DR 104: Rags to Riches and Back Again–Interview with Million Bucks by 30 Author Alan Corey

Optimized-Rags to RichesIs it possible to build $1 million in net worth in 10 years starting from scratch? In today’s interview with Alan Corey, author of A Million Bucks By 30, we’ll learn exactly how one man did it. I learned about Alan and his book from a listener named Natalie, who I had the pleasure of interviewing for podcast 87. Natalie is the one who graduated form college debt-free, paid cash for a car, and bought her first home just out of college. During the show, she mentioned that A Million Bucks By 30 is a book she’d recommend.

I bought the book, read it, and liked it. So I emailed Alan and asked him to come to the show. In this podcast, we hear details of Alan’s rags-to-riches-to-rags-to-riches story. It’s a fascinating ride, and he tells us just how he did it.

Topics Covered in the Interview

  • Alan’s first apartment in the New York projects
  • How Alan divided his income to save more
  • How to live on 20% or less of your income – in New York City!
  • One way to purchase real estate
  • How Alan made $1 million – and then lost it all again
  • How Alan came back from his losses

Resources Mentioned in the Interview

Rob: Alan, welcome to the show.

Alan Corey: Thanks for having me.

Rob: I appreciate you taking the time to talk to us today. I mentioned to you before we started recording that another person I had interviewed mentioned your book, A Million Bucks By 30 so I bought it and read it and thought it was a great story so I reached out to you and you were kind enough to come on the show. So, I’m very grateful. Why don’t we start by giving folks just a little bit about who you are so they know who Alan Corey is?

Alan Corey: Sure. Maybe I’ll start in with what the first book was about. It was my journey from graduating college in Georgia. I moved to New York as soon as I graduated, with no money, like a lot of college kids. I was instantly surrounded by wealth everywhere in New York. I just felt like everyone had a lot more means than I did, so I made it my mission to try to make a million bucks by 30. I made that goal when I was 22, and had a $40,000 job. I kept that job and held it for about 6 or 7 years, and I was able to reach my goal. The investments worked out quite well.

Rob: Okay. You said you made the goal of making a million bucks by 30, at age 22. Is that also the year you moved to New York City?

Alan Corey: That is. Yes, yes. The thing about New York—people come to New York to become rich and famous or whatever their dream is. They’re searching to dream their dream, and New York’s a great place for that, and I just knew that was going to be my dream and that was why I’m here and that was my mission— to do whatever I can.

I made that declaration when I was living in an illegal sublet in a housing project in Spanish Harlem… That’s as far away from a million bucks as I’ve ever been before.

Rob: When you were 22 and moved to New York City, did you have any debt at that point?

Alan Corey: No, no. There was a great scholarship program I was able to get here in Georgia. I had a part-time job all the time throughout college, so I was able to save money. I left college with no student loans and I had saved $10,000 of my own money that I basically spent to move to New York and get settled in New York.

Rob: So when you hit New York you had no debt, but you also had basically no assets to speak of?

Alan Corey: Right, exactly.

Rob: You made a comment that you’ve always been a saver?

Alan Corey: Yeah. So, actually to tell you about my book, A Million Bucks by 30, it’s about how to overcome a crappy job, stingy parents, and a useless degree. As for being stingy, I think I just picked it up from my parents. They were always penny-pinching and looking for a deal. Always saving.

I think it really imprinted on me at a young age to be  really careful with your money. They would not ever give me a money, I always had to earn my own money. So, they taught me how to do that, so that was overcoming the stingy parent part.

Rob: So did you work during high school?

Alan Corey: I did. A lot of my friends would be getting extra money from their parents. My money was all I had to go on. I worked at Chuck E. Cheese. That was my high school job, and then I was a lifeguard for a little bit as well. So that’s how I made my scratch so I could go to movies with my friends and whatnot.

Rob: Yeah, my memory of the Chuck E. Cheese we were at was when was our daughter very, very young. We took her there and she was scared to death of it.

Alan Corey: Yeah, I can see that. I’m six-foot three and in that costume with the big ears I couldn’t fit through the doorway so I was just a towering rodent walking down the hallway. I made plenty of kids scream.

