What started real estate
A man from Frankfurt began investing in real estate at the age of 24 - today he no longer has to work
At the age of 24, very few people think about what the rest of their life should look like. Many have just started their first job, some are still studying, most live in a shared apartment or in a one-room apartment. Who has the nerve to worry about where they will be in 20 years?
So Jan Henning was a little different from other people his age, at least in this respect. Today the 42-year-old is a wealthy privateer, owns several properties and spends the winter in South Africa. He no longer has to work if he doesn't want to. He actually owes his pleasant lifestyle to a decision he made when he was 24. He was working in retail at the time and decided to spend the next 20 years in such a way that he would be financially independent by the age of 40.
“When I was in my early 20s, I really worked a lot, earned a lot of money, but immediately spent too much. That didn't make me happy, so I knew I had to do something differently, ”Henning said in an interview with Business Insider. He asked himself: How do you manage to make money without doing a lot for it? How do you get a passive income?
Passive income through real estate
At the beginning of 2000, Henning began to deal with financial investments and investments. He read several books, including Bodo Schäfer's “In seven years to the first million”, and finally became aware of the subject of real estate.
When he had to move to Kassel for work, he bought his first apartment there. He renovated it and initially lived in it himself. Then he was transferred by his employer. Since it was his job at the time to open new branches for a retail chain, he had to keep changing locations.
“But I kept the apartment and rented it out.” And that's exactly the principle he wanted to continue every five years afterwards. Moving to a new city, buying an apartment, renovating it and sublet it. In this way, he calculated, one could buy four apartments in 20 years and live only on the rental income.
He roughly put this plan into practice - only that he now owns 25 rental properties. In recent years in particular, he has bought a lot thanks to the low interest rates, sold his Kassel apartment for a profit and reinvested the profit.
"You just have to start saving and investing early enough"
He firmly believes that just about anyone can build a passive income so that they no longer have to work. In his opinion, a starting point of 2,500 euros gross income is enough to apply for a loan and buy an apartment for around 150,000 euros. “You just have to start saving and investing early enough. Because wealth accumulation and passive income take time. ”You have to reckon with at least 15 years before you really have a passive income on which you can live.
In order to save money and pay off his loan as quickly as possible, Henning set himself high savings rates at the age of 24. “It is best to set up standing orders on your salary account so that you have less available at the beginning of the month. In the end you don't miss it at all. "
He also changed his lifestyle. When he figured out where all his money had gone, he noticed that he had always invited his friends - who, unlike him, did not work and earned money, but were still studying. He got used to that too. Instead of indulging in a luxury trip, he preferred to go on bike tours (a travel preference that he has maintained to this day).
Above all, however, he developed a different relationship with consumption. “You always feel best at the moment when you have just paid for something and receive the item. After that, the feeling of happiness and satisfaction decrease continuously. If you look at that, you also stop spending money unnecessarily. ”He only used the annual tax refund to reward himself and treat himself to something.
Most of them know too little about passive income
Despite his good income, Henning refrained from living in luxury and bought several apartments in the following 15 years, including an apartment building in Frankfurt. Incidentally, he still lives in a rented apartment.
In 2010 he decided to start his own business, completed training as a financial advisor and then as a financial broker in order to pass on the experience - supplemented by the necessary specialist knowledge - that he had built up himself over 15 years with "learning by doing".
He liked to ask his clients how long they would like to work. "Most of them then say '65 or 67, as prescribed by the state '. This shows that very few people think about alternative life plans. We are told by our parents and grandparents, but also in school and training, that we have to work until we retire. "
Investments pay off after 15 years
Above all, however, he tells clients that you can't start saving and investing early enough. On the one hand, according to his experience, the time factor is totally underestimated because many would be blinded by the stories of self-made millionaires and think that one could get rich within a few years. On the other hand, too many would indulge in the mistaken belief that you can only get rich by saving.
“If you invest 1,000 euros a month, you will develop assets of around 500,000 euros in 20 years, and with a return of 5 percent you will have 25,000 euros in additional income annually. Some people have to work a lot for that. ”With real estate investments, you would build up more wealth every month. Of course, you also need patience here: "Investments only really pay off after 12 to 18 years when compound interest is added."
And that is exactly the case with him now. That is why he is a full-time privateer and only looks after his old customers. He is currently on parental leave in Cape Town for the winter. His wife would like to go back to work in the summer, so the family will go back to Frankfurt.
Also read: "A man who became a millionaire through real estate says: That's why most people never get rich"
“The good thing about it is that you can work, but you don't have to,” says Henning. Maybe he'll look for a new project after his return from South Africa. He advises everyone who is in their early 20s and how they want to be financially independent in their early 40s: “Go to a real estate website and look for an apartment for 100,000 to 150,000 euros, read a little about the topic and exchange ideas in forums . Just do it. "
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