An American Nightmare

[Ami Sapir]

My name is Ami and I have made a pretty  big mess of things. Here are some details of my life:

- Sales Manager of a sales team in the IT universe earning about $85k/yr

- Wife has an office job paying her $60k/yr

- We owe $304k on a SFH worth $350k in Forest Park IL

- We lease two cars for $682/month

- We have $43,000 in high interest consumer credit card debt

- Our monthly expenses total about $6500/month all in not including debt repayment

Up until my eyes being opened I thought they we were living the American Dream and had a bright future ahead of us. Then I actually started to look at our future. Once I really looked I realized that we were fooling ourselves and headed for ruin or becoming a burden to our children one day, we decided to completely change our ways.

We have recently gotten a hold on our spending and have started very aggressively paying down our credit card debt (using the avalanche technique) and putting all available funds and any bonuses I make into becoming debt free or the consumer debt. We estimate that it will take us 24-30 months.

We will then take 12 months to build up our initial $25k that Scott Trench suggests in Set For Life (an amazing read)

Once we have the $25k ramp up money we intend on starting to build positive cash flow through BRRRRing and actively looking for cash flowing small multifamily homes.

The eventual goal (as is for everyone here) is to achieve Financial Freedom within 10-15 years.

We intend on spending the next two years during our debt repayment period educating ourselves on every aspect of this amazing world that you are all in. Our goals are to learn from and meet:

- People that have succeeded in REI

- Realtor to work with

- Contractors to work with

- Real Estate Investors

- Real Estate professionals (Lawyer, Accountant, Title etc.)

In the mean time we are learning to analyze deals so once we are free of our debt we can hit the ground running.

ALL THAT BEING SAID I MIGHT BE (AND PROBABLY AM) COMPLETELY WRONG AND OUR PLAN MIGHT BE CRAP. 

I love learning from the people who have come before me and I know in my heart that many different roads can lead to Financial Freedom. What I am hoping for is for different opinions and perspectives on our path, this community amazes me and I feel lucky to have found it.

Thank you all for reading this horribly long post

[Matt Mason]

@Ami Sapir,

The good news is that you and your wife together have a pretty nice salary and you realize what you need to do.

Can you move the balance of your credit cards to a zero interest or low interest card for at least a short time?  With 2 decent jobs, I would think you would be able to juggle it around to lower the interest rates.  Paying that off should be your mission in life for the immediate future, which it seems you realize.

Can you buy a used car or two once your leases are over?  I hate seeing those big car payments, because they usually come with big insurance payments too.  On a lease you will always have that car payment too.  Cars are so much better made now than in the 70 and 80's, to me there is no reason why not to drive something older unless you have millions in the bank.

In the meantime as you are paying off your credit cards and building your finances, you can read real estate books, go to your local REIA, talk to others (especially experienced successful investors) and build a strategy of what you want to do once you are in a financial position to invest.

I wouldn't be in too big of a hurry to jump in as now isn't the greatest time anyway and you need to spend the next couple of years building your balance sheet.  Don't worry about the past as there is nothing you can do about that.  Also, most Americans fall into this trap so don't feel bad.  Continue to set goals going forward and I'm sure you will be in a great position after a little while.  I think you have a good starting plan and are going to be on the right track.

Good luck.