Rob: Right, right. Your parents watched their money. You learned it from them. You worked in high school. You saved money. You graduated from college with no debt. Why the goal of the million bucks by 30?

Why $1 Million By Thirty?

Alan Corey: That’s a good question. I guess that’s what I thought I needed to live the lifestyle I wanted or get the girl I wanted to get. Whatever I envisioned myself eight years down the road when I hit 30. What do I want to be? So it’s just kind of what I envisioned for myself.

And I was aimless. I didn’t plan leading up to that. I feel like I was just going nowhere fast so I decided, “Well, why not aim for the sky?” If it happens, that’s great. And if it doesn’t happen, I’m pretty sure I’ll be in much better financial shape than I am now. So I just set out to learn as much as I could about stocks and real estate and investing principles in general.

Rob: Okay. When you’re making that goal, did you think to yourself, “If I achieve this goal— if I get a million bucks by 30, here’s what I want to do with it. Here’s how I want it to affect my life?” Or was it just something you saw as a goal? It gave you something to focus on, and that was pretty much as far as you thought it through?

Alan Corey: Well,  to be completely honest, I’ve always looked as myself as a writer first. So I thought, “That would be a pretty good book to read. And not only that, it would be a pretty good book to write.”

Rob: So you had the book idea right from the beginning?

Alan Corey: Yes, I had the book idea. That would be my reward. I would finally be able to get the book I want to write and get a book deal. Something like that. I mean, if I can achieve it, I think I have a good book in me. Now that you’ve asked, it’s all coming back to me. That was probably my true motivation for writing it.

Rob: Yes. For people to put this in perspective, you were 22 when you moved to New York City. What year was that?

Alan Corey: 2001.

Background on the Book

Rob: Okay. And I want to talk about the time you were in New York, but since you mentioned the book, let me just ask you this… You moved in 2001. You’re 22 and you want to be a millionaire in eight years. When did you start writing the book?

Alan Corey: Oh, after I became a millionaire.

Rob: Okay.

Alan Corey: Yes, so I didn’t start writing it, but I took mental notes along the way. Okay, I bought my apartment. I want to— If you read the book, you’ll see that I’ve put in what my financial plan was every single month, the  value of my apartment, what’s in my checking account, in my savings account, 401K. And every chapter shows every month of my life in those eight years.

So, I took those kind of mental notes of, “Okay, you have to remember this because it might be good for a book one day.” And also, it probably came from a standpoint that this is good to know if you end up in finance, it’ll help you be a millionaire by 30. I’ve got to always know what’s in my accounts now, such as tracking what investments are doing well and which ones are not doing so well.

It’s all kind of wrapped up in one where— To answer your question, I didn’t write the book until after I got a book deal and I didn’t get a book deal before I became a millionaire at 30.

Rob: Right, right, right. Okay, I’m just curious. How long did you take to write a book?

Alan Corey: About 6 months.

Rob: Okay.

Alan Corey: Yes, it was just sitting in the back in my mind for eight years. Like I said, I enjoy writing so it was pretty much an easy process for me.

How to Reach the Goal

Rob: Okay. So let’s go back a bit. You’re 22. It’s 2001. You moved in New York City. You had your goal. Did you have any sense at that point on to how you were actually going to achieve it?

Alan Corey: Not really. Basically, I first needed knowledge. I didn’t know where to begin so I just started devouring investment and personal finance books. I couldn’t get enough. I just tried to absorb as much information as possible. Then I started reading biographies about rich people and tried to pull any overlapping characteristics these people may have or any principals they may use over and over again.

I started getting the same information from every single book, so I pulled those principles and made them my blueprint to making a million bucks. And a lot of that is self-confidence. Really believing in yourself. Believing in the ability to overcome obstacles. Not just one obstacle or one hiccup or something looking to derail you.

Look at it without emotion. Really analyze the numbers just to make sure it’s not the end of the world. Most likely it’s not. It’s just a learning experience. Because if it’s not (a learning experience) you’re going to lose money from it again. It’s just, drive. A completely focused determination from the common characteristics that I decided I needed to have.

