MENTORS Magazine

MENTORS MAGAZINE | EDITION 1 | 45

three main elements:

• Expenses


• Income


• Time

The piece that

might be miss-

ing from this pic-

ture is Investing.

To build a solid

financial founda-

tion for all of your financial

goals, such as retiring at a

relatively young age, living

comfortably, providing for

yourself or your family and

not being married to your

job, you should understand

that investing your savings is

just as important as the ac-

tion of saving.

One of the best ways to

build steady wealth is to in-

vest in real estate, and you

don’t have to be inherently

wealthy or hold an MBA to

get started. Through con-

servative spending, smart

investment and prudent sav-

ing, millennials can use real

estate as a pathway to finan-

cial independence. Below

are four ways to use real es-

tate to start growing your

future nest egg:

Be A Borrower

You don’t have to put a 20

percent down payment on a

home to get into the game.

Government loans exist for

the very purpose of helping

first-time buyers become

homeowners. In fact, you

can often buy a house with

just a three percent down

payment. So, if you’ve fallen

in love with a house, town-

home or condo and you

have reason to be confident

of the neighborhood’s fu-

ture, don’t let a smaller-

than-ideal cash savings keep

you away from buying.

Live For Free By Taking In

Tenants

To help ensure your monthly

income exceeds your total

monthly expenses, consider

doing what many early in-

vestors do after college

graduation: buy a home and

rent out a few of the bed-

rooms. Your rental income

could cover most, if not all,

of the cost of your monthly

mortgage, meaning you can

essentially live rent-free in

your own home.

Again, as long as you’ve

done your homework on lo-

cation and you’re reasona-

bly sure of your ability to

find renters, this is an excel-

lent option. Not

only will you

eliminate one of

your largest

monthly ex-

penses by

getting other

people to pay

for it, but you’ll also build

equity in the process.

Invest In A Rental Property

Perhaps you’re already a

homeowner. You’re not

looking to move and maybe

that savings nest egg of

yours is a little bigger. This is

an ideal time to begin in-

vesting in a rental property

in order to increase the sec-

ond of those three FIRE ele-

ments: income.

Millennials in this financial

situation should look into

purchasing a townhouse,

single family home, duplex

or fourplex (a building divid-

ed into four apartments). By

renting out each of the

units, you’ll again be cover-

ing your mortgage plus

building equity in the prop-

erty.

However, because you’re

now renting out entire units

rather than just rooms, your

“just by collecting more in rent than your

monthly mortgage payment. Rental properties

provide steady passive income each month.”