (most Iikely a no, but I was running low on options). I could have maybe soId my two family house if the numbers worked or started lboking for a fourth partner. 1 was determined ro get this deal done. I saw the money that couId be made, and 1 wasn't going to let it slip by. The deal was coming together, which I made hap peno 1 just had to come up with my end of the bargain, an other $50,000. I

I couId rely on myself, as I was the

final piece to the puzzle.

166

A Million Bucks by 30

AGE TWENTY-SIX

Checkinl account: $52,500 Savings aecount: $0 Second, hidden savings aeCODnt: ,

$1 (1 didn't

check the amount for the New Year; I didn't want lo know.l

401(k): $13,500

Chapter 19

Mutual fund: $7,150

Home: A Loan

Roth IRA: $10,000 (At the time, $4,000 was

the maximum contribution for one year.) Equity on house: $71,000

gizJe "te enough to The profit my complete the deal on the neUJ b¡úlding. 1 can't sell the house, it's a cash cOUJ far me. ]esus l-l. Udder.r, this iJ one dairy COtl) ofmoney. Plus, l'd still need a j)lace to 1 could hit m)) friendr and familyagairt, maybe e1Jen otherfriends and family. But evert though 1knOUJ 1 would pay them back, it'II still stre.u me out. Maybe 1could a legit secondJob? Maybe 1 muld get a loan. Hmm . .. 1UJonder how loans UJork? Um, 1should get right on that. 1 figured fd start at my bank to try getting sorne money, so 1 scheduled an appointment with the loan coor dinator at my branch. 1 was pretty nervous, as 1 didn't know what to cxpect. 1 dressed nicely too, which 1 think is always a good idea when you're about to ask someone for money. (Okay, so 1 just combed my hair. But that's better than nothing.) 1 sat down with a guy wearing a tie, and 1 ex plained my situation to him. He lístened and was very en couraging about my entrepreneurial spirir. He explained that ifl indeed had the $71,000 in equiry in my house rhat

HMM, 1 muld

Total net worth: $154,150

A Million Bucks by 30

168

1 claimed 1 díd, 1 would qualify for ahorne equity lOan or a home equity line of

(HELOC) for the $50,000 I

needed. HELOCs work exactl y like a credí t card, except that you withdraw money from your account with checks. In my case, I would have a credit l¡mit of $50,000 and a stack of checks to write against that amount for whatever 1 wanted. month I would

a bill, and I would have ro pay ofl

my debt and the interest that came with it a litde bit at a time. A home equity loan is very similar, but instead of a credit line to draw from, 1 would get aH $50,000 up tront and then slowly pay it off each month along the interest I owed on it. I liked the freedom of being to write checks in diflerent amounts when necessary, so 1 went with the BELOe.

Home: A loan

wheel. It was earning me passive income in a major way and providing me with a place ro Uve. But cashing in on its eq was necessary if I wanted to complete the next deal. If mortgage pay things went sour, and 1 couldn't make ments, foreclosure would be inevitable. I had to analyze ex what 1 was risking. Was 1 willing ro risk most of what I had gained, a major portion of my net worth for this one new investment? After thinking it out, preparing myself for the worst, and doing sorne soul searching, I had myanswer. This deal wasn't for everyone, but it was for me. 1 had done my homework, and 1 knew this next deal would be prof itable. After thinking it all out, 1 was even more motivated ro keep moving forward on the deaL In my mind, the re ward would be worth all the effort, and I was okay with risk It wasn't a gamble, it was an educated risk. ing it

In essence, 1 was trading my equity for the loan. If I de faulted on the loan, the bank could seU my house to get the I owed it, in what 1S called a foreclosurc. On the other hand, if 1 made my loan payments on time and

Tip: Never, ever pay full price. Need a dress for a wedding? A suit for a new job? Head to one of those mega outlet malls

off the money 1 had borrowed, all the equitv was mme again. 1 wasn't to lose my so I made sure I wasn't going to default on theloan.

talking about), shop at discount retailers

Cashing in on equity can be a very risky move, and

Iike Marshalls, T. J. Maxx, Daffy's, Filene's

my backup plan was once again a not fDr everyone, worst-case scenario. If the bank did have to foreclose on my home, it would get the $50,000 that 1 owed plus aU extra equíty came with house. Envisioning this was

Basement, or Syms-and be sure to comb

to do; my

was a crucial cog in my millionaire

169

(don't pretend you don't know what I'm

the clearance racks. Just don't do what 1 did and brag about how cheap your clothes were while you're on a datel

A Million Bucks by 30

170

Home: A Loan

So 1 went forward with the HELOe. To complete process, 1 had to fill Out a few forms, verify my income, and my house appraised by the bank. (They weren't just my word on the value of ir.) A week later the appraiser was walking around my property, taking pictures and measurements, and getting a'tour of rhe place. He was impossiblc to read. 1 didn't know ¡fhe liked the place, ifhe was familiar the changes in rhe neighborhood, or if he to

was just baving abad day. 1 was nervous. carne in lower than T thought, 1 wouldn'r

the appraisal

time was tunning out before tOe own ers might find another buyer for tbeir property.

A few days later, 1 got a caH from tbe same banker in a tie, and he had great news. 1 bad gotten approved the HELOC! To add ro my good fortune, my house was appraised for an even higher value tban 1 anticipated: 10,000! (That meant a loan of more than $50,000 was available for me.) 1 met bim the next day, signed sorne pa pers, and 1 had access to $60,000 whenever 1 needed it. 1 complete the with my

ALAN COREY 101

wbat 1 wanted: finding $50,000. If you're motivated and confident enou,gh, you' II uncover ways to get wbat you want. 1 say this because 1 did it time and time again, eacb development 1 found a new solurion to essen getting money. The key was tbat every step ot the way, 1 made smart financial decisions, took calculated risks, and was able ro increase my overall assets. The end result was that eacb time 1 needed capital, 1 more to offer lenders than what l' d bad when 1 them before. It never burts to talk ro a

glad 1 found out, because it was tbe key ro getting tbe capi tal I needed for my nexr deal. By figuring out all of my op tions (and asking a lor of questions), 1 was able to

Borrowing money from

yOl! should aim to have the a bank is yet another reason highest credit score Yout rating may be a decisive factor in whether or not you get a loan you desper ately need, and it will certainly affect the interest rate you pay if yOl! are approved. Wharever yOl! do, whenever you borrow money, make sure that you will have the funds ro the payments on loan. Defaulting on a loan will cost you even more money and will land you in far worse shape than if you had never borrowed rhe money in the first place. Lastly, recognize the worst-case scenario that occur whenever you make a majot financial decision. 1 was taking a

a11 your options. 1 didn't even know tl1at you take out loans based on your home eqllity, but I' m

171

risk, and, admittedly, 1 was a bit zealous abollt

How this deal (especially after the poolside Vegas ever, 1 was mentall y prepared for an apocal yptíc two jobs and losing aH 1 had gained to get it do~e. This had the side effect of being a motivational tool, but it also helped me in understandíng rhe risks. If 1 was wiUing

172

A Million Bucks by 30

do that and still move forward, then 1 knew ir was the right choice.

ACiE TWEIITY·SIX AIID OIlE MONTH Cheeldng account: $53,500

Savings aceopnt: $0

Second, hidden savings account: $7 (1 didn't

cheek the amount for the lIew Yea..: I didn't

want te know.)

