I became a millionaire at the ripe old age of 26.
Many people dream of hitting a seven-digit net worth but think the only way they’ll get there is by getting an unexpected windfall like winning a game show or lottery.
They’re wrong.
I’m living proof.
And I started out with $30,000 of debt.
I didn’t get there by paying the “stupidity tax” and throwing my money away on games of chance. I worked hard, saved as much as I could, and invested to compound my wealth.
And here at the Intelligent Income Daily, my team and I share our decades of real estate and stock market experience to help you make wise investing decisions that can compound your wealth and provide you with a stream of safe and steady income.
Today, I’ll share with you my journey to a million and beyond, how I nearly lost it all, and how I rebuilt my fortune. I’ll also share with you a simple way to get started on that same journey.
A Man with a Plan
When I graduated from college, I was ready to start making some real money. So while many of my college classmates headed off to graduate school, I was looking to land my first job so I could pay off my student loans.
There’s nothing more motivating than starting off with a negative net worth. I owned a $10,000 car and I had $30,000 in student loans, so I was worth negative $20,000. My goal was simple: I wanted to become a millionaire in record time. My plan was to build a real estate empire.
My mother worked as a real estate agent, so I already knew the three most important words: location, location, location.
To a young single male that meant finding a house next door to an all-women’s college.
I bought my first house for $50,000. I negotiated a deal with the previous owner to finance it with no money down and a $400 monthly payment. Then I rented out the upstairs apartment for $300 a month and got a roommate to pay me another $300 a month.
Now I had a house that generated $200 a month in cash flow. Between that and my job, I was able to generate a financial statement I could take to the bank to apply for more loans. Over the next three years, I compounded that initial investment by buying more rental houses and became a millionaire.
Next, I turned to commercial real estate, building stores for Advanced Auto Parts and later developing full shopping centers. Over the next decade, I built stores for Wal-Mart, Bi-Lo, PetSmart, Barnes & Noble, Blockbuster, Payless, Walgreens, and many others. My wealth soared to $30 million.
But I got greedy. I used too much leverage and partnered with people I should have stayed away from. When 2008 hit, I lost almost everything.
I say “almost” because I still had my wife and five kids. My business partner’s marriage did not survive.
But to be clear, I was so broke that I couldn’t pay the lawyer fees to file for bankruptcy.
The Durability of Dividends
Over the past 15 years, I’ve rebuilt my finances. But not by diving back into the world of real estate development. Instead, I used the knowledge and experience I had to invest in real estate investment trusts (REITs) and other dividend-paying companies.
It was a slower – but far safer – way to compound my wealth. Like that first house I bought, investments in blue-chip companies give me a steady stream of cash flow through dividends which I can then reinvest in more shares.
And I’m not worried about suddenly losing it all because I can’t pay the mortgage. The companies I own are the best of the best and ready to handle any recession while continuing to pay me handsomely.
You can begin your journey to a million today by compounding your wealth with dividend-paying companies like I did. One quick way to start is by investing in the Schwab U.S. Dividend Equity ETF (SCHD).
SCHD yields 3.3% and has grown its dividend by an average of 14% over the past 5 years. Plus, in this bear market it has fallen only 5% while the S&P 500 is down over 13% since last January.
And SCHD invests in fundamentally strong companies with a record of consistently paying and growing their dividends.
Happy SWAN (sleep well at night) investing,
Brad Thomas
Editor, Intelligent Income Daily
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Source: Wide Moat Research