5 Do's and Don'ts So You Can Be Financially Free This Year

Jun 14

Alright so these are the 5 do's and don'ts if you want to be financially free. Like literally - if you do these things - you can be financially free in the next year.

And as you read them - I want you to gauge your reaction to them

Are you saying to yourself - no these are not possible where I live or based on my situation or are you asking yourself - how you can make them work for you based on your situation

I picked these 10 items because I really feel like anyone can do them if they just focus on the step by step and they aren’t dependent on having a lot of money to start with

Do:

House-hack a home - buy a property with 5% down to live in and rent out rooms/units to live in for free
Get your RE license so you can make income and build a referral engine/brokerage to make passive income
Buy an Airbnb with 10% down using a 2nd home loan - to cashflow 2-4K per month
Buy another Airbnb using a DSRC loan or investment loan
Start another side hustle like a podcast, YouTube channel, or an online product

Don’t:

Invest in a retirement account if you want to be an active investor
Buy your ‘dream house with 25% down if you are under
Buy or lease an expensive car unless you absolutely love cars
Let your food budget exceed $1000 per month
Get a dog or have a child. Some of you may not like it, but these are big costs/time pulls - especially in the early years

Let's go into these and actually what they mean

Do:

House-hack a home - buy a property with 5% down to live in and rent out rooms/units to live in for free
We have some dedicated videos on this channel and TikTok about step by step of house hacking but house hacking exists because the government wants to encourage real estate purchases.

I don't think anyone in the gov or Fannie/Freddie Mac - the agencies that monitor these types of loans - intended to have people do this but it's an amazing legal loophole.

And since the gov wants more people to buy property and interact in the real estate market, they have low money-down loans to encourage people to buy the property and keep interest rates low. And they will even back or secure the loan.

It's pretty cool. And what you can do after you purchase a primary residence with 3-5% down is rent out the other rooms in a single-family home or rent out the other units in a multifamily property.
And when you do this you can remove your cost of living and in some cases even live for free - and you didn't need a lot of cash to do this. And then beyond that, you get tax benefits, net worth growth, and all the learnings that come with real estate.

To me - housing hacking is like the training wheels of real estate.
Get your RE license so you can make income and build a referral engine/brokerage to make passive income.
While getting your license can provide a really good income, which you may want to do at the beginning, what it will do for someone who is building a brand/networking and wants to stop trading time for money - will allow you to make money from passive referral income.

I never knew this existed but the way this works is that if you have a license - anytime someone comes to you looking to buy or sell a property and you refer them to an agent who can help them - you are eligible to receive 20-25% of that agent's commission.

I repeat - you are eligible to receive 20-25% of that agent's commission for literally making a text introduction. This is the part that gets me excited.
Buy an Airbnb with 10% down using a 2nd home loan - to cashflow 2-4K per month
This one is just underrated.

I think more people are becoming aware of the possibilities with this loan but if you have decent financials and decent credit, you should be able to obtain this loan. And in my opinion, it should be one of the first purchases you make after you have your personal housing covered.

You can use it whenever you want and you can put it on Airbnb when you are not there.

You can write off the furnishing and expenses and the interest rate is fairly low.

Also - unlike the FHA loan - the PMI you incur for putting less than 10% down goes away when you hit 20% in equity which happens fairly quickly in today's market.

For those that don't know - you have to typically pay an additional monthly fee anytime you put down less than 20%. And in some cases, it never goes away - but with this loan it does.
Buy another Airbnb using a DSRC loan or investment loan
This one is probably a stretch for a first-year goal as acquiring 3 properties may be out of the limits if you are a true beginner investor.

But if you want to be ambitious - try it.

This is a loan you can receive that is based on the financials of the property instead of your personal financial situation. And it's amazing for Airbnb.

The only catch is that there are some pre-payment penalties and other fees that make it a little less attractive.

But if you find the right property and Airdna numbers look strong, you can definitely take advantage of this loan.
Start another side hustle like a podcast, YouTube channel, or an online product
DOCUMENT THE JOURNEY.
Content creation is one of the most underrated ways to build income streams today.

It can be daunting at the beginning but if you get good at and just document the basics of everything you just did above - and stay consistent for 1 year - I guarantee that you will be generating 1-5 thousand dollars from content creation.

This can come from affiliate links, sponsors, brand collaborations, or launching a digital product.

Those are just a few but there are others. After creating content consistently for 15 months about my journey - content creation generates anywhere from 1-5k per month for me. And this is just the beginning.
And if you are hearing this thinking - well you are just that type of person and I'm not - that's just not true - I used to hate social media and did not enjoy public speaking.
So those are the 5 dos - let’s talk about the 5 don'ts

Don’t:

Invest in a retirement account if you want to be an active investor
Sort of a hot take but I think it's becoming less of one.

If you are going to take the time to learn about active investing and you enjoy it - you should have no problem acquiring assets - in this case, real estate - that will take care of you way better than a retirement account will.

Yes - I don't think you should do a match if your company allows it as that is literally free money but in most other cases I don't see the value in it for me. I want my cash to go towards cash-flowing assets instead of out of my control and lower returns. This isn't for everyone but I think it has to be evaluated.
Buy your ‘dream house with 25% down if you are under
I think this one just comes from poor information being passed down.

In my opinion, the goal is not to put as much down on a home, the goal is to put as little down on a home.

And then after you have cash flow from assets - you can put the 25% down if you want. But ultimately putting 25% down on a dream home at a young age is prohibitive for so many reasons.
1 - you are at a young point in your career, things change quickly and until you are a top exec in a company - you can be laid off - and now have a very high monthly cost to cover.
2 - I just don't think it's necessary. I don't think most people use the space in their big homes - especially if they don't have kids.

The moral of the story - live with roommates or house hack for as long as you can until you hate it.
Buy or lease an expensive car unless you absolutely love cars
This is just classic.

And if you have already done it - it's really not your fault. It's the way we have been conditioned.

Conditioned to always let our expenses increase as our income increases.

This is probably one of the quickest ways to stay poor forever. The car is a depreciating asset - meaning it will always be worth less than it was the day you bought it. And it doesn't make you money.

It just consumes money. And if you're surrounded by people who judge you based on your car, you are around the wrong people.
Let your food budget exceed $1000 per month
Self-explanatory and similar to the points above - it's just not necessary and if you want to be financially free faster I would push to 300-500 per month.

Eat out once a week and cook the rest or buy pre-made food. It also saves time
Get a dog or have a child.
Some of you may not like it, but these are big costs/time pulls - especially in the early years.
I guess I am saving the most controversial for last.

I had a mentor once tell me - your life is like a house - and in order to build a great house - you want a strong foundation before you start building - otherwise, the house is always going to have problems.

I guess that's really how I look at this one. Kids, dogs, and spouses seem to be amazing things - I don't have any of them yet but from what people tell me they seem great. But they are massive expenses and they ultimately get in the way of financial freedom if that is your sole goal.
And I also think focusing on them before getting your foundation set, is a little necklace even for them.
So to wrap that one up - I would just recommend focusing on yourself for one year before focusing on other people

CONCLUSION

If I were starting over I would focus 100% of my energy on steps 1-3 of the dos and really do my best to just cut any unnecessary costs. I’d also consider starting a podcast - to up my networking and hopefully find more mentors.

I don't know how long it will take you to be financially free following these steps - It’s different for everyone but I do know it can be done in 1 year and I have seen people do it in that time frame, I do know that if you do not do any of the do's and focus on the don'ts you will be working in a job you may not like for a long time

Thats it - hope you found this helpful.

Thanks for being here and see you at the next one!

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