Before I start talking about the strategy itself there’s another important detail about my personal starting point on this journey: in financial terms I had (almost) nothing.That’s the perfect starting point because when you start with nothing, there’s nothing left to lose.
I lived in a rented apartment. I had no savings account. I owned nothing of real value but two aging cars that had both been given to me by friends and family. On the upside, I wasn’t fighting a mortgage and I had no student debt.
This complete lack of assets may seem like a bad thing for somebody in their 30’s but in the bank hacking game it’s actually exactly where I needed to be. If I had owned part of a house or had other assets worth real money then the banks would have had something to take from me. Since debtor’s prison is no longer a reality (Unless you owe money to the IRS. Pro Tip: Don’t owe money to the IRS) the one thing that banks can do to you is take your stuff. Since I had very little stuff their options to take it or put liens on it weren’t plentiful. Nobody puts a lien on an 8-year-old microwave.
Let me get on my soapbox here for a moment: my generation needs to completely ignore the older folks who tell them that rent money is money wasted. What a renter is buying with that extra cash is career options and flexibility. If you rent you can go where the jobs are. If you are a renter then housing market crashes have a lot less impact on your financial well-being. As a bonus, you don’t have to worry about termites, major appliance malfunctions or zoning laws because those are likely your landlord’s problem. Most importantly of all , for our purposes, the banks can’t come take away your rental.
Having very little of your own stuff can admittedly be a pain. In the twelve years that I’ve been a renter I’ve yet to deal with a landlord that wasn’t a bit weird on some level. Some property managers have been outright crooks and others have been just a bit kooky. Some chicanery from property managers has even lingered on my credit report — that’s the price you pay for future freedom.
If you’re a homeowner or if you own fancy cars or other real assets then these next few chapters may not be much of a help. But for those of you who own nothing like I did then you’re exactly where you need to be.
The next time that one great-uncle gives you a condescending talk about how you’re throwing your money away on renting and you need to be buying a house, remember that he’s completely underwater on his own mortgage and going to have to replace his roof and central air in the next few years. Then feel free to smile quietly to yourself.