From the 99% to the 1%

Is it just me? I browse from website to website, newspaper to newspaper and there always seems to be something about the 99% vs. the 1%. It’s frustrating to see media outlets encouraging the class warfare that has been lying dormant for years but is ready to erupt like a volcano without warning. Frankly, I am sick of both sides of the warfare and am ready to prove that with some good old-fashioned hard work, people can transfer their lives from being part of the 99% to being the 1%. This will not be an overnight millionaire story – but one of years of effort, trial and error, and asset building. There is nothing wrong with wanting to be a part of the 1% in my opinion, but I hope that if you have the drive and motivation to get there, you will wear that badge with more class than the unfortunate character in California who left a 1% tip to spite a server on a $134 bill.

Here is a little background on me. My name is Patrick and I live in upstate NY. I have lived in NY all of my life despite being more than willing to move elsewhere. I was brought up in a middle class family (part of the 99%) who stressed education. I graduated from high school in 2004 in the top 10% of my class. I continued on to Rensselaer Polytechnic Institute where I received a B.S. in Civil Engineering in 2008. I accepted my first job with a paying salary of $51,001. This seems like a lot, I know.For a kid just out of school, it does seem like a ton, but after taxes, bills, and loan payments, there is a lot less than you hope for. Despite the bill conundrum we all face when we hit the real world, I believe that this amount is at or above the average household income per year, yet I am still a part of the 99%.

I had been harped on about finances my entire life as a child. My father always pointed out the importance of being financially intelligent, and developing your net worth as many people tend to forget about. Due to his encouragement, I began learning about real estate when I left college. I would consistently come home from work and use sites to look at houses and potential purchases that would benefit me the most in the long run. In 2009-at the age of 23- I made an offer on a single family home. The contract was accepted and I ended up purchasing the property with approximately $30,000 in equity – a big time move for a small time player. I purchased the property with the intent of flipping it. That did not quite pan out as I ended up with an FHA loan which requires at least one year of ownership before selling the property. Instead, I decided I would rent out the rooms in my house to supplement my income.

Was I scared? No. Mainly because I had no idea what I was getting into.(I would be now!) I can’t tell you how much I have learned by doing this over the past few years. Despite some of the hiccups, I have continued to do this and will continue to rent the rooms out until I move or decide to start a family. The additional income pays for the majority of the mortgage, taxes, homeowners insurance and private mortgage insurance (which comes to roughly $15,000 each year).  One reason I will continue to do this, besides the money, is that I enjoy getting to know people and I firmly believe that you can learn something from everybody – even if its just how not to act.

So here I am two years later; now 25. With the lack of experience staring me in the face like a hungry pirhanna, I decided to do something even crazier: buy an investment property. This investment property is in a great location as its highly desirable and easy to rent. The rental income per unit more than covers any mortgage cost that is anticipated which then helps provide additional income for me as well. Though I am incurring all of the purchase costs, I do have a co-signor who is strictly there for a “cash reserve” that is now required on all investment properties (funny- five years ago a homeless guy could have gotten a loan…). The closing date for this property will be in the coming month and I get more excited and stressed everytime I think about it!

Now, some of you are probably asking yourselves, “Why the hell is this guy telling us all this?” Well, I want to share my experiences with you and talking about finances allows us all to learn a little bit. One of the major differences between the 1% and the 99% is that the 1% talks about finances where the 99% speaks of finances as if it is pornography – rarely and its typically awkward. I hope that you do not misunderstand me, for I am not ashamed to be part of the 99%, but I am ashamed that many within the 99% pass excuse after excuse out of their mouths as to why they aren’t apart of the 1%. I see people all the time buying themselves the newest TVs, the nicest vehicles, and the luxurious accessories – all when they can’t afford them. If only they knew what that $1000 flat screen could turn into over the next decade if it is put into an asset rather than a product. Yes, some people start off in better situations, but many choose to put themselves in the situation they are in. I understand that bad luck might have something to do with it, but instead of blaming, why not ask yourself that all important question “What can I do to get out of this position?” This can be a great motivating tool! An example I see all the time is the homeless pan-handling for money. If I try to give them an application to somewhere, they scoff at it. That’s just another excuse to me and I’m guilty of them as well.

I AM DONE MAKING EXCUSES. I AM DONE HEARING EXCUSES. Stop the warfare. One of the biggest attributes that separates us and them is hardwork and a little persistence.  To prove it, I have begun searching for a second job. I applied to 5 separate restaurants tonight in an effort to supplement my income to work towards my financial freedom and therefore freedom from the 9-5 life we call the “Rat Race”. I am scared but I am ready to take this journey and claw my way to the top.

Best wishes for your financial freedom,

Patrick

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