Using college to set yourself up financially afterwards

Like so many other people, I will admit that my four years in college was a time where I was trying to figure out a lot of different things. Some of these included what I wanted to study, what I wanted to do after school, what I could do to be good in sports, and what I could do to find an attractive woman. I was an 18-year kid when I left for college and finished as confused as ever about what I wanted to do and where I wanted to do it.

But for those who know what they are doing and have a feel for life after college, it is a time where you can really set yourself up financially for the rest of your life. I am going to tell the story of a former teammate and friend of mine who did a fantastic job of putting himself into a situation that will help him for the rest of his life.

My friend, Mike, was always a business savvy individual who had his head on straight. He was a good athlete in high school and maintained good grades. When he went to college, he actually ended up playing basketball for three of the four years and was able to do that on top of his school and other ventures.

During the summer when I was not making much money and spending way too much time on athletics, Mike was putting in a great deal of time delivering beer for a company near his parents’ home. He loved basketball but was focused on helping himself by putting money into his pocket. Not everything is about money but there was a reason why he was doing what he was doing.

After graduation, Mike found a good job near his school working in sales. Because he had worked so hard over the summers, he had enough money for a down payment on a house. It was 2003 so the interest rates were absurdly low. He was able to buy a house, lock in at a low interest rate, and enjoy his new career.

But because Mike had learned from his older sister about rentals, he decided to take on roommates that he knew from college. There were a number of people still working in the area from school so he was able to hand pick who he wanted to live with. Mike was smart about this was well and wouldn’t pick the slobs who would trash his house. He picked the dependable ones who would help him make the house payments.

Mike eventually went five full years without having to pay a cent for the mortgage himself. Let me state that again. From buying the house in 2003 until now, he did not have to make any payment at all towards the mortgage. The income that he made from renting out rooms allowed him to live rent free during that time.

What makes this story even better for him is the fact that he was earning a great deal of money from his job. He ended up getting engaged in the winter and is putting the finishing touches on building a brand new house in an expensive neighborhood in the same city he has been living in. Mike knew what he was doing early on and that helped him capitalize on it. The money that he saved over that five year period puts him in a great position for the rest of his life. And at the age of 27, he will be living in a brand new home that probably would cost around $400,000.

So for those college students out there that may be reading this or stumble upon it in the future, this is definitely something that you could use as motivation to work hard at a younger age. A few notes that I feel need to be included regarding this story.

• You really have to know where you want to live during that time period to do something like that. If he had bought a house and then wanted to move, he would have been hurt by the market.

• I believe his parents did loan him a small amount of money to help him with the down payment. He also has a dad who is very handy and that allowed him to do a lot of different improvements around the house.

• Mike also needed friends in the area that he could trust with his property. I think it would be much harder buying a house and then putting an ad in the paper wanting roommates. You just never know what you will get when that happens.

• The house was somewhere in the range of $100,000 (The Midwest is cheap) so my guess is that the mortgage cost around $700 per month. Doing this saved him $42,000 in mortgage payments over that time. He also gets depreciation and other tax benefits as well from being the owner.