Hi, I want more money

[kimber6]

Hi Everyone,
Great forum. I am a 19 year old guy. I started out my life working at a grocery store, then moved to doing asphalt work (both jobs combined lasted less than 6 months). I then decided that hourly work sucked (especially at a pay rate of $6.85/hour). I moved into selling construction door to door when I was 16 and I was quickly making very good money for a 16 year old. The year I turned 17 I made somewhere in the 30,000 range after taxes. Last year I started a new carreer in real estate as a real estate agent. I am on track to make right around $50,000 after taxes this year (which I would like to be higher, but it takes time to build a business). I currently have around $40,000 in cash in the bank (saving for house but will begin investing soon). I really love the sales business and hope that when the market stabilizes, my hard work will pay off. Any advice for a young guy would be awesome!!

 

[wanaberetiree]

only one - college degree of your choice

 

[kimber6]

I should mention- I am about 10 credits from completing me 2 year AA degree at a local community college (which I am taking online and should have done soon) At this point, I have absolutely no desire to continue to a bachelors degree, but that may change. I didnt take out any loans for any schooling so the freedom of time and money has been very encouraging and fun

 

[haha]

only one - college degree of your choice

I'm not so sure. This guy obviously knows how to sell and likes it. First thing college will do is bore him silly and try to make him feel that selling is a crass, low calling. His opportunity cost would be huge, and his out of pocket costs will also likely be large. Real estate is a huge industry, get started. Residential sales is a hard, competitive time consuming way to make a living, but it can be a very good living. And it is anti-bureaucratic, a good fit for someone like you.

And there is a lot more to RE than residential sales. I have a nephew about 30 who owns over a hundred apartment units in a quality, high demand urban rental market and though he is likely kind of stretched one day he will be rich. Unles of course old demon leverage gets him first.

Ha

 

[kimber6]

I do love sales and trust me, getting my two years of college done this far was like pulling teeth!! I did a full year of college while I was in highschool because I couldnt stand sitting in a class room doing nothing all day long. It is a tough market for real estate right now but it is a good time to learn the ropes so that when the market shifts (stabilizes) there will be huge incomes available. In the opinion of anyone farther along than me, what else could I be doing to set myself up for success?

 

[plex]

This is one of those rare situations where i would not recommend going for more than the AA, unless things change. If you can sell/interact with customers well, and have some ambition, there really is no reason to go to college. Sales jobs don't get shipped out to China.

 

[heyduke]

if you are making 50 K in a down market all you need to do is be patient as the markets will eventually turn the corner and real estate will rise appropriately along with your commissions...

 

[Ed_The_Gypsy]

I know you didn't ask about this, so consider it unsolicited advice.

I would recommend starting a Roth IRA. This will get you more money in the distant future. You can set one up at your bank to start. Put the money in CDs until you learn enough about investing to do it yourself. Read this guy: The Coffeehouse Investor It took me 30 years to learn that index funds were best for me (and 99.99% of everybody else, too).

It is important to spend less than you make, too. Some people never learn that. It took me about 40 years to learn it myself.

I hope you are smarter than me.

Cheers

 

[kimber6]

You mentioned the roth IRA. Being self employed, I can qualify for a SEP account. Is this better for me than the roth? I dont know a ton about either so any pointers would be great!!

 

[Ed_The_Gypsy]

Sorry, I am not familiar with an SEP. I suspect that contributions are before taxes, reducing current income, but are taxed upon withdrawal.

Contributions to a Roth are after-tax, but they grow tax-free and withdrawals are not taxed. (How is that for dynamite?) After five years, you can take something out of a Roth. (Best to check on this. I do not know how it works.) There is an annual limit to how much you can contribute ($5k for you kids, I think) and it must be from earned income.

I am trying to get my kids interested in Roths.

 

[Milton]

Perhaps this may help.

Wizard: Look at it this way. A man takes a job, you know? And that job - I mean, like that - That becomes what he is. You know, like - You do a thing and that's what you are. Like I've been a cabbie for thirteen years. Ten years at night. I still don't own my own cab. You know why? Because I don't want to. That must be what I want. To be on the night shift drivin' somebody else's cab. You understand?

I mean, you become - You get a job, you become the job. One guy lives in Brooklyn. One guy lives in Sutton Place. You got a lawyer. Another guy's a doctor. Another guy dies. Another guy gets well. People are born, y'know?

I envy you, your youth. Go on, get laid, get drunk. Do anything. You got no choice, anyway. I mean, we're all f*cked. More or less, ya know.

 

[mmcc]

Any advice for a young guy would be awesome!!

It sounds like you will do very well. Here's my $.02 of advice. In cyclic markets like real estate, there will be times when the money is flowing and everything is a win. Leveraging your money will probably make sense, but be careful to not over leverage -- lots of real estate millionaires go bankrupt when the market swings back. Also, if you continually save AND diversify along the way, there will be a day when you seem like the smartest guy in the world. Studying market history may allow you to learn some of this the easy way.

 

[Milton]

Sensible advice from MMCC.

 

[BTravlin]

In the opinion of anyone farther along than me, what else could I be doing to set myself up for success?

I never graduated from college and have been in sales all my life and have done pretty well so I'd say

1. find a market/product/service that you love and put all of your effort into being the best, most knowledgeable salesman in that field (shades of Dave Ramsey)
2. save, save, save along the way
3. set aside a decent amount of time for yourself, your friends and your family as money ain't everything (is that considered heresy here?)

 

[Milton]

set aside a decent amount of time for yourself, your friends and your family as money ain't everything (is that considered heresy here?)

Far from it! Anyone obsessed with accumulating as much money as possible (to the exclusion of non-material rewards) is unlikely to be attracted to the idea of early retirement.