Chapter 20

Flipping Out

401(k): $14,100

Mutual fund: $7.150

DEMOUTION is the best stress reliever! 1

Roth IRA: $10,000

Equity on house: $50,000 ($510.000 value $400,000 mortgage - $60,000 HELOC $50,000)

TOtal net worth: $134,750

to take a sledge

hammer to a wall and just beat the hell out 01 it; 1 get to take a crowbar to a window; 1get to be completely sweaty andfilthy-all in the name 01 home improvement. 1 can't wait to do it again to morrow. But the dais done; time to go get a beer across the street. We demolished everything because we had too The previous owners had been extremely creative when it came to maximizing the space they hado 1 believe ten people had lived in a building odginally designcd to be two one-bedroom apartments and a store. The store itself had been con verted into extra bedrooms to help accommodate the number of residenrs. Beyond that, the problems were many. My new invest menr made the Munsters' house look like the Playboy Man sion. The stairs to the landing had no railing, and each step was a differenr height. As an added bonus, the enrire flight of stairs was covered with repugnant green linoleum. Puke was the only accurate way to describe its color. Every room

Flipping Out

A Million Bucks by 30

174

were marred by

In the end, we gave the building a brand-new life. Wc it to its original layout, and made it two one apartments and a srore. Our goal was to create a that would wow someone and that would stay seventy years or more. floors in each We oak beca use we unit, and even bought in bulk. to wall, which nor to rhe Ioads drywall, bur aIso Granite countertops, cusrom-built cabinets, and modero

decades of pooling water, maybe even urine. There were

of half-assed attempts at fixing a

roof: We fOllnd antigue aluminum beer signs nailed into random spots on the top Boor's ceilings. This technigue had clearly never sropped the leaks, i t just diverted the incom ing water ro a well-placed bucket. Awesome. In one of the bathrooms, we found a ten-inch hole in the shower wall that had rusted around the waterspout, and it looked like no

175

had ever been made to fix the prob

pocket doors in both apartments complered the Iuxurious feel we wanted rhe building ro have, and we installed and energy-saving tankless water heaters. The

down to warp them. A month of

1 wanted to ffiQve in myself. process of renovaring took about nine months we had estimated-and 1 spent ro Ir many wcekends was brutal, hard and ir job, but I knew that in the end ir would all ro everythi ng went according to plan, 1 might even guit my day jobo The projecr ended up draining us of the $220,000 in capital we'd pulled While we were frustrated by extra time actually benefited our three-month delay, renaissance we'd prcdicted was us, as value of rhe property jusr continued ro we could a

was pretty clear that this years. Every room I entered, I hit my head on the doorway, but in the middle of each room, I could stand IIp straíght. The slopes of the floor were Iike none I had ever seen. If I were a skateboarder, I would have been ecstatic: Th1s hOllse Bur I was not a skater, I was an We

r.t:>t"'Y'\ry"(f.o.L'~

out

the beams, and years in the attic and crawI spaces. A complete gut renovation. When we were done, it was a shell of a building a disaster zone once srood. We had no choice but ro

this wayit was the only safe way to renovate the place. ¡

176

A Million Bucks by 30

Flipping Out

177

ir out or seU it, we had an offer on the place tor $900,000.

Side, and, you know, $20 million estates in Miami Beach. The Coq::oran Group even brokered the Louisiana

A group of guys had swung by during renovations, the building, and wanted to jump on it before anyone

Purchase-okay, just kidding, but you get the idea. So was a certain amount of cachet involved with

could. The hardest part of selling a building is finding a buyer, and here we had one on Out doorstep midrenovation.

Corcoran represent out building, but on a practicallevel we also really necded an agcncy that could hook us up with someone who had $900,000 ready to spend. lt secmcd like

Betore we even decided whether we were going to rent

We to a $900,000 Quick and easy. My part ners and 1 celebrated and congratulated one another for a job well done. The victory, however, was short lived. The would-be :'>UiHlll}.{ and stalling, they never signed the paperwork. After six weeks of patiently

a pretty safe bet in that A slick, blond, power-suit-wearing Corcoran rep some how teleported into out rough-around-the-edgcs (if ,not

already received the offer we had been shooting for, we de to go ahead and sell the building instead of trying to

cozy) enclave of Brooklyn and checked out Out baby. a quick walk-through, she told us that shc thought she could seU it for $1.1 million. Say what? $1.1 million! We were skeptical, but she was confident, so we signed an ex to have clusive agreement with the agency and

rent it out. Other porential buyers would probably offer the same. Plus, we'd exhausted our budget and wanted to make our money back in one lump sum rather than in monthly

an open house that weekend. Once again, we were ecstatic, and we celebrated more beers at the bar across the street. $1.1 million! If we

installments. Things were tight; we wanted out money sooner rather than latero

got that, our payday would be $160,000 each! We figured it was a long shot that someone would offer that much, but

Operating under the principIe of"Hey, you never know if you don't try," we contacted the number-one real-estate firm in New York City, rhe Corcoran Group, to see if ir

it was still nice to think abour. Two days later we got a caH from the agent saying she

for them to get their act toRether we told them we had to move on. We couldn't waste any more time. Having

would be interested in selling the place for USo The Corco when it comes ran Group is about as serious as you can to New York City real estate. It represents all kinds of property, but its stable of offerings includes $8 million lofts in SoHo, $12 miUion penthouse apartments overlooking Central Park. $15 million townhouses on the U pperWest

an offer for $1 million. She told my partner (who was her main point person) that the interested party was a solid buyer-so much so that she wasn't even to l1st our building on the company's Web site. I'm certainly not one to tutn down a milIion dollars, but I was a líttle confused. What happened to the $ L 1 miUion that she was so confi we couId puU off? I told my partner to dig deeper.

178

A Million Bucks by 30

Flipping Out

Yeah, well, he did:

Web site. Doing so would buy us sorne time ro make a de eision, plus we knew that Megabucks Barbara had an extra $100,000 lying around if she really wanred the place. As it

"Yeah." "I found out who wants to buy our "Yeah?"

turned out,

did. She aecepted the counteroffer and was

ro close in ao aH cash deal. About a monrh later, we fioal1y closed on the Dlace. and

"It's Barbara Corearan." (This is approximately the in the conversarían where 1 shit my pants.)

three of us took home more than we

The agenr had explained rhat this was what she called a "unique" eircumsrance. This buyet wasn't jusr any buyer. Ir was her boss, the founder and CEO the Corearan Group,

when we first hatched our seheme. After sorne ing fecs and real-estate agent's fee, weeach walked away from the dcal wírh arouod $150,00()! In a final surreal the rhe closing, the front page rwist, on rhe day jJli:tllllCU

Ms. Barbara Corcoran herself. This person was known as "rhe female Donald Trump" unril she made a name for her-

New York Times real-estate seetion featured a full-blown color of Barbara Coreoran standing outside out renovated building (although, offieially, 1 guess ir was actu ally hers now). The accompanying article explained how Barbara considered the pul'chase a long-term invesrment for her personal investment portfolio, and thar she saw things on the horÍzon fol' the neíghbol'hood. And so

And a big name at rhar. Unique buyer indeed. One of the ríchest women in Ncw York wanted to our build mg tor ller own jJerJonat investment! After picking ourselves up off the floor, we were seratch ing aur heads. Why did multimillionaire real-estate diva Barbara Coreoran wanr ro buy our building here in gri tty Red Hook? Díd she know something we dido't koow? Should we keep it and not seU? Díd she know that

than ayear ago? And why was Barbara's offer only $l million? UUUbllL

179

ir for only $400,000

AlAN COREY 101

my partncr serving as the faee of our enrerprise, 1 being slightly removed from the negotia tions, which also enabled me ro be a litde more objecrive

Trust yout own knowledge, as you could be just as good as or better than the cxperts in one area, like finding the

the wholc thing. (He was, understandably, freaking out.) 1 convinced him we should eounreroffer with out planned askíng price of $1.1 million, reasoning

next grcat location. But you should also l'ecognize when the expel'ts do indeed know more than you do in another area,

hadn't even been posted on Corcoran's traffic-heavy

was a

such as in prícing and selling your home. My pal'tners and I had been right all along.

