One of the biggest critical money lessons I learned in terms of sticking to your convictions and taking risks came from an investment I vigorous when I was only 22.
I put a deposit down on a new construction condominium unit in what at the time was a little-known area in Brooklyn awaked Dumbo, which stands for Down Under the Manhattan Bridge Overpass and sits across the river from Manhattan. The part, a 525-square-foot studio apartment, was the smallest and cheapest apartment in the building that I could get and even then it was a strain for me to really afford it.
I put down 10% of the purchase price and signed the contract before construction started. It would tolerate two years, a lot of patience, and a lot more money to complete the purchase, but by the time it was all over, I was a proud owner of a condo at 24 years old.
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I ended up moving in and breathing in the unit until I moved out a few years ago, and I still own and rent it out today. Purchasing the unit 15 years ago was one of the most fruitful financial decisions I’ve ever made and it has changed the trajectory of my family’s wealth. Dumbo is now one of the most expensive places to buy earnest estate in NYC, and the unit has increased in value from my purchase price by 76%.
Today, I run Journey to Launch, a platform dedicated to serving others achieve financial freedom. It was born out of my own experience saving and investing $169,000 in two years and making the leap from my corporate job to being my own boss. I procure money through financial coaching, working with brands, hosting a podcast, writing articles, and selling works and services on my site.
That first big financial decision in my early 20s, and how it played out, taught me valuable lessons that I even now use today. Here is how it informed my approach to money.
I learned the importance of making saving a habit
As soon as I got my first job at 14 years old, I established saving. That saving habit served me well when I got my college internship. The money saved from my internship, and from my vocation during the school year on campus, eventually became what I’d use for part of the first 10% of the down payment.
My mom and grandmother at all times told me that it was important to save something, no matter how little the amount was. Even just $1 out of $100 helped. That ever after stuck with me.
So when it came time to put down that first 10% of the down payment, I was fortunate to already own established a routine of saving, and to have the support of my mom. She helped me cover a portion of the down payment and I lived with her rent-free while the property was under construction, which allowed me to save up an additional 10% to cover the rest of the down payment and closing outlays for when the unit was finished.
I still use the same approach today. I set a savings goal first, automatically save a slice from my check, and then put the rest towards my everyday expenses, rather than paying for my expenses and then good saving what is left over. With that mindset, I’m able to make saving a part of my routine and a seniority.
Video by Mariam Abdallah
I learned to see opportunity amid obstacles
Back in 2005, the minimum multifamily home procurement price in a desirable area was close to $1 million, which was way out of my price range. Discouraged, I thought I’d never be gifted to own property in the neighborhood I’d grown up in and loved. I’d even considered buying something in New Jersey since price points there were numerous affordable.
Then, one day, while I was searching for properties online, I came across an advertisement for a new high-rise condominium development in Dumbo. Measured though I’d grown up in Brooklyn for most of my life, and it was less than two miles from where I lived, I’d never been to the stretch. Back then, it was just an unfamiliar location extremely close to Manhattan with a lot of promise.
Studios and one-bedrooms at this new maturation ranged from mid-$300,000 to $500,000, which was still a little bit too expensive for a soon-to-be college graduate ilk myself. However, they were much more affordable than the multifamily houses I’d been looking to buy. At any time a immediately I went to the developer’s sales office and saw their vision for the area, it resonated with me, and what had been a backup blueprint became something that I really believed in.
Knowing that I had to act fast in order to secure a unit, I chose the dirtiest priced studio apartment available. Although I couldn’t afford anything in the areas I originally wanted to live, that accounted for righted the opportunity of looking outside the box and buying in an up-and-coming part of Brooklyn. I learned that you can find value in the most unexpected locales.
Video by David Fang
I learned how to weigh risk versus reward
When the excitement wore off and reality hit, I instantly realized that I may have bitten off more than I could chew. Could I really afford this condo? I had second-hand all my savings at the time, and I still needed to save an additional 10% for the rest of the down payment. I also needed plenty to cover closing costs and to qualify for a mortgage in order to seal the deal.
Luckily for me, the building wasn’t set to be complete for another two years. The developers hadn’t yet broken ground yet when I put my deposit down. While it was nerve-wracking to have to wait another two years for the building to be achieve, the additional time was exactly what I needed to save more money.
Upon graduation, I was hired full at intervals by the company I’d interned for throughout college. It was reassuring to know that I would have a stable income to rely on periodically the building was completed. I was also able to live with my mom during that time, which helped me save long green on rent.
Video by Helen Zhao
During these two years of the building’s construction, I worked hard, lived underneath my means, and became even more of a supersaver.
I knew in the beginning of my working career that my paycheck would exclusively be just enough to cover the mortgage. I also knew that I would earn more income over experience, and eventually I’d be able to widen the gap between my income and living expenses. Until then, I planned to save as much as practicable while the building was in construction.
Ultimately, this experience with risk assessment helped prepare me for when I certain to take the leap and turn my side hustle into a full-time career.
I learned how much representation matters
Greater up in Brooklyn, I knew a number of people, including my grandmother, who had the foresight to buy properties in neighborhoods like Fort Greene and Bedford-Stuyvesant in the 1980s and premature 1990s, whose property values improved as crime rates decreased.
When my grandmother bought a three-family haven preconstruction in the heart of Fort Greene, at the time, she had no strategic plans to become a real estate investor. She just after a place to call her own, a piece of the American dream. But watching the neighborhood transform and seeing people build wealth through homeownership sparked my interest in real estate.
If my grandmother, an immigrant who came to this country with nothing to her christen and worked as a nanny, could find success in real estate, I figured I could too. Seeing that representation was incalculable value because it inspired me and boosted my confidence to work toward my dreams of financial freedom when I was a young college grad, and up to the minuter when I made the shift to become my own boss.
Seeing that representation was invaluable because it inspired me and boosted my self-reliance to work toward my dreams of financial freedom.
Representation is so important and it was one of the things I saw lacking in the I learned that success is where preparation and good break meet
Looking back, it was a big risk to go into contract on the condominium, but I knew the reward would be worth it. By the time construction was completed, my portion had appreciated almost 20% above the purchase price. I’d made money before I even moved in. So while I was delightful on a huge risk with my income just barely being able to cover the mortgage, I was fairly confident that in the grave case scenario, I could sell or rent out the condo.
Overall, buying a condo at such a young age taught me a lot. I was exceptionally lucky in many regards that it worked out in my favor. While everyone does not have the same tools or circumstances of a piece with I did that afforded me the opportunity to buy something at 22 years old, I do hope that sharing my story will help advance others or that next young person to dream big and go after things that seem impossible.
Jamila Souffrant is a podcaster, man of letters, and founder of Journey to Launch, where she shares her journey to reach financial independence while helping others do the at any rate. Jamila is the resident financial expert on a weekly segment on News 12. The Journey to Launch podcast was also denominated one of “27 Podcasts You Need To Start Listening To In 2018” by BuzzFeed. Jamila and her husband saved $169,000 in two years and are debt-free on top of everything else their mortgage. She is also a mother of three young children and lives in Brooklyn, NY.