Today the average student graduates with $30,0001 in student loan debt. That is about 10% of the average American mortgage debt ($309,2002), which is the amount that a home buyer would generally want to apply as a down payment.
The average graduating college student begins their first job at a salary of $50,0003. The average monthly cash flow (income minus expenses) of the American household is $04. At this rate, the college graduate will never pay off that student loan.
The American dream used to consist of owning a single-family home and the largest debt incurred was the acquisition of that home. Now, too many college graduates start their career with more debt than their parents had after purchasing their first home.
There is a better way! Consider the following proposal as an alternative to that student loan debt scenario:
Purchase lifetime access to a real estate investment education for $20k and become a student practitioner of that education. Immediately put your newfound knowledge to good use and purchase your first house that you can rehab and sell for a $20k-30k profit.
Pay off your $20k tuition cost and use the $10k left over as the down payment on a second house. Turn that house over for another $30k profit.
Repeat this process two more times and you will have earned $120k during your first year of education. You have now completed your “freshman” year of college.
As “sophomore” year rolls around, it’s time to find a duplex or quad property in which your incoming rental revenue will cover your mortgage payment. Now you’re off to the races. Using your profits from these acquisitions, make your down-payment on that property, then put credit-worthy paying tenants into your units. You now have your mortgage paid for by someone else, and if you play your cards right, your utilities as well.
You can now go out and get a minimum wage job, and forget about taking any further risks in real estate investing, right?
Wrong! You are now a successful real estate investor with a passive income rental property that you live in—and you have more experience as a real estate investor than 95% of the US population.
Your “junior” year offers the opportunity to become a professor of real estate investing. Start showing others how to do what you have done as you repeat the process yourself.
At this point, why not add another house per quarter to your game plan each year thus increasing your annual income to $240k in your “senior” year.
Set a goal at the outset to figure out what you want to study in college before the end of your fourth year, and then pay cash for your education from your college savings. You’re now financially free and, more importantly, personally free to enjoy life doing whatever it is that makes you happy.