_-1

We could have settled with a handshake

seasooed veterao, Barbara Corcorao, a star io the tield of tiodiog the oext hot oeighborhood, aod was

agreement wlth the original , uofortunately, verbal commitments doo't make for a solid deal closer. We could

that my twenty-six-year-old iostiocts were right. (OMG! 1 might havea Wehad of a shift exactly ooe year before she spotted

have gotten in trouble if we had waited for this stalliog group of investors. We made sute from rhar poiot

U"A.aLl,~'-

181

Flipping Out

A Million Bucks by 30

180

without aoy deal io writiog, we weren't goiog to proceed with celebratioos, no matter how much we allliked beer.

of that, we protited haodsomely. (From less.) Out ooly miscalculation aod admitted weak

oess, it seemed, was that we dido't koow as much as the pros as far as selliog priee. IdeotifY the leaders io your iodustry aod try to get

Checking acc_nt: $153,500

them iovolved with your projects. Why not approach the

Savlngs account: $0

best people out there? The wotst they can say is oo. The Corcorao Group a history of

Second, hidden savlngs accoun.: $1

ours, had a lot of exposure in the tristate arca, aod boasted a Rolodex of platioum contacts. Yes, we had to the

Mutual fund: $9,000 (stocks rose ¡nvalue)

agency a small cut, but it sold out building for $200,000

Equity on house: $110,000 (paN offmy

more than we would have. Out strategy for flipping prop

HELOC: $510.000 value - $400,000 mortgage)

erty brought us big payouts. As hard as it is, it's important to keep YOut emotions out of aoy kind of negotiatioo. To say we were ecstatic

Total net worth: $302,300

about Barbara Corcoran's initial bid

AGE TWENTY-SIX AND NINE MONTHS

401(k): $19.::'00 Roth IRA: $10.500 (stocks ..':-se in valpe)

our building is a

huge understatement, but if we had gotten the excitement, we oever would have seeo

away io $1.1 million

cash deaL Wheo we looked at the seose to hod out to assume that Barbara

that

it other buyers mighr offer us and cough up the cash if she was

serious. Like a tme pro, she was lowballing us, bur if she could negotiate, we could negotiate righr back. AIso, it's importaor to remember rhar no deal is tinalized

¡ .1

Chapter 21

Silent, but Deadly Profitable OKAY, that worked out! You guys up for another one? Let'J start hitting Jome open hOltJes and see

the next million-dottar

hztitding is. What, you want to add a fourth partner? Are you Jure? Okay, he'tt hetp with

renovatio1JJ and make the ftip go a

quicker? Can't argue with that. And he atready

huilding? Well, it all Jounds good to me!

This project was so successful for the three of us, we were excited to keep rolling along with the plan to f1ip an other property together. By this time, 1 had broken up with my girlfriend (okay, 1 got dumped), but of course her dad still liked to make money. (Plus, 1 was very friendly her whole family.) We three partners decided we had to do it again. But now it was pretty clear that we couldn't do it in the same neighborhood of Red Hook, Brooklyn. press, not to mentíon the presence of Barbara, made estate values skyrocket in the area. Conveniently, a person we had hired to help us renovate our last building ap

-i

186

proached one waoted to

187

Silent, but Deadly Profitable

A Million Bucks by 30

my partners about working

uso He

ship in this renovation, instead of the usual egual cut,

a fourth partner in our next

aod, to

was now 25 percent each for the four of uso 1

sweeten the ofter, he

building that

back and not do any work. 1 would

make us some money. He had set his sirrhts

a neighborhood that bordered

the one where 1'd bought my hrst apartment.

old

ncighborhood of Clinton Hill, Brooklyo, was as

as ever, and its adjacent areas were now transltlOning at a rapid there were buildings under

pace. Everywhere you

less money to get thedeal done, and then rd In return, I'd

be a silent partner.

a smaller cut of the deal after we soId the

property. The deal definitely worked best seemed to work for everyone

me, and it

too.

months later, with the help of the same slick estate agent at the Corearan Group, we so Id our

going renovatíon, new restaurants, and new stores. We knew

renovated building to one of director Spike Lee's right

the synergy of aU the changes and investments would

hand men for $1.3 million! The result was another

a Dlg impact,

$200,000 inerease from the profit we initially projected.

if we were

a building that

Out underestimating our potential was becoming a trend.

was freshly With (man, 1 agood

help of the Corey Open 1Iouse Formula name of that). we verified that his find was It was á two-family brownstone about the same

size as the mixed-use building we had just soldo It was

The best part was that 1 made $76,500 on the de al for oot anything! 1 now had the best rea11y do get richer. 1 liked

ever! It seemed the being on that side of

the eguaríon. It made the finish line even closer.

within fifteen blocks ofmy current house, the market value

After celebrating the New Year, along with my twenty

which waS continuing to soar. The "it" neighborhood

seventh birthday, I looked over my finances. 1'0 be sure, but 1 took some

had officially made aU the surrounding areas equally hoto

things were going

However, this new place we were looking at also needed a

ungodly amount oi' taxes on the selling of a huilding. 1

gut renovation, and ir had an asking price of $650,000. We

wondered what

saw the same potential in this property, estimating tnat we

destination.

put in another $200,000 in renovations and

it for

sti11 need to reach my míllion-dollar

This was the overall

1 had recently celehrated

my tourth anniversary at the day job, and had gotten my

around $1,1 Surpríse: 1 didn't have a11

hits paying an

capital to do the fuIl deal

bonus and a raise to $52,000. 1 wasn't paying any and 1

once again. Bur this time, it was because 1 was invesring in

rent because 1 was still living for

other projects too, not because 1 didn't actually have any

was earning the rental income from it. Around that time,

money. My solution was to sign on for a 17 percent

a nearby building the same size as my house sold for

188

Silent. but Deadly Profitable

A Mimon Bucks by 30

Wirh three years left ro reach my goal, my current

$799,000, which (and my equity, as 1

the market value of my property paid only right with ir. FinaJly, the strategy of investing in run-down prop erties in up-and-coming neighborhoods and bringing them

breakdown was;

AGE TWI'!NTY·SEVEN

back to life turned all of our lives upside down. We were making a lot oI' money and iairly quickly. This all meant rhat 1 was !!ettit1!1 much, rnuch doser to a rniUion dollars.

Checking .ac:c:ount= $245,000

Savings aceou.ti: $0.

Seéond, hidden Savlngsaceou..t: $1

401(k): $24,100

Mutualfund: $14,150

AlAN COREY 101

Roth IRA: $14,500

Etluityo.. ho~se=$375,000($n$~óoc)new

It doesn't hurt to playa minority

189

market value ... $40Ó,OOO ...ij*'ttil•.~t~,$O

in a dea!. I

have loved to have been a percent equal partner, but the timing of the deal wasn't working out perfectly. Rather

HELOC[loan pald off]

=$i15(Ofof

nrtal net worth: $6n.750

saying no outright, I offered a reduced cut with a reduced role in the next Hip. Ir paid off, as for basi cally no effort, I made over $75,OOO! 1 didn't have any in the type the and so that went into the house, but I had other things to worry abollt. And it wa.<; in al! ofmy panners' best interest to do the best they could do, a.<; their money was tilll y i nvested in the project too. They had my full trust, and it played out per fectly. Let's not f()rget the benefits of addíng a tounh panner. He created his own worth by providing a great property he'd found. And he added labor to the deaL which re sulted in a sale of the by a month. He his ()wn opportunity and we benefited from it.