Rob: For folks who end up reading your book, they’ll see this in a lot more detail, but one of the things is you are a cheapskate, right? I mean, that’s kind of the theme of your book. And just to give people a sense of that, tell us about the first apartment you moved into when you moved to New York City?

Alan’s First New York Apartment

Alan Corey: Yes, sure. Obviously, coming from a small college town to something in New York, Manhattan to be exact,  I couldn’t afford much, and so I found the cheapest apartment I could possibly find. It was a friend of a friend referral and was an illegal sublet in a housing project in Spanish Harlem. I was paying $400 a month, and that included all utilities and everything. That was my first apartment.

And I didn’t see the time (being as naïve as I was) that I didn’t realize it was the projects when I was living there. No one in that building or anyone I ever saw spoke English. Everyone was Spanish speaking and I’m not— I  just thought it was like a cool-kat portion of New York and that this is what New York City is like. There’s helicopters overhead all the time. You hear gun shots.

That’s what I knew about New York from the movies, so I thought that’s how it was supposed to be. It took me about 9 months before I realized I was living in housing— kind of the bad part of town at the time. It’s turned around now, 10 years later. But yeah, I finally realized it when none of my friends would come and visit me or come by my apartment. I realized that maybe it was a unique situation I was living in.

Rob: Right. And during the time that you were in New York, what was the most you made from your day job?

Alan Corey: I’m sorry, I missed that. What’s that?

Rob: When you were in New York City, you accumulated the million bucks in the eight years that you were there. During that time, how much did you make from your regular 9 to 5 job?

Alan Corey: Yes, so I started at $40,000 a year. That was my starting salary as tech support. I think after taxes, I lived off about 16% of that, 20% of that. And I invested over 50% of my take-home pay. So from every single paycheck I put away as much as possible, and just lived off Ramen noodles and the cheapest diets and snacks.

I was definitely living way, way below in my means because with a salary like that—That may be a great salary in some places, but in New York it didn’t go in that far. And that is my only way. I couldn’t control my income. My boss controls my income. But I didn’t want that to stop me from controlling my outcome. So I knew the choice. That was the only way I could possibly increase my wealth was to invest most of the money I was making.

Rob: Were there times when living off of 20% of your income was harder than others? I mean, were there times when you felt like giving up thinking, “Is it really worth it? Maybe I should live off 50% of my income?”

Alan Corey: Yes, it’s always hard. It was a graduated thing. I would start at living off 20% my income and that was pretty easy— Sorry, not easy, but achievable. Then I would lower it to 19% and then 18%. I would go down as low as I could. And there’s times when I wanted to go out concert or to the bar or something like that with my friends, and I just didn’t know whether I could afford to do it.

But, like a lot of 20-year-olds in New York, a lot of my friends didn’t have money either so they were completely onboard with doing free activities. I’d still go out to the bar and just order water or I’d drink a tallboy at home before I left the apartment or something like that. I would not take a cab. All my friends would take a cabs. I would walk, take a bus or the subway. And so, I would still do what I wanted to do. I’d just be a little more inconvenienced by it.

Rob: Yes.

Alan Corey: I was paying myself for that inconvenient so to speak. That’s how I looked at it. I could pay for the convenient or pay myself for the inconvenience to walk an extra few blocks or going out a little later— maybe an hour or so later rather than the same time as everyone else just to save myself an hour’s worth of drinking. I tried to turn every single savings technique into a game for myself. I paid myself and my mind for all the things that were difficult.

Rob: Yes, in your book you talked about— I think you called the wallet blowout?

Alan Corey: Yes, billfold. Billfold blowout. Here’s the thing. I’m not a budgeter. I don’t like budgeting. A lot of my stuff will just automatically be deducted from my paycheck and things like that. And they’d all go into different savings accounts, checking accounts and 401ks. And so I can only spend what’s in my checking account. So with my checking account, what I decided to do is go to the ATM every Sunday morning and pull out $100, and that’s all the money I had for the entire week until the following Sunday.

