I just finished reading A Million Bucks By 30 by Alan Corey. It's 210 pages and a fast read with short chapters--I made it through in about three hours. The basic premise of the book is that this kind of loser guy managed to make a million dollars in seven years while living in New York City and making a salary of $40,000-50,000 a year at his day job. He repeatedly says throughout the book that he has no special skills.
He does have some useful personality traits, though: determination, a willingness to take calculated risks, a great work ethic, and a willingness to make sacrifices. As I read the first several chapters of the book, I felt that I wasn't really getting anything out of it because I already have most of the habits he does. I never make an online purchase without looking for a coupon code. I never buy a non-necessity without taking at least a day, and often several months, to consider the purchase. My rent is about as cheap is it can get. I resell things I'm finished with all the time. You get the picture.
And throughout the first several chapters, his net worth grows at a reasonable speed for someone who is simply very thrifty. It all seems very doable. I am already doing it. Where is my million dollar payday, I wondered? After all, in addition to similar habits, we also have several similar personality traits. We are both willing to make short-term sacrifices for what we hope will be a future gain. We both look for odd jobs and extra ways to make money. For him, it was gigs on reality shows. For me, it has always been having second and third jobs while I was an employee. In the last ten years, I think I've had about 40 different jobs, and that's excluding the paid psychology experiments, surveys, and focus groups. I've worked nights, I've worked weekends, I've worked at places with side benefits like free housing or free food. I've worked as a full-time student and been a student as a full-time employee.
Some of Corey's other personality traits, though, make him able to take some additional frugality measures that I know I couldn't implement while still enjoying my life.
-After buying a cheap one-bedroom apartment with a living room, Corey puts up a curtain, calls the living room a second bedroom and rents it out to a stranger. I could not turn my living room into a spare bedroom and rent it out, let alone to a stranger. I hate living with people, and I need peace and quiet to successfully work from home. Corey hated living alone, and was able to benefit both emotionally and financially from having a roommate.
-Later, when he buys a duplex, he turns it into a single-family home so he can increase his rental income by renting out all of the bedrooms instead of just having two units to rent. He also lives in the building, in a windowless room. Having six roommates and no windows would never work for me.
-He has a day job with a 401(k) and health insurance and he keeps the job all the way until he reaches millionaire status. I don't want a day job and I've never been offered a 401(k), which is unfortunate because it's a great way to make extra money and I'm sure I would have socked away a ton of cash in one by now. However, I do now have a self-employed 401(k), so in a few years when I'm making more money and comfortably affording my house I might start maxing out those contributions instead of contributing the paltry sum that I am now.
-He lives in marginal if not downright bad neighborhoods in order to have super-cheap rent and, later in the book, to profit in real estate. As a woman, I feel that I probably have to keep my standards for neighborhood safety a bit higher than the average man does. If the author ever had any problems with crime, he didn't write about them (except for a tenant who got mugged walking home one night and promptly moved out). If I wanted to buy property in the types of neighborhoods Corey lived in, I could do it tomorrow and with considerable more financial ease, but I'd be a terrified prisoner in my own home, afraid to go outside, and that's not an acceptable sacrifice to me.
-I really don't want to be a landlord. I know it's a great way to make money, but it's not for me.
-He eats ramen for lunch and bagels and peanut butter for dinner. Probably my biggest spending weakness is gourmet food, which I consider the affordable luxury in my life and something that is essential to my happiness (on some level, I realize that this is as unreasonable as people who need designer purses to be happy, since the only food I need to survive is some rice and beans). Gourmet food, if you will, is my vice (that and Diet Coke). Corey not only eats cheap food, he doesn't seem to have a single vice that cuts into his bottom line. His vice is being cheap.
Clearly, our personality differences give Corey the edge in saving money. But that's not the big issue. The main problem with the book is that this guy happened to be in the real estate market during the bubble and made his million before it burst with a combination of being a landlord and flipping properties. It's not that his tips and advice aren't solid, but I have little faith that he would have made so much money so quickly had he not been in the right place at the right time. Corey says that because his investments were diversified (real estate, stocks) he was in a position to profit from any market upswing and weather and downturns. Since real estate was skyrocketing, that's where he put his money. His investment accounts have relatively small balances throughout the book. Of course, the real estate bubble was a phenomenal event on par with the dot com bubble. In the absence of a runup in the stock market or real estate, I wonder what tactics the author would have pursued to make his million. Would it have even been possible?
Since the real estate bubble has burst, this story doesn't provide a model that most people can follow. It's also notable that the author is often single during the book and reportedly sacrifices some relationships because of his frugality. When you have a serious significant other, you have less freedom to do the sorts of things that Corey did with his time and his money. If I worked 80-hour weeks away from home, it would be nearly impossible to sustain a relationship. While many millionaires ascribe their success to their supportive spouses, I would say that in Corey's case, being single was integral to his success. It allowed him to do things like live in a windowless room in a house with six roommates. Had he been married, such an arrangement would probably have been a major strain on the relationship.
That being said, I do admire the author's determination, work ethic, and willingness to make sacrifices. The book was still an enjoyable read that made me feel inspired to find more ways to reduce my own expenses and made me more determined to buy a fixer-upper home priced way below market. I still don't know how to become a millionaire in seven years, but since I seem to share many personality traits with the author, I still have faith that I might find my way to riches sooner rather than later.
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