~.i

Bar Tender

191

of ta1king myself out of purchasing an iFoci by saying, "They'll come out with a better one next year." me at way I saw it, any of those purchases wou1d just my job 10nger, because they' d be a step backward on my parh to being a millionaire. However, I did reward myself, a1beit in a nerdy way: 1 refinanced my mortgage. Interest rates were at an aH-time 10w, and 1 wanted to

Chapter 22

Bar Tender

take advantage of that. 1 got a new loan at an interest rate 2 percent lower than rhe rate on my one. It cost me

to do. What am 1 saying? l'm not a millionaire yet-I need to

$10,000 to refinance my mortgage after loan fees, appraisal fees, and other miscellaneous expenses, but my new thirty year mortgage was saving me an extra $1,000 a 1'd make up that expense in than ayear. Over

earning as much as possihle until 1 amo Plus,. it's nice getting full

a11, this was much better than a flat-screen TV. Plus, the re

15 it time to q¡,út my joh? 1 guen 1 don't

anymore.

why?

lt hasn't gotten in the way ofmy accompliJhing the things 1 wanted

it a little easier to get

duction in my monrh1y mortgage allowed me to make

a mortgage. l'm definítely sick ofanswering phOtles all day, hut ¡he

sorne much-needed changes at home too. After a few years of Real World insanity, 1 changed my

imurance. And a steady joh

joh has helped me when times were tough, and 1

to make s¡.¡re 1

seven-bedroom singlc-fami1y house back into a two-fami1y. It once again became its originally intended layout: one three hedrooms and another uni t of three hedrooms

have a good floting Jomewhere. 1t:! too had no one calls just to CU • • CM'"

anymore.

were the good old days. Ah yes, day one.

Pretty much everyone thought 1 waS completely insane to keep my day job, but 1 decided 1 would stay until 1 reached my goal of being a míllionaire by thírty. Old

my office-cum-hedroom. Sure, it meant a little less rental income, but ir also meant headaches. 1 didn't

die hard. 1 remained thrifty and 1 didn't go out and reward

have to worry about individual roommate sguabbles, col

~nyself with a big-ticket ítem like a p1asma-screen TV or a

lecting six separare rent checks, and fit in with all the personalities living in my

new wardrobe, like a lot of peop1e who had $245,000 in thefr checking account would have done. 1 continued

Instead, the tenants in the other half of the house would be responsible for finding their own roommates, resolving their

same TV l'd had since eighth grade, and 1 didn't even one new 1 even remained committed ro my an-

own sguabbles, and providing me with one rent

192

Bar Tender

A Million Bucks by 30

193

if 1 were ro

just have ro worry abollt myself and the three room mates in my half of the house. Ir reduced the workload on my shoulders, for sure, and I was willíng to take a $200 Cut

much everything 1 would ever want in a to drink one myself: a

in remal income in order ro reduce the stress in my life.

norm ro take a The tmth was, 1 had always wanted ro open a bar, and I

I also spem about $25,000 renovating the backyard, the basement, and my from stoop. While it was a chunk change, aH of the improvements would make the building comparable ro another house on the block that was for $800,000. I was sitting pretty, fioancially speakiog, but 1 waso't ready ro be roo conservative just yet. I was young HJUKllU! to lnake gaios; as important, I waoted ro have sorne more fuo. I was

rhinking about the bar across the street from

my former building in Red Hook. My partners and I used to head there after workiog hard all day OH the renovation. Beer had never tasted so good. Every time we walked io, rhe owner was sitting alone behiod the bar, aod he was always extremely grateful we were there. Ir seemed like business

wirh new friends,

01'

somewhcre eclectic

out of the

knew the owner was frustrated by his laek ofbusiness. (We ro know h1m pretty well because we were there.) You'll rcmember thar eventually 1 also knew that Barbara Corearan was eyeing the neighborhood as ooe of the next big things, and 1 figured ir was only a matter time unril a media and development blitz went kept rhar bit of informatíon ro myself, and I asked owner if he was interested in selling the bar. He didn't take long to respond, saying he wouldn't the place go for anything less than $100,000. My numbel's showed it was probably worth that. 1 bought it for 1'his was the "other projeet" I was working on, aod the rea son why 1 had to take the minority role in the last fIio we did.

was always slow. I, for ooe, couldo't undcrstaod it. From the first time I saw the bar, 1 knew it was a l)!aee 1 was going to in love with fasto Ir refleered rhe feel of the

Tip: If real estate doesn't interest you,

hood and was just overrun with rustie eharm. The bar was with oId-sehool imimare brown vinyl booths, but it was also perfect for large, boisterous of friends. Blaek-and-white photos hung on the walls with no 01' reason, a

stocks. There are plenty of Web sites

yoll can educate yourself online about thaf break down and explain stocks; the Motley Fool (www.fool.com). CNN~ Money (www.money.com). and Morn ingstar (www.morningstar.com) are great

unique feel ro the space. Mismatched antique lamps with

places to start. These are, in fact, among

shades hung above the bar, rounding out unpretentious anyone-is-welcome atmosphere. It was pretty

the places where 1taught myself.

194

A Mimon Bucks by 30

Bar Tender

195

a partner to go in on the bar me, a friend with nor as much capital as me, but who was a culinary

garden and people sat in rhe backyard unril sundown. A block away, on rhe waterfront, you

We agreed that I'd put in more money up front. and tum rhe place into a bar/restaurant that he oversee on a day-ro-day basis. We both were from the

could see rhe fireworks in Manhattan and a docked Qtteen Mary 2 ocean linero (A new commercíal port had opened something 1 also knew was in the works, thanks ro read a few news reporrs about it.) After the fireworks show, everyone carne back and continued hanging out. Ayear be fore, the same bar sat empty with just me and my partners

South, so we opted for a menu of our favorire food: South etn barbecue.

1 wanted to

everything that illlUa.l1 attracted me ro rhe in rhe first place as it was. And we did. However, 1 also wanted to emphasize our new barbecue menu and mix in a little down-home Southetn flair to the charm the already hado 1 decorated a

wiping our faces after a three-day weekend of renovating. In just one year, business had increased drastically, profits were on the rise, and we haven't 100ked back since. (Plus, now 1 have a Dlace ro eat and drink for free whenever 1

using my collection of license plates and placed the benches on the sidewalk out front. To the back room rhar had a pool

want.) lronically, as 1 continued ro get press for the different

we added a TV to appease the local sports nuts. We fas tened an old-fashioned flashing neo n Bar-B-Q sign aboye the door, the place screamed cü/:y barbecue shack. We

projects 1 was involved in, people around the office at my day job started asking me how 1 managed ro DUU ir off. upper management was coming to me and aSK1l1g my advice about personal finance. Whenever 1 explained my

even changed the name from Pioneer Bar (it was on the cor ner of Pioneer Street, after a11) to Pioneer Bar-B-Q.

nandal game plan to them, my story of pinching pennies bored them ro death. They wanted some rrick. Some secreto not exciting or a11 that complicated, I'd say, but it is

By keeping all the signage and decorations put up the last owner, we didn't alienate the existing clientele, and 10cals still carne around. After some positive wrire-ups in a few newspapers, people were traveling ro our

what worked for me. There had to be a reason tbese were coming to me for advice. 1 could only assume that 1 was financially better off rban some of tbem. Or ar least ber

rhe-wall restaurant from aH five boroughs. Thanks ro sorne insider knowledge, plus some personal rouches and hard work, business changed dramatícally with jusr a Dunor Lll<l.lll:'.D ro rhe restaurant. Out besr day ro was on a recent Fourrh of

rer prepared for my future. Probably a bit of borb.