So I didn’t have to budget because I knew I was only going to have $100 to spend that week. When I got to Saturday night, I would spend whatever that left is in my wallet. So if I had $20 left, I would go out and spend that $20, rewarding myself for staying on my budget. If I came to Saturday night I only had 25 cents  left, I would stay inside because I didn’t stay on my budget, and I probably wouldn’t be able to entertainment myself for 25 cents.

After I did that for a couple of weeks, the $100 was basically was more than enough, and I decided to challenge myself – so I went down to $90. From there I went down in $10 bill increments. So I got a $90 each week. After that I was able to survive $90 a week, every Sunday I’d take it down $10— so  to $80. Then maybe down to $70. I think I got down to the sweet spot which was probably between $60 and $70 a week. So I would do $60 one week and then $70 the next, and then $60 one week and $70 the next.

Rob: Yes, right. There’s another tactic you use that I like. You mentioned you have the portion of your pay direct-deposited into a bank account that was across town and you cut up your ATM card, so you basically made it hard on yourself to spend the money.

Investing in Real Estate

Alan Corey: Yes. Day one, I went into my HR and filled out those forms so that 10% of my income will go into the one account—I’m not sure about the numbers exactly, but it’s in the book. I can’t recall exactly, but whether it’s 10, 15%, would go into an account through an ATM that was right next to my apartment. That’s all I could ever see. Part of it would go to a different account across town that I knew would be very difficult for me to go—probably so hard that I would probably never do.

My goal of that was, I wanted to buy a piece of property, one time a year. And that was if I could buy a piece of property every single year, I feel like my goal would be achievable. And so, I would look—  January 1st, my New Year’s ritual would be to walk across town, across Manhattan and find that bank and wait in line. Give them my bank account number and get a statement on my balance.

Then, depending on the amount, I would use that as my down payment for a future property. So whatever that amount was, was basically 10% or approximately 20% down payment on a property. That would tell me what I could afford based on what I had each year.

Rob: Yes. I the book you talked about the real estate aspect of this. I know your first property was basically a one-bedroom apartment, and you had to borrow money from your mom, your dad and two friends in order to make it work. I think that was the property. Was that that property or the second property?

Alan Corey: That was the second property.

Rob: Okay.

Alan Corey: And so, yes.

Rob: That’s right.

Alan Corey: You want the details on my second one or the first one?

Rob: That’s right. It was the second property. Was it hard to ask these friends and family members for a loan?

Alan Corey: Yes and no. I mean, I would never have asked anyone for a loan if I knew I couldn’t pay them back. So I had 100% faith in what I said to them. And I showed them, “Okay here’s my 401k… what I have saved up. I could cash it out, but it’d be better if you could lend me the money. I’ll pay you interest on it, and I’ll pay you back within two years.”

So I had clear confidence. And if anything did happen—I lost my job or if I couldn’t— if  things we’re not good and I couldn’t do anything, I had backup plans. I had already accumulated some assets at that point where I would cash them out and pay them back.

Rob: Yes.

Alan Corey: And that was always my goal. I think it would have been different if I didn’t have their 100% confidence that I’d pay them back. And also the numbers made sense. So I bought the second property, which was an income producing property.

Basically there were two family units. I could live in one unit and rent out the other one. The way that the numbers worked, I showed them I would be making money and basically being paid to live in my own house, and that I would be able to pay them back within two years. Actually, I think I paid them all back within nine months. So it worked out well.

Rob: Right, right. When you tell a story after the events have occurred and people hear it, I think sometimes people get the sense that it was easier than it really was. It’s hard to really feel the sacrifices that you made to achieve this. For example, you say you lived in the projects for the first year or whatever and people could think, “Oh, that’s probably bad.” T

hen you move on in the story and it kind of keeps going, but you lived in the projects for a year, right? And as I recall, you didn’t realize it was the projects for the first five months, which is great. But let’s start with the first property you bought. It was one-bedroom, right?

Alan Corey: Yes.

Rob: And you rented out the living room.

