Credit: Quantrell Colbert
|
Lady Luck has nothing to do with earning potential. “Each one of us has the power and ability to become millionaires,” says Lynnette Khalfani, author of The Money Coach’s Guide to Your First Million (McGraw-Hill). What you really need are a clear understanding of your current financial situation, a solid plan and a lot of discipline.
Real estate, entrepreneurship and smart investing are three proven ways to get there. Consider this real-life advice from three women who are well on their way.
At the age of 22, when many of her peers were thinking about paying back student loans or starting a first job, Tiffany Pointer of Atlanta bought her first property: a condominium in Baltimore.
Pointer, a corporate sales trainer, didn’t have a hefty bank account at the time. Instead she had something that Khalfani says is even better than cash in the bank if you want to become a millionaire: good credit. With a credit score of between 760 and 850, “banks will fall all over themselves to give you that loan,” Khalfani says.
Pointer’s score qualified her for 100 percent financing. “My credit history and scores enabled me to borrow and do what I needed to do,” says Pointer, now 32. “I recall putting down only $500 or $1,000 to buy that first condo, which was for closing costs.”
In 2003, after a visit to her parents’ home in Las Vegas, Pointer decided to purchase an investment property there. When she walked away with $70,000 after the sale of the property less than two years later, “I realized I could make some money,” she says. Keeping in mind that her credit score was the key to lower interest rates and more desirable loans, Pointer used her profits to pay off outstanding debts, such as $20,000 in undergraduate school loans and a $37,000 car note. Avoiding consumer debt is also part of her millionaire strategy. “I have a Mercedes convertible paid off; I have a Grand Cherokee that I drive most of the time that’s paid for. I have no school loans; I have no credit card debt to pay off. I just have mortgage debt,” she says.
To date, she has purchased four primary residences and five investment properties. For all the deals, she leveraged her credit score to get loans requiring little or no down payment. She has sold two of the properties, including the one in Las Vegas. The sale of the second one netted her $40,000. Pointer also uses her real estate holdings to contribute to her cash flow. With tenants in three of her investment properties, she earned more than $30,000 in rental income in 2006.
She examines all potential properties with an eye to their ultimate value. “I’m looking at how much I think the house will appreciate and how much I will make on the back end. I’m looking at whether I’m going to make any positive cash flow each month and what I can potentially save in taxes. As long as I’m getting two of the three, I’m okay,” she says.
Last year Pointer invested $64,000 of her real estate profits to open a pizza–martini bar called Sauce in Atlanta, which she hopes will put her even further along the road to becoming a millionaire. “I want to be free to make my own decisions and to do my own thing, so I need money for that,” she says. With a net worth of more than a quarter of a million dollars, she’s making great strides.
Continue to the next page to hear from another millionaire »
How You Can Be a Millionaire »
|