Bar Tender

A Million Bucks by 30

196

AlAN COREY 101 ACle TWENTY-SIEVEN AND FIVE MONTHS·

Similar to my Billfüld Blowouts, 1 sti11 found ways to

Checking account: $180.000

myself without hurting my overall goal. 1 spent $10,000 to refinance my mortgage, but the expense saved

Savings _eoam: $0

me $1,000 u month in the long term. 1 spent $25,000 in

Seeond.hidden saving5 aceollm; $?

renovatíons, but that move

401(k): $28.900

the value of my home.

And, finaIly, 1 was in a position to follow a

Mutual tund: $16.475

of mine,

Roth IRA: $15.800

1 mude the reward of owning a bar and restaurant work

Eqlllty on hOllse: $400,000

in my favor financially, because ir wasn't just a toy, it was a business investment. (Even if 1 never made a dime on place, 1 could always

it for at least

our minar ehaRges)

1 had paid

for ir.) 1 was rewarding myself without

'lbta. networth: $691.175

aH 1

had gained. Free beer makes for a great reward, no doubt ir. If you aren't happy, yOll won't remaln on target to reach your goals. You have to accept the sacrifices yon in them. 1

see the

dropped out of college to

open up a bar, because it was something 1 always wanted to When 1 told my mom my plan back then, she cried for two weeks. So 1 decided to graduate from college first (wise and then told myself rd pursue it at a Iater date at a time that wouldn't bring my mother to tears). 1 knew 1 would, 1 just didn'r know when. 1 recog nized the frustrated bar owner was the pathway to adüev that

Plus, it didn't hurt having sorne insider

knowledge ro sweeten the deal. 1 knew 1 would up the chance

pass

and so 1 seized the opportunity.

;

197

Boomtown, USA

199

economy after 2001 meant that interest rates ot all kinds, induding mortgage rates, were continually being cut. Over the next five years, every few months new record lows .in rates were being created by the feds. They wanted actually needed-citizens to borrow large portions of money and spend it in order to help restart the economy. best way ro do that was ro make it cheap ro borrow Chapter 23

Boomtown, USA

money. And their plan worked. These record lows in mort interest rates meant more people could now afford ro huya house. And buy houses they did. It ereated a frenzied demand to purehase ahorne, resulting in the priees for

JESUS ll. Mortgage, the house down the street just sold $900,000! Didn't th<~t guy buy that hoz/se for $750,000 las! Daron! And look, this houJe for Jale in the jJaper JhoUJs square jóotage is halJ the size of roy h01.ise, and it'J Jetling, for $900,000! Things are out ofcontrol! I've golta find out UJhat roy houJe ÍJ UJorth. Over the next seven months, 1 got extremely lucky. The surgíng real-estate market kept soaring, and the value of my biggest investment, my house, went up right along with it. This booming real-estate market was happening aH across the United States, not just in New York City. Every one was making out higo 1 was able ro bendit from what was truly an exceptional circumstance that no one realIy had expected-record lows in interest rates meant skyrock eting home prices. 1 was in a position to win big just be cause 1 was a homeowner. To explain ful1y, the poor performance of the nation's

homes going way, way up. In New York City, it wasn't unheard of tor property to double in value in less than ayear. It was aetually the norm. Many stories in the papers rold of people selling their homes and taking early ret1rement beeause of the newfound treasure of equity they had in their homes. For instance, during this time 1 saw the value of my house go up $187,000 in less than ayear! JUSt for doing nothing. 1 was merely a homeowner in an exploding real-estate market.

200

A Million Bucks by 30

Boomtown, USA

201

different levels of risk too. Bonds are the

real as fasto Now as the market went back down estate market was having che same sort of success. And 1 benefited handsomely, just because 1 accidentally happened

safest, stocks are riskier (but higher risk

to be involved in the hot market at the time.

Tip: Different investment options have

usually means a chance at a higher re turn), and within stocks, sorne are riskier

ALAN COREY 101

than others-for example, international or emerging market stocks tend to carry a higher risk than domestic ones. In the same way, buying a mutual fund or ex

You can't predict markets. So-called experts try and no one is 100 percent correcto The best

change-traded fund (a portfolio of many

is investing heavily and often in many different markets.

different stocks) protects you more than

That way, if one market takes off, you are in a position to benefit. The thing to remember is that all this carne because 1 had invested heavily and often in the real-estate market. The stock stock market seen another huge boom, and 1 would market cauld have ¡""",nphrp,-j Roeh IRA, and mutual

buying individual stock s, beca use jf one stock tanks in your mutual fund, the oth ers will help buffer the loss and may even help make up for ¡t. If your individual stock goes down the tubes, you've got no safety net, and a lot less money.

definitely

my million-dollars-by-thirty Bur it wasn't something 1 had on.lt's tam to understand that in markets of any kind, extreme swings like this can occur. Up and down. 'fhe stock market in the had record unforeseen

fund investments. On other hand, my money was disrributed, so if one market had an extreme penny 1 hado 1 wouldn't have 10st every an investment portfolio of different markets meant that 1 had opportunities to take advantage of these freak occurrences. Plus, with the resurgence of all the investing,

dor-com boom. Likewise, ir had a big downfall afrer the dot

the economy improved, increasing the value of my stocks. Basically, if 1 hadn't created this balanced situarían for "lucky." myself, chen 1 never would have been able to

com bubble burst. Ir wasrú unheard of that those in a good stock position could see their money double overnight.

has the your eggs in one basket, or one Putting potential to make you extremely lucky or extremely un

However, many of these same people saw the reverse

1 was fine just being lucky.

202

A Million Bucks by 30

AGE TWENTY·EIGHT

Checking account: $8,000 Savings acc:ount: $172,000 Second, hidden savings account: $1 401(k): $35,250 Mutual fund: $17,750 Roth IRA: $15,800

Chapter 24

Equity on house: $587,000 ($985,000 new

Declaration of Independence

estimated value - $398,000 mortgage) Equity on bar and restaurant: $60,000 'l'Uta1 net worth: $895,800

1'M

1'm finally rich. 1 have reached all my Jubgotlls way to being a milliontúre by thirty ha/N JUJt. a ?/Z01"e to go. a wailing game now. ljl jliJt !JoU on lo 1ftYJob jor another year or JO, l'II it. lj the Jtock rtttlrket or real eJtate market goeJ 1Ip, l'¡¡ make it in even leH Ihan Jix ?/ZonthJ. 1 there! can't belie1Je it! close to At the age of rwenty-eight, 1 was getting 1 was way

of schedule. 1 continued in-

in all my stocks and keeping an on the real-estate market in New York City. For the first time in

years, J felt like 1 could cut back on my extreme

saving and enjoy life a linle bit. 1 went out more, because for once, 1 could be the person buying drinks at bar. (Although this was done only on special occasions, as 1 was still a cheapskate at heart.) 1 went on several vacations world, crossing off items on my life's othef' This was costinJ.': me a lot on my twelve-more-months

A Miman Bucks by 30

204

Declaration of Independence

on-the-day-job-till-J'm-a-millionaire plan, but I needed ro take a break and enjoy life a bit. If 1 hadn't benefited from the uoique and benefjcial

