How to Become a Millionaire on a Middle-Class Salary

[@RobWilliams007]

Love that statement: who wants to brag about working 50-60 hours a week? - I’ve been doing it all my life and it is a total burn out. Good statement.

[@adamzaleski5772]

Hello there. Three things that I forgot to mention in the podcast. One, from August 2011 to 2021, we averaged 90K/year of gross income (including rental income). Two, during the same time our net worth increased from zero to 1.2 million. If you deduct 7% (150K) in transaction fees to sell all the real estate, we would be left with 1.05 million. Three, my wife worked 46.5/hour weeks at her corporate job from August 2011 to May 2015. She has been working part-time (10 hours/week) for the past 6.5 years. Our son was born in May 2017. Thank you for the opportunity to share my story. I hope others can get some value from this interview.

[@richsamuel2922]

When will you no longer be leveraged? Or will you always be in some type of mortgage?

[@moneytalkswithjonathanthom4150]

You absolutely brilliant

[@moneytalkswithjonathanthom4150]

I also know several Loan officers that can assist

[@adamzaleski5772]

@@richsamuel2922 I'm currently at 51% equity for my rentals and 38% equity for my primary. For my rentals, my comfort zone is 50% to 75% equity. In the future, I will probably have a few rentals paid off. However, I doubt I will ever be completely mortgage free.

[@adamzaleski5772]

@@moneytalkswithjonathanthom4150 Could you send me a message on bigger pockets? It's been very difficult to find a mortgage broker licensed in all 3 states (CO, FL and HI). Thank you.

[@heatherharmon2679]

This is the most I have ever related to a guest! I’m also a college professor and like my lifestyle so much that I don’t want to switch to a field that may make more money. I actually make quite a bit more than him in a small town in Ohio so my cost of living is good and I currently have rental income that pays some of my bills. I came out of a divorce in recent years so paying off the debt from that and plan to build my portfolio at 50 years old. Loved hearing his story!

[@adamzaleski5772]

So glad that you enjoyed my story and were able to connect. Colorado is 48th in funding for higher education. It's not a very good ratio of faculty salary to cost of living. I was a finalist for jobs in Arizona and Michigan, with a better ratio. However, I am much happier in Colorado with the mountains and being closer to my wife's family.

[@justducky8508]

I like ms. Mindy, she’s awesome. Great personality and a very understanding individual 👍🏾

[@Beamarkone]

This was very inspirational. He is very determined and very goal driven.

[@westspeaking251]

I always have been interested to visit United States of America I hope one day I can meet some one from there and get invited to meet that beautiful country, greetings from Mozambique!

[@hoodlutalo3708]

How is the real estate market in Mozambique?

[@inea-fijourney22]

always awesome content! one day I'll be in this podcast 🙋🏾‍♀️

[@tylermundy7985]

Great stuff! Thanks for the solid content.

[@davisholman8149]

Wish I could tell folks this: NEVER sell a house you own. If I had kept my houses - even just the last two - I would be a millionaire. I would tell every young person to always keep your houses - unless the neighborhood is going down hill - but otherwise, keep your homes as rentals. By age 55 or 60 - you will be a millionaire.🤑

[@adamzaleski5772]

I agree. Its not that complicated.

[@kaushikvsmaniyan]

One must have a clear plan ready for the money before selling a positive cash flowing asset

[@adamzaleski5772]

I agree 100%. I'm not selling any of my rentals unless they go directly into another asset. I don't want to pull my money out of a leveraged real estate deal and have it sit in the bank, even if it's making 5%.

[@wbcoll01]

This is a rockstar episode. Adam is fantastic.

[@adamzaleski5772]

@wbcoll01 Thank you for the kind words. I will send you that $5 via Venmo later today.

[@drdilettante]

Grad school salary and taking on debt . . . been there, done that. Such a late start on my financial journey. The next obstacle was working year-round for several years in a 9 month-a-year job scrambling to get tenure.

[@Bingo_Betty]

I want to do this so bad and I'm ready to purchase my first investment home, I live in the midwest and I have no idea where is a good market around here. I'm in Iowa but should I look for good neighborhoods in a big city? Or areas in up-and-coming cities/towns?

[@adamzaleski5772]

Message me on the bigger pockets website and I can give you a few ideas on how to get started.

[@ceoptimist]

I grew up in Lake Bluff! Where were you?

[@adamzaleski5772]

60060!

[@educatedwanderer9293]

My mother and father earned a combined 3.1 million in their careers. My mother was an entrepreneur and had a business typing college papers and copy service before Kinko's came into existence. My father was a Civil Engineer and he earned two pensions. They both saved and invested a smaller percentage of 5 to 10%. I have worked and earned 80k to 180k per year for 25 years so far in my job as a critical care nurse and I save and invest 10 to 25%. Adding together what I inherited and invested my net worth at the age of 54 is 2.7M. There is a history of my parents and I working a lot of overtime. In hindsight I think there are ways we could have been smarter but I see that my parents did a decent job as they had comfortable retirements with half left over to pass on. I love my job as a critical care nurse so I will keep working but reduce hours gradually until I want to retire.

