Financial advisors insist that adopting a save and invest mindset early maximizes your chances of building long-term wealth. But even many money professionals would consider Cody Berman an extraordinary case.
At 19, after reading “The 4-Hour Work Week” by Tim Ferriss, Berman says he had an epiphany about his financial goals. “I thought you made money once you got a big corporate job,” he says. “[The book] broke all that money mindset for me. It made me realize that you can spend your time creating passive income streams so that you no longer have to trade your time for money on a linear basis.”
In short, Berman became a follower of the “FIRE” movement – short for “financial independence, early retirement”. The main principle: by saving aggressively, investing regularly and creating multiple sources of income, you can give up the 9 to 5 life long before the age of 65.
But because it started early, there was little ditching to be done. Berman, now 26, has barely set foot in a cubicle since he started pursuing FIRE at 19. “Since that moment, all the gears in my brain have been rewired to start thinking that way,” he says. “And it’s been a crazy journey ever since.”
These days, Berman makes about $30,000 a month in “mostly passive” income. Last year he reached his FIRE number, having earned enough money to never work again if he wanted to. He estimates his current net worth at $1.3 million. Here’s how he did it.
He took advantage of his advantages
One of the benefits of embracing the FIRE mindset early on, Berman says, was avoiding some of the financial pitfalls that many young people find themselves falling into. “When a lot of people are 22 or 23, they can have the house they shouldn’t have, or buy the fancy car with the money from their first job, or go into more student loan debt with a degree they may not have needed,” he says. “I was lucky to avoid all that.
In fact, Berman was lucky enough to avoid student debt altogether. He attended a four-year public college, and he and his parents split the $10,000-a-year bill (reduced through several scholarships), mom and dad paying two-thirds, Berman working to pay the rest. . He completed a bachelor’s degree in finance and economics in 3 and a half years.
Not incurring student debt got Berman off to a solid financial footing, and he maintained that momentum by keeping costs low. In college, he lived in a 6-bedroom house with seven other guys, a convention that kept his living expenses at around $450 a month. When he finally moved to Boston after graduating, he shared a room in an apartment with a friend and paid $675 a month in rent.
Video by Stephen Parkhurst
He increased his income and helped build a lucrative business
Berman graduated from college in December 2017 and spent six months traveling with his girlfriend in Australia, where he began picking up a collection of online secondary agitations focused on the FIRE movement. He started a blog, “Fly to FI” and an associated podcast. He picked up freelance writing, email and advertising gigs.
The following June, Berman began work as a commercial real estate analyst. His low cost of living allowed him to bank $35,000 between secondary hustle and salary money in seven months. And since Berman was only spending about $1,000 a month, he found he had the leeway to quit his job and go into full-time entrepreneurship.
So he quit and started working. In the months that followed, he went on a book tour with “Financial Freedom” author Grant Sabatier and discovered what would become a mainstay of his income: the sale of “printables” – products such as calendars and Christmas cards that customers can purchase and print on their own – on Etsy.
Video by Courtney Stith
“I opened my shop in 2018 and a few months later I started creating a bunch of random digital products like calendars, planners and invitations. I had a big week where I made 800 $ with a few of these products I had created.” he says. “I was like, ‘Holy shit, this is actually a viable hustler.'”
He got the idea from fellow hustler Julie Berninger, and in 2019 the two teamed up to launch Gold City Ventures, which started as a business that offered online courses in blogging, creating Etsy shops, and selling printables. Last year, the company achieved a turnover of 1 million dollars.
He continued to invest aggressively
Between the courses he sells through his business as well as through other digital products such as e-books (his bestselling volume teaches strategies for selling seasonal products), Berman currently earns around $24,000 a month in income.
Throughout his relatively short career, he constantly diverted excess cash into investments that could increase his wealth. Berman and his fiancée purchased their first rental property, a three-family home in Massachusetts, in 2020. “We lived in the one-bedroom, one-bathroom basement and rented the duplex at the floor,” he said. “So we were making money in that living situation.”
Video by David Fang
Later that year, they purchased another duplex in Connecticut, and in May 2021, they added a three-family home near their first rental property. They currently live in a one-bedroom, one-bathroom Massachusetts ranch home, the smaller of two homes on a property that also includes a 4-bedroom, 2-bathroom home with 600 square feet of space. commercial office space, which they rent.
“And then, very recently, we closed an Airbnb property, kind of a luxury vacation home that we’re going to rent out,” Berman says. “At this point, in total, we have acquired 12 gates” – real estate investment lingo for units. Currently, his real estate investments are bringing in $6,000 per month in profit.
Despite the robust revenue, Cody still keeps his expenses down. He estimates his annual cost of living at around $40,000. Where does the rest of his income go? A large part is devoted to investments.
Last year, he contributed the maximum $20,500 as an employee into a Solo Roth 401(k) and hoarded an additional $40,500 of after-tax money as an employer using the so-called the “mega Roth backdoor,” which works by post-taxpayer money into a traditional account and rolling the money into a Roth account.
Video by Courtney Stith
“So far I’ve tried to max this count first,” he says. “With the rest, I save for down payments on properties, pour money into brokerage accounts, and also keep a healthy, yet risk-tolerant amount in crypto.” He says the latter represents about 5% or 6% of his net worth.
Altogether, his total net worth currently stands at around $1.3 million.
Berman attributes his rapid wealth growth to one key factor: passive income.
“There are so many people who have the opportunity – who are young and have a lot of energy and ideas, but they’re not taking advantage of it by creating this course or this ebook,” he says. “The most powerful thing in my story is that I was able to do it, and I’m not a lawyer or a consultant making that kind of money. I sort of outsourced everything.”
More from Grow:
Comments are closed.