205

more ro

1 make this year (after investing my entire years. The best

salary) to be a mi11ionaíre by thítty! 1 knew 1 could

condition of rhe real-estate matket, I still would have had

year; just iovestiog the huge chunk of money io

ro my net worth

my savings account into a mutual fund with a better tate of

those vaca-

return would do wonders. I felt that with patience and a

out, I had gained $187,000

few minor changes, 1 could get this millionaire goal done

JU.uuu

have

to be a tions on

In an untoreseen occurrence and now had a litde over

sooner rather than latero Given a11 I had

$100,000 to go. 1 had no expenses, so my salaty of around

the knowledge I had

5,000 was beiog invested in its entirety, and J was sti11

aLLvmp'

Q"ather'ecL

give, I feIt 1 ShOllld

'<:;:>:>"11:>

I Iearned along the way

making money on the rental units in my house. Honestly,

them ro good use. Surely someone couId benefit

l'm not sure what J would bave done over the next two

my experiences. 1 sti11 wasn't a financial expert, sti11

years if the real estate mark:et didn't

like ir

no defined ski11s, yet I was really close ro achieving a

Maybe I would have done anorher house fliD. mavbe more

huge financial milestone in a short amount of time. I thought a personal finance baok would really help other

only Dile more salid investment to

people, as 1 was jllst a regular mllmbling loe with no ptevi

being a millionaire by the age of thirty, my amI I would have madc it cven without tbe "Iuckiness" fac

ous knowledge of investing, just a mission to

tor of the soaring real-estate market. Jt heIped me get

accomplish the same. I thought getting a book published

didn't see why anyone

c1oser, but I wasn't there jllst yet. my want ro

couldn't follow in my steps and

my new subgoal if 1 did end up a bit short on

AU this didn't sto/) me from c10sely accollnt. 1 was so

rich. I

status. A few years before, 1 had created a personal Web site

millionaire status was within

wonderfully named alancorey.com. (1 knew better than to

at the age ot twenty-cight. I had only a little bit more

caU it bigal.com.) My site was my personal marketing tool

to go, and it was time to check my hielden bank account ro

for whatever project I was working on at rhe time. Ir con

see exactly just how much 1 still needed.

sisted mainly of a few photos, sorne

what 1 had

After heading crosstowll, 1 found out that I had $29,200 in my hielden bank account! That was a great present to myself; a reward for living below my means for the last few

contact information, and, thus, rarely

1 U¡JUi:1lt:U

my press updated last line in my short

to say, "Alan is currently at work on a book

206

Declaration of Independence

A Million Bucks by 30

about investing in your twenties." Which was on more motivational to me ptoject. By writing it

crealeu

a visual

at me every time 1

my !!oaL ane! 1 saw it went to my

one

207

was onlíne reading about how Barbara Corearan bought my 111

Brooklyn. Curbed, a major New York real

estate blog, had written about it and had a link to my Web site, specifically to my bio The big-time editor saw in my bio that 1 was "currently

site.

and 1 told them 01 my me A idea. 1 hadn't actually written anything down yet, but 1 was

at work on a book about investing in your twentÍes.

boul1cing around the concept in my head and trying to fig

ing power of tbe

ure out how to get a book deal. líere 1 was, twenty-eight,

looking for a

crazy (or na'lve) enough to set a new large, looming subgoal

ket for it. 1 tole! her

as chance would have it (or. more likelv. thtow!h the amaz was saw a mar course 1 was, without revealing that

of getting published just in case the right opportunity carne along. 1 knew a book

papel' yet. She told me to she' el sce what she could

was a long shot,

up aod clown! J couldn't stop thinking

the life experiences I had built over the

be the final piece to my puzzle. But 1 didn't have a book proposal. J barcly knew what one was. J wrote one as

fast as I eauld, stealing a layout from the example in one of my books. 1 had no real outline or overall concept; it was

1 figured 1 had a unique hook, similar to the creative ap

really just words on papero 1 just wanted to get somcthing

rv 1 was so close

to being a millionaire beforc thirty, and 1 did it without a

in her hands before she abont me. A month latet. 1 sent her rny thirty-pagc nt"r.tVW' it was a mess.

huge income. IfI col1ld do it, anyonc could. Who wouldn't

I was

want to rcad aboLlt that? My story was unique but applica

proaches 1 had llsed to

011

reality

to write to

ble to others. So 1 rcsorted to doing what 1 always do. 1 bought several books on the subject

me refine it and make it

I was happy with that and thankf111 that she

And as 1 started rny

say, "Get lost." She introduccd me to an agent

1 had when 1

she thought higbly of, and wc had sorne mcctings over the my "how to write a book"

phonc. He gavc me sorne pointcrs and sorne basic guid('

an editor from a major publishing house in New York

lines. It took me another thtee rnonrbs to rewri te ti\(' pió'

As I was at home

208

posal,

A Million Bucks by 30

once I was finished, 1 sent ir to him. If rhis went

perfectly, he would fall in lave with my proposal, sell it guickly, and 1'd be a millionaire by twenty-eight. Well, hated it as well. (Well, maybe not hated it, but he said it definitely was not ready for prime time and needed work.) But he didn't say "Get lost" either. Instead referred me ro a freelance editor he thought highly of to help me write a. new proposal. I was frustrated but holding on to hopeo Mainly, I saw rhar I was workíng my way down the totem poleo I with a majar publishing was pushed down to an agent, and then was pu:;ucu clown to a freelance editor. I had to fincl a way to work my self back up to the topo Another four months passed as I worked with the edi tor on getting a decent proposal put together. 1 really her, and from my previous experience with worldng with people, I knew a great partner when 1 saw one. was every penny. By the time 1 finished working with

Declaration of Independence

209

it to other publishing in the project and said he' d houses. He told me it would take probably about three months before 1 heard anything, and not to my up. Not very encoutaging, but ir was aH 1 hado 1 crossed my fingers. Thankfully, 1 eventually got sorne good news. A líshing house even bigger than the one that had originally contacted me wanted to publish it. Despite my new, less frugal lifestyle, the book advance it offered was indeed to push me over the threshold to millionaire status. 1 had accomplished two

at the same time: 1

a book

deal and became a millionaire before thírty on the same Even more rewarding, 1 had done it a month shy of my twenty-ninth birthday. Instantly, 1 guít the day jobo (Yes, 1 gave two weeks' no tice. 1 may a millionaire, but 1'm still not anasshole.) 1 then threw an awesome "retirement" party at my bar to celebrate both my book deal and leaving my day jobo Re that if 1 want to be bored, tellíng the tirement is

her, I had another version of my book proposal to try to pitch. 1 brought it back to the agent, and he liked ir. Relie/ that was left now was to ir back to rhe editor from

now on my terms! And then, probably like most people hangover.I do, 1 began my retirement nursing a

the publishing house who had origínaHy contacted me, to see if Jhe liked it. 1 was getting excited. My finish line was

wouldn't have wanted it any other way. Now at twcnty-nine, I am in a position to no longer

in sight. When 1 went to send ir to her, I encountered anorher In the year obstacle: The editor no longer workecl

have another boss again. 1 am financially comfortable, with

that had passed, she had switched jobs. 1 had 10st my main contact to the publishing world. Luckily she was ríght, and the agent

had referred me to was tOD notch. He believed

multiple income sources, and I'm free to do a5 1 please. My penny-pinching ways may have caused me ro miss out on many parties ancl bar-hopping experiences and unnecessary shopping trips when I first moved to New York. But payoff is that now 1 can go out any time of day and night

210

Dedaration of Independence

A Million Bucks by 30

and nor have to work forty hours a week. It's nor rhar ro have a day job--as yon know, 1 had one fi.)t

years. Sur

AGE TWEnfTY.NlnfE

now 1 don't miss any more fun events, because l'm a

Cheddng ac;count: $40,000

lionaire before thirty! On the other hand, 1 sti1l live in a

Savlngs account:· $182,750 Second, hidden savings account=. $29,200

windowless office, sti1l have the same old TV, still have no

401(k): $42,700

talents, and am sri11 a bit scared of rhe sexo Money doesrú change everything. Evíl genius, rock

Mutual fund:$23,Ooo

star, comedian-none of thar worked out for me. But being

80th IRA:$20,3S0

a millionaire befare thirtv did. Now ir's your tum!