Alan Corey: Yes. It was. It was a one-bedroom apartment that was just my very first property. I had $10,000 in my savings account (mostly from my day job) that I just funneled over automatically. I never saw it until— at the time I said, “Well, that’s either a $50,000 apartment (which doesn’t exist in the New York) that I could put 20% down on, or I could put 10% down on $100,000 apartment which, at the time, didn’t exist in New York either. What I found was an apartment listed for $110,000 maybe— $112,000. Something like that. That was one apartment. The next cheapest one it’s about $120,000.

It was in a place I’d never been to. It was in Brooklyn. I just saw that I had a chance. I just have to low-ball them and get them down to $100,000 so I’d have 10% down on this apartment.  So I went there—I called the guy every two days and said, “I’m still here and I want to buy your apartment.” And they wouldn’t accept my price. They kept rejecting my price. So it sat on the market for quite awhile and then finally we agreed to $99,600.

Then once I moved in, obviously it was more expensive than living in Spanish Harlem, so instead $400 a month it became $800 a month. Adding on other stuff, like fees, it ended up about $1,000 a month. And all of the sudden I thought, “Well wait. I have my apartment and that’s great. That’s goal number one. But I’m spending way more money and doubling my housing expenses and I would never be able to save enough to buy a second property unless I changed something.

So I took the one-bedroom apartment and I just hung up a really, really heavy curtain around the living room which, being a young 20-something in New York, I never really spent a lot of time at home anyway. And, of course my apartment was down in Brooklyn and all my friends were in Manhattan, so… Given I really only needed a place to sleep, I was able to find a roommate. I lived out of my curtained living room and basically cut my expenses in half. I was back down and to paying what I was paying when I lived in the projects.

That’s when I got that ‘ah-ha’ and could say, “Okay, this is great. I can do this again next year,” because my expenses are back to what they were the previous year and I knew I could probably buy another apartment the following year.

Rob: Yes. But now, obviously, that required some sacrifices. First of all, you’ve got someone living in your living room. That’s  number one.

Alan Corey: Okay.

Rob: I assume you had just one bathroom. So you’re sharing a bathroom.

Alan Corey: Yes.

Rob: And when you come home, you’ve only got one place to go and that’s the bedroom.

Alan Corey: Yeah, either the kitchen or the bedroom— yes.

Rob: And how long did you live in that set up?

Alan Corey: For one year.

Rob: One year.

Alan Corey: Then I bought another place and moved into that the following year.

Rob: Well, that’s the other thing… You bought the other place, and that’s where you borrowed the money from friends and family. As I recall, from the book, I think you ended up converting it so that they were basically seven units in this building, right? Seven rooms to rent?

Alan Corey: Right, right. Yes. There was one four-bedroom and one three-bedroom. It was a two-family home. One four and one three. I just removed a door that was dividing in the two units and basically made it a seven bedroom house. I lived in one room and got six roommates.

The reason I did that was I could maximize— If I was renting each room, I could rent each room for about $600 to $700 which was about $2,000 more than if I rented out the units separately. And people preferred swapping a room rather than renting a whole apartment and things like that. It just made sense. Obviously it was more work. I had to manage tenants and I had to live with those six tenants rather than with some sort of separation from, like—

Rob: You basically were back in the college dorm. That’s sort of what it sounds like.

Alan Corey: Yes, exactly. It was a bit of a frat house. That’s true.

Rob: But this is what I want people who are listening to really understand. You moved out to your first place, and you rent that now to someone else, right?

Alan Corey: Right.

Rob: So you’re managing that property. And do you have two tenants in that property?

Alan Corey: Yes, it was— yes, actually, I do. I have two tenants.

Rob: Yes.

Alan Corey: Yeah, there were two other guys and they shared it and were apparently saving money like I was.

Rob: Right.

Alan Corey: Then I was making money basically because I didn’t pay to live in the seven bedroom, multiple occupancy house I created.

Rob: Yes, but now you’re managing the two tenants of the first property. You’re managing six tenants at the new property, which means dealing with their complaints, dealing with them not paying on time, finding new tenants when one moves out. And, one of the bedrooms, which was really an office, didn’t have windows. You had a hard time renting it out so you moved into the windowless room yourself.

