This story is part of CNBC Make It's Millennial Money series, which profiles people around the world and details how they earn, spend and save their money.
At any given time, Terrence Bilodeau can tell you his exact net worth.
The 35-year-old real estate appraiser based in Fort Worth, Texas, checks it monthly to see how far he is from his goal of $10 million. He's well on his way: As of January 2020, when CNBC Make It reviewed his finances, he's worth about $1.3 million, he says. He expects to hit $3 million in the next two to four years and $10 million by the time he's 50.
Growing up with a single mother, Bilodeau never felt financially secure, as the family struggled to make ends meet. Today, he views money as a way to make his life better. He invests most of his income in real estate and the stock market. The little bit of discretionary spending he does allow himself includes hiring landscapers to care for his yard, a housekeeper to clean his house and a monthly membership to a local spa where he gets massages. It's worth it, he says, so he can spend what little down time he does have with friends and family, or just relaxing, he says.
Not that he has much. Bilodeau works seven days a week running his business, and he never takes vacations because he doesn't want to lose any income. Any time he takes off is time he's not getting paid. He plans to relax once he achieves more of his goals, which includes someday starting a family.
Here's a look at how Bilodeau built his career in real estate and how he spends his money.
Bilodeau brought in a combined $370,000 last year as a real estate appraiser and realtor, and paid himself a salary of $280,000 from those earnings. As an appraiser, he works on behalf of banks to determine current and accurate property values.
His income is largely determined by how much time he puts in because he works for himself and charges per appraisal. Appraisals typically cost about $450, but he charges up to $2,500 for complex projects. The most he's ever billed in a month is $50,000, but most months it's around $30,000.
Bilodeau works between 65 and 75 hours a week, writing up appraisals during the weekdays and driving to sites on the weekends. On Saturday and Sunday, "I can get to a lot of houses really quickly with no traffic," he says. "It makes me more productive."
He never expected to earn so much in this business. He first became interested in the occupation nearly a decade ago when he was working in insurance and finishing up his marketing degree at the University of Texas at Arlington. He was unhappy with his job and couldn't find any work in marketing, so when a friend invited him to tag along on a few appraisals, he jumped at the chance.
He enjoyed the work and began training under his friend to become a certified appraiser. In 2011, his first year as a trainee, Bilodeau brought in just $17,000. But he knew he could do better. He set a goal to grow his income to $80,000 a year, which he exceeded in 2012 when he started working for himself.
"In my first year, when I billed $145,000, I was pretty happy with the outcome," he says. "I thought, There's really no ceiling. I can work more hours and get more work from more clients and charge higher fees. And that's what I did."
Growing up in Florida, Bilodeau's circumstances looked starkly different. His mom moved the family around a lot and "there were times when we didn't have enough money to pay rent or utilities or our electricity would get cut off," he says. They moved to Fort Worth a few times to stay with his grandmother, and Bilodeau's mom and sister currently live nearby. He ended up returning to Fort Worth by himself when he was 19 at the suggestion of his uncle, who wanted Bilodeau to get into building houses with him. Bilodeau still hopes to go into building in the future.
He struggled with his weight and body image as a teen, which affected his confidence in everything he did, including school. "In middle school and high school, I didn't have good grades," he recalls. But around the time he was 18, he decided to start losing weight, and ended up losing 90 pounds.
As the pounds came off, his confidence grew. "At the time, a lot of people said it was difficult to lose weight," he says. But once he did, "I thought, If I could do something that everybody thinks is so difficult, then there's probably other things that I can accomplish."
That inspired him to give school a second chance. He left his job at RadioShack and got his GED (he had dropped out of high school in 10th grade). After that, he enrolled in Miami Dade community college and eventually finished up his bachelor's degree in Texas.
When Bilodeau exceeded his $80,000 goal during his first year working for himself, he wanted to celebrate by buying himself a Tesla. But the bank wouldn't approve him for a loan because he didn't have enough credit history.
Instead, he used the cash he had on hand to buy a second home to use as his first rental property. Even then, he knew he wanted to buy more. He had met people who owned dozens of rental properties, bringing in thousands in passive income, and he wanted to do the same. As of January 2020, he owns 12 properties, including the house he lives in and one vacant lot, worth about $2.8 million altogether, and he has about $1.7 million in real estate debt.
His ultimate goal is to bring in $250,000 a year in passive income from real estate. Originally, he aimed to own 50 homes, but after doing the math, he realized he could meet that goal with just 20. Owning more would be too cumbersome, he says.