~q~ity

onhouse: $587,000 Equity on bar and restaurant: $75,000

Total net worth: $1 mU'ion!

ALAN COREY 101 I can do ir, yOll can do ir.

FOCLlS

on your

and

once yon reach ir, ir will aU be worth it. Therc are several ways ro be a millionaire. This was my way. 1 couldn't com conrrol my income, but 1 oLltcome. 1 did it in

sure to control my most expensive city in America;

you can do ir in your clry too. Take the poinrs that work for yon, educate yourself on whar yon don't understand, aoe!

put a plan into action. There's a million dollars wairing you at the end. Enjoy it! (And when yon get there, sene! me a thank-YOLl cardo The ones that come with money.) For rhe record, tbe first thing 1 bought with my advance was a brand-new iPod. 1 sti11 belicve it was worth tbe waít. Now 1 the damn thing.

ro figure out how to put

211

Acknowledgments

213

and Dad, thanks for beíng great teachers. Al Hawkins, thanks tor marrving Jitl. Jill, thanks for marrying like ro thank the entire Leonard for their 1 years. You generosity, support, and guys make friends and partners. tor being so great. Katie, your family is a bottomless soup of pleasure. (That's a good A big part ofmy success belongs to FarreHs. Thanks for being excellent neighbors and being a big part of my New York 1 couldn't have done it withoút you. Handshakes and smiles to staff of Pioneer Bar-B-Q; although the bar has been sold and changed, vour hard work fives to Matt Hake and Phil appreciated. was LLHU¿;.j

Acnowl egements

like to acknowledge that I misspelled acknowledg ments. (I pay my editor by the page.) 1 would like to send one thousand thank-yous to every one who believed in this book from day one. Ir would not have been possíblc without the encollragement of my agent, Barret "Barry" Nevílle, the editing ofMartha "Mimi" O'Con nor, and the foresight of Michelle "Foresight Eyes" Many thanks also ro Christina Duff}r at Random HOllse. If you didn't believe in this book, 1 would not have been able ro teH the world 1 got Miss Universe's phone number. My extended gratitude goes ro Sadia Perveen, Roy "Buddy" Kite, and Roger Hailes for their input on the book. You helped make this happen. 1 would like i t to be known that 1 would not have been able ro be a millionaire by thirty without the help of many people. Ir took a team: Much appreciation to my tamily for sllpporting me in everything I do (well, 95 percent of everything 1 do). Mom

Jean; you two guys are the only moneylenders I've ever seen wearing a girl's bathing suit. Financia] shout-out ro Jeff . Palmiotti; thanks fOl; buying into all my sehemes. Many praises ro Andrew Wright for booking "The Seagulls" a televised gig. Paddy Owls, thanks for rivalry. To my ex-girlfriends, you are queens for putting up with all my money neuroses. 1 know it wasn't easy. To my aecountant, Joel Rosenberg, and real-estate attorney, Michael Neary, thanks for all the boring yet wonderful business advice. nods ro Chris Kula and Charlie Todd for their come and bargain-friendly brains over the years. HllgS and kisses ro the DPG, a marvelously loyal group hooligans. And, lastly, to my basketball eoaches, Joe Prince and Dave Pittman. You guys didn't help me make any money, but you helped me perfeet an unstoppable say, is pricelcss. drive. That, as

Glossary

215

Comparables The most common way to determine a prop

erty's value is to compare the prices of similar properties nearby that have recently soldo Check out Trulia.com to ac cess recent sale prices in your neighborhood. (See page 111) Compound interest Interest paid on the principal plus the

already accumulated interest. Each year, you are com pounding a higher amount as imerest accumulates. The more often something is compounded, the larger your prin cipal, or your money invested increases. This is why com pound interest is so advantageous to young investors. (See page 40)

Glossary

Contractors and handymen To locate contracrors and

AII cash deal Real-estate slang meaning that the buyer is

handymen, it is always best to go with a reference. Talk to friends, family, and neighbors in the area to see who they have used and liked. Ask how much the person charged, if he showed up on time, and, obviously, if he did a good jobo Ask the contractors for their own references, go see exam pIes of their work, and ask a lot of questions. Abad contrac tor or handyman will make things miserable for you. (See page 1(9)

not getting a mortgage to purchase the property but will be paying for the property in full at the closing (although this is usually done with a certified check rather than a van full of cash). (See page 179) Brokerage account Places that will help you invest online

include E*Trade Financial and Charles Schwab & Co. A brokerage accoum is one that allows yOll to buy stocks, bonds, mutual funds, and other investments by telling an accredited broker what you want. Most of the transactions are done online and can be accomplished WithOllt having to talk to anyone. (You can choose to talk ro someone if yOll prefer.) (See page 55)

Credit score A credit score is a three-digit ranking based on

your credit history that helps lenders determine your credit worthiness, meaning how good of a borrower you will be. The higher your credit score, the better interest rates you will get on loans. Your credit score can range from 300 to 900, but anything over 700 is considered excellent. (See page 32)

Capital gains tax Tax on a sale of an asset that has increased

in value during your ownership. Stocks, real estate, bonds, and precious metals have different tax rules, but real estate is very favorable taxwise to investors. (See page 154)

Dollar cost averaging This is a strategy of investing regu

larly regardless of market conditions. You invest the same amount in the stock or mutual fund on a regular basis, not worrying if the price is high or low. Over the long term,

Closing The official completion of a real-estate transaction

(the day all the papers are signed). (See page 71)

--Á

216

Glossary

you're averaging out vestmenr. This makes sary. page 60)

spending the actual cost ot tl1e lO ro time the market unneces

Down payment Amount you pay at the dosing ro secure a

real-estate purchase. The remainder is paid with a mort gage. Down paymenrs are not always necessary, but typical ro paya down payment of 10 percent to 20 percenr of the purchase priee. Think of it this way: the purchase príce mortgage amount = down payment ($100,000 PP $90,000 MA $10,000 DP). page 66) Emergency fund Saving up three months' worth of expenses that is entirely hands-off except in case of emer gency (illness, losing a job, death of car, and so on). A wise-and crucialfinancial strategy. (See page 1 Equity The value of a piece of property minus the money you owe on it. (See page 71) Exclusive agreement An agreement ro l1st your property with only one real-estate company tor a defined period of time. The benefits indude a more focused marketing of the as it 1S theirs only for a limíted time, plus a nego dable or reduced braker commission. (See page 1

217

For sale by owner Selling property wlthollt the use ot a

real-estate This saves owners fram paying a commis sion for selling thetr property. However, owners usually are not real-estate experts, and this can lead ro less exposure of property, underpriced properties, and having ro nego date directly with the buyer rather than through agent. (See page 401(k) A 401(k) is an employer-sponsored retiremenr plan.