[@adamzaleski5772]

Yes, reduce the hours to increase your quality of life and extend your time on this earth. Don't stop doing what you love. Just do it on a more balanced schedule as you age.

[@bradleyvanzile1111]

I Retired at 36 on SSDI

[@CV-nn7jj]

I love Bigger pocket and it’s content. However, these videos are getting too ridiculously long. I watch the Regular BP and the Rookies BP and tend to skip this one because of its length.

[@jazminsandoval7813]

Increase play speed

[@CV-nn7jj]

@@jazminsandoval7813 I always do. 2x speed should not be almost 45 mins long still

[@stanleykania7184]

Florida is dropping insurance on property

[@adamzaleski5772]

Yes, insurance costs are going up. Over the past 3 years my home insurance increased from $950/year to $1450/year to $2166/year and now $3250/year post hurricane Ian. However, during the same time the rent increased from $1850 to $2550, so the cash flow is still better in 2023 than 2020.

[@jjharrison4099]

Just curious: how did he qualify for a house in Hawaii for $620,000 making less than 100k?

[@adamzaleski5772]

Great question. I put 20% down on a 603K house. My PITI was $2675/month. To qualify your debt to income needs to be less than 45%. You need $71,400/year of income to qualify for a $2675/month mortgage. Some lenders let you go up to 49.9% if you have large balances in retirement accounts.

[@cherylbisera5039]

He also could show he was planning to rent out the basement rental

[@adamzaleski5772]

I don't think lenders can count the basement rental income to qualify for the mortgage because the house isn't an official duplex. Renting out the basement is like taking on a roommate. Maybe they can count the income if you already have a signed lease? The basement needed to be remodeled, so getting a signed lease before closing wasn't really possible. We did a 6 month remodel and got a couple living in the basement unit immediately after the remodel was complete. @@cherylbisera5039

[@jeepgeek1]

I love Mindy but the focus is waaaayyyyyyy too close on her face....... We don't need to see that much detail.

[@crazyjo2197]

I second this

[@georgechang4006]

Personality is genetic? 🤔

[@adamzaleski5772]

Yep. It's mostly genetic. Environment has less influence. If personality was more environmental, we would have very similar personalities as our siblings because we share a home. For many people, that is not the case. For further interest, read any textbook in Psychology of Personality or read through the peer-reviewed research within Psychology of Personality.

[@georgechang4006]

@@adamzaleski5772 super interesting! Always thought nurture had more influence than nature will def look it up thank you for clarifying!

[@stanleykania7184]

He needs to read the strait path to real estate wealth.. Kris Krohn

[@adamzaleski5772]

I see many red flags based on his content. To anyone following his advice, I would use extreme caution. There are many different paths, so it's possible his advice could work for some. However, his path is not for me.

[@Mysticaltyger]

I wonder if his Florida house survived the hurricane.

[@adamzaleski5772]

Great question. My Florida house is 3 miles from the beach and was not impacted. One month post hurricane market rent increased from $2450 to $2850.

[@Mysticaltyger]

@@adamzaleski5772 Thanks for the reply.

[@adamzaleski5772]

@@Mysticaltyger We are about 15 months post hurricane Ian and in my opinion, market rents have stabilized due to homes being fixed. I would estimate current market rent for my Florida rental to be $2650/month. I'm currently getting $2550/month.

[@debchalker6900]

I would not want all those mortgages and than keep getting more mortgages. It would make me too nervous. I have alot of peace being debt free.

[@n4870s]

Take loans, that’s how

[@adamzaleski5772]

That is a good point. It also helps when rates are low.

[@christinab9133]

❤❤❤

[@kaushikvsmaniyan]

1:18:18 - 😂

[@FatimaL23]

Make more money outside of your job

[@trofas9945]

40k job with a doctorate ugh.

[@adamzaleski5772]

I took the lowest paying job available because it was in Florida during the biggest housing market crash in the last 50 years. The job also had 20 weeks of vacation. I had the option to make 100K/year in a corporate job working 50-60 hours/week with 2 weeks of vacation. I chose the first option.

[@blackfiree91]

Anyone buying rentals in a place you don’t live is just not capable of planning properly. You gonna fly to hawaii to do yard work. Ridiculous- hire somebody. I would never take financial tips from this person. It’s awful.

[@adamzaleski5772]

Different people have different strategies. When I no longer enjoy traveling to Kauai, I will probably hire someone. Good luck to you.

[@adamzaleski5772]

I'm going to Kauai for spring break for 10 days and staying at my rental because I'm in between long-term tenants. I have about 10 hours of landscaping to do. It should be a pretty fun trip.