As of June 2020, he brings in around $15,500 per month from rent on his rental properties, which is slightly less than last year when he made $15,800 a month. Because of the coronavirus pandemic, "I reduced rent to keep some tenants in place and to make sure to attract tenants quickly," he says.
After paying mortgages, property taxes, homeowners insurance and other expenses, he nets just under $2,000 a month from the properties.
Another perk of being a landlord is that tenants sometimes turn into clients when they decide to buy their own homes, Bilodeau says. One former tenant hired him to help her buy her first home for $640,000, and Bilodeau earned a 3% commission.
Although Bilodeau works for himself, he keeps his business and personal expenses separate. He works with his accountant to come up with a salary to pay himself each month: a $10,000 pre-tax salary plus $10,000 in dividends.
He also gave himself another $40,000 at the end of 2019. "I had too much money sitting in my business account and wanted to make it available so I could trade more [stocks] in 2020 rather than have it sitting," he says.
Here's a look at how he spends his monthly income, as of January 2020. This includes just his personal expenses, not what he puts toward his appraisal business or the mortgage, maintenance and general expenses of the rental properties.
- Investments: $5,000 (Bilodeau puts money in the market each month to buy and sell options and tries to see if he can grow his initial investment. If he earns enough, he'll pull it out and use the money to buy another house, he says. He has about $140,000 in a brokerage account.)
- Mortgage and utilities: $2,195 (The mortgage for the house he lives in is $1,840 per month and utilities run another $355, which includes Wi-Fi, gas, hot water and electricity.)
- Insurance: $1,077 (includes health, car, life, disability and an umbrella liability policy)
- Food: $1,000 ($250 on groceries and $750 on meals out)
- Debt repayment: $500 (He's currently carrying balances of about $1,500 at Home Depot and $3,000 at GreenSky air conditioning, and pays the minimums on those debts each month. He plans to pay off the rest of what he owes in full when the 0% interest periods end in spring 2020.)
- Miscellaneous: $299 (includes landscaping and housekeeping for the home he lives in, as well as dental cleanings)
- Phone: $240 (covers service and hardware for both his and his sister's phones)
- Gas: $213
- Subscriptions: $207 (includes Netflix, Amazon Prime, Hotworx fitness center, a gym membership at Texas Christian University, Investors Business Daily and monthly massages)
- Pet expenses: $42 (covers food, treats and litter for his cat, Audrey.)
Because Bilodeau works for himself and owns so many properties, having proper insurance is key. His $881 monthly life insurance payment includes disability insurance, term life insurance and multiple universal life policies. It has a cash value worth $37,000, and the death benefits would pay out enough to cover all of his real estate debt. Bilodeau acknowledges that he probably could have found a cheaper policy, but he is content to stick with what he has for now. His umbrella policy provides extra liability coverage in case anything happens at one of the properties he owns.
Bilodeau doesn't have traditional health or dental insurance. Instead, he pays $45 a month to Christian Healthcare Ministries, which provides catastrophic coverage, and he covers his bi-annual dental cleanings out of pocket, which cost $175 twice a year, or about $29 a month.
Bilodeau contributes to a SEP IRA account to save for retirement and as of January, he planned to put in $40,000 for the 2019 tax year. Any extra money he earns stays in his business account to help cover unexpected expenses. He doesn't like to keep cash on hand for personal use, though, which means he doesn't have a traditional cash emergency fund. He'd rather invest it in stocks or real estate so that the money is working for him.
Since the beginning of the coronavirus pandemic, Bilodeau's business has remained stable. "There has been an increase in demand for refinancing as interest rates have declined," he says. Additionally, he's seen a ton of new construction sold throughout the pandemic, which all need appraisals. "I get more calls to do appraisals than I can service," he says.
His personal expenses have shifted a bit: He bought a new car, an Audi, and he's gotten more into trading options on stocks because of the current volatility. Before, he invested about $5,000 each month and tried to see if he could grow it. Now he only contributes around $2,500 per month since he's already managed to earn such a high return. In 2020, he expects to bring in as much from trading as he does from appraisals.
As he continues to work toward his goal of a $10 million net worth, Bilodeau keeps setting the bar higher and higher. Looking back, he says he wishes he'd known earlier on that money is easier to make than you think. "I learned that by watching other people and seeing their success and realizing that I can mimic that success myself," he says.
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