Money is taken from your paycheck befare it is taxed may put you inro a lower tax bracket) and invested in a retiremenr fund for you (usuaUy in a torm of mutual funds). Many times companies will match your 401(k) con tribution. For instance, if you elect to auromatically invest of your paycheck in your 401(k), your company 5 that 5 percenr, essentially doubling yOllr invest mene. 1 recommend investing in 401(k)s as soon as possible and contributing the maximum amount possible. These funds can transferred from job to job or from a job fund ro personal 401(k) accounts with brokerage firms (Charles Schwab & Co., E*Trade Financial, and so on). !t's one smartest, easiest, and most cost-effective ways to build a nest egg. (See page 26)

Flipping property Real-estate slang for an invcstment strat

Good faith estímate You will receive a GFE within three

egy of buying a house in poor condition, renovating it quickly, and reselling it. This "Hip" of the property can re wrn great profits but is considered a risky investment for beginners. (See page

of applying for a mortgage. This will be a "good faith" outline of all the up:-fronr expenses that you will accepting this loan. Ir's best ro consíder this the lowest amount you will have ro spend at the closing. Remem ber, although the estimates are in good faith, they aren't completely accurate, sometimes reflecting a much lower ex pense than you will actually íncur. page 71)

Foreclosure When a bank repossesses a property because of

missed mortgage payments. Banks their money back. (See page

seU the property ro

218

Glossary

Gut renovatíon

.,,\!-I'Ir.1:"'I1

and replacing everything from (See page 11 O) Home equity A home equity loan or line of credit allows

homeowners ro borrow money using their property's equity as collateral. (See page 168)

Glossary

219

thírty-year fixed and a five-year ARM, or adju5table rate mortgage. A thirty-ycar fixed means you have at a interest rate, and your for the life of the loan. A five-year ARM means the interest rate is years; it will adjust itsclf ro the current interest rate thereatter (See page 66)

Interest Think of interest as the "rental fee" you owe for

borrowed money. Ifyou charge $1,000 on your credit card, borrowed money is called the principal. You will be a rental based on a percentage of the principal money. That percentage (and your example, if your credit 1 the math cent a day interest, (See page 25) Interest rates Interest rates change [or a variety of reasons, but ir's mainly based on the strength of the economy, If the economy is doing poorIy, interest rates are lowered ro help enconrage investments. If the economy is gaining ground, the rates are raised ro keep a nice balance and to control 1n {lation. 1] 8)

Mortgage broker Recommendations are the best way to go

when locating a good mortgage broker. Brokers don't get paid unless they find you a loan you agree on. For instance, he might find you a loan at 6 percent interest (pretty good), but he works on commission, so he'll give it ro you at 6,5 percent interest (sti11 pretty good), These added percentage points the broker you are somctimes negotiable. It doesn't hurt to try. Always ask up front if there are any fees. If yon a dccent credit score, there commission fees on a rather than through a broker. more time, and therefore more than with brokers. (See page 112)

thercfore they are considered a very liq so it i5 not

Multifamily home Real-estate property that has more than one unit. This can be anything from a two-family rown house to a twenty-plus-unit apartment complexo (See page 114)

Mortgage A loan for the purpose of buying real estate. There are many different kinds of mortgages, such as a

Mutual fund Mutual funds are investment funds in which investors pool money rogether and invest based on a deci sion of a fund The manager buys various forms of securitics to try ro get the best return possible have themes, in the S&P (Stan

liquid An asset that can easily be turned into cash. Stocks

Lowball offer A

put in an worth. (See

220

Glossary

dard & Poor's) 500 index (the five hundred stock companíes), and property index funds, which invest in real estate. Many have a minimum investment amount, but you sorne that don't. Investing in no-load and low-fee 1S crucial, as you don't want to be paying out any profit charges that will commlss10n (See page 26) you may have Open house A way to seU real estate by opening up the house to aH visitors at a scheduled time for a walk-through of the property. A real-estate agent usuaHy hosts the tour, and the homeowners are usually absent. (See page 68) Partnership A written business contract through which aH partners agree to share profits and of the business. 1 would recornmend having the partnershi p agreement overseen by a lawyer or an accountant who can file it the state. This usually can be done for less rhan $300. (See page J54) Portfolio A collection of aH your invesrments. Having di

versificarían and invcsting in differenr areas withín your risk (in other words, nor having all your cggs 10 one basket). (See page Positive cash flow A situation in which income is grearcr

than expenses. Having a credit card that rewards you cash back, as long as you pay off the balance in full each month, creates a positive cash flow situatíon. (See page 27) Press release A press release is a news bulletin sent via fax or

ro Real~estate

to the

oudets informing them of a potential story. to subrnit a press rcIease. (See page 145) agent's fee An agreed-upon cornrnission paid

agent for his/her role in the transaction

___________________ 4 "

Glossary

221

estate. Usually 1t's a percentage of the sales price (roughly 2 to 6 percent), and negotiable. You pay only if the transaction is cornpleted. (Sce 1 Refinance Replacing your olct mortgagc wlth a new mort gage, usually one with more favorable rates. Usually done when interest rates are lowered or the valuc of your property has gone up drastically. Refinancing allows you to lower monthlv payments or cash out sorne equity. (See page 191) Roth IRA A

that 1S usually in stocks. Roths are different than other IRAs in thar all earoings made your tion are tax free. Starting in 2008, you can contribute up ro $5,000 ayear to your Roth IRA account, and all the money you earo is yours; no tax will have to be paid on it. An ad vantage of a Roth IRA is that rhere are no age limi ts for you can out your money. A disadvantage is rhat you cannot contribute ro a Roth IRA if you make over $95,000 ayear. page Rule of 72 This rule will help you

out how long it will take to double your money. Just divide by growth rate. For instance, if you invested $250 once at 9 percent, it would take eight years for yout investment to 8 years. (See be worth double that ($ 5(0), as 72 .;- 9% page 51) Savings Bond Savings bond s are obligations owed to you by

the U.S. goverornent. The goveroment issues bonds to money in the present by promising to pay you back more the future. The way it dnes that is to seU a bond at cliscount (for instance, half of face value). After a specified period of time (say eight ro ten years), the bond will mature to be it was issued foro (See

r~'=-"".==7-~~-~-

222

Glossary

Socially responsible investing Not aH corporations are evil.

You can also choose to ¡nvest your money with only socially responsible and environmentally friendly companies. Cer tain brokerage houses, like Calvert, specialize in socially re sponsible mutual funds to help you become a socially responsible investor. You createyour standards, and then it invests your money only in these "good" companies. (See page 56) So lid buyer Real-estate slang meaning that the buyer is of solid financial background and thus will not have trouble being approved for a mortgage, which would kili a real estate transaction. (See page Timing the market Timing the market is the bad-idea

strategy used by many beginners trying to predict when the market is about ro go up and when the market is going to go down, aod rhen selling/buying stocks based 00 thar hunch. (See page 49) TraditionallRA Similar to a Roth, it's another form of an In dividual Retirement Account. However, unlike the Roth, traditional IRAs are subject ro income taxes based on the money they have made. It also diHers in that your contribu tions are tax deductible. (See page 26) Transitional neighborhoods Up-and-coming neighbor

hoods. You can usually tell if a neighborhood is improving by noticing if any construction projects are happening on the block. (If neighbors are investing money in fixing up thejr property, that's a good sign.) Also, commercial places nearby saya loto If artsy new restaurants are opening up, or a retail store that's a big step up from a 99-cent store, that usually means the neighborhood is changing too. Restau rant owners and boutique store owners are by definition en-

Glossary

223

trepreneurs, and successful ones see things well in advance. So fee! free to fide their coattails and follow them into a new neighborhood, as they would appreciate new residents moving in as well. Now, realize that neighborhoods don't change overnight; it's a slow multiyear process. But it Can wonders for your investments if you just have the pa tience for a transitional neighborhood to turo around. (See page 68)

About the Author

ALAN COREY is a

York Y-Uil;jt:U entrepre足 neur, speaker, writcr, aod bargaio A bit of afame whore, he has appeared 00 {-ive TV shows and one game show to date IS looking for more. Visit his Web site at www.alancorey.com.

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