Alan Corey: Yes. Well, basically it was a big closet. But, I decided that if I couldn’t rent it out, I’m going to have to live there myself. And so that’s when I put in my bed and dresser in there and that became my room.

Rob: How long did you live in that home with the other six other tenants where you were living in a large closet?

Alan Corey: I lived there for 10 years.

Rob: Was there any time, particularly in the early years when you were living with your six tenants in basically a large closet, where you felt like giving up because it’s just not worth it?

Alan Corey: No, I mean, it was working. I wanted to do this again, and again and again. I was making more money being a landlord than I was in my day job at that point. It was great. It wasn’t really like the work I’d have to do at work. I looked at it as, “This is my paycheck.” Just like if my boss asked me to stay and do these tasks, I’d have to stay and do them. And that’s what I kind of did. If I had to spend the weekend cleaning or whatever, I’d  just look at it as being my job. I’m getting paid to do this, so it makes sense.

Rob: Yes.

Alan Corey: And to clarify when I said I did that for 10 years, I lived in that same house, but I eventually turned it back into two units as I got older and needed to calm down the pace a little bit. But from the way it was set up, it was probably five years of managing six roommates at that time.

Partnering with a Handyman

Rob: I think this is a great way to make money, but you had a neighbor who would move into a place every two years, fix it up and sell it two years later. Of course, the gains were tax free, which I think is a great way to go. I’ve never done it. But you partnered with him. He was good at fixing up houses. I take it you didn’t have any real background in terms of— you didn’t have the skill set (at that time) to go renovate a home from top to bottom?

Alan Corey: Right, yes. I’m not a handyman by any stretch of the imagination.

Rob: Yes, but he did. That was what he kind of did for a living.

Alan Corey: Yes.

Rob: So you partnered with him, and you had another investor, and you basically went out and bought a half million dollar building. Did you then, with your neighbor, help him renovate it from top to bottom?

Alan Corey: Yes. The way it worked out was, I would be the business side of things, and he would be the muscle, I guess. He would do all the work. He had the skills. He had the connections. He already had subcontractors from before and things like that. But I had the means to find good deals. I’d already had relationships with banks to get loans.

I brought in a third investor because I didn’t have enough money doing it on my own. So I also got an investor to help us out. So, yeah, it was a good partnership. He was in between this two-year period where he could sell the house scot-free, so, he was just sitting idle. So in his off years we just decided to kind of partner up and make things happen.

Rob: How many buildings did you buy with your neighbor and renovate and then sell?

Alan Corey: I think it was just two.

Rob: Okay.

Alan Corey: Yes.

Rob: And you made some big money on these properties?

Alan Corey: Yes. And that was crazy. We bought one for $400,000. It was a mixed-use, two family with a store, like a little bodega grocery store. We bought that for $400,000. We put $200,000 into it, which makes it $600,000, and then we actually sold it to Barbara Corcoran who’s actually on Shark Tank.

She was the owner of a real estate firm called, Corcoran Real Estate, in New York City at the time too. We sold it to her for 1.1 million dollars. This was the first property ever to sell for over a million dollars. It was on the front page of the New York Times. And that obviously changed things. That was a huge one.

Rob: What year did you sell that?

Alan Corey: That was probably 2004. That was kind of in the height of the real estate market, so we kind of got lucky with the timing on that. A lot of people, basically when they hear that, that’s when they dismiss me and say, “Well, you got lucky. That’s how you get rich.”

I talk a little bit about luck in this book. The way I look at is, I was in a position to get lucky. None of my friends— no one else I knew – owned a property, much less three that time. I also owned a lot stocks and 401Ks. I tend to be pretty lucky in stocks and stuff, but if you add blood, you can’t get lucky.

So, I had put my neck out there. I tried. I understood the risks, and I also understood the rewards, so I was in a good place to get lucky. But, at the same time, 95% of the people I knew didn’t want to take that step to even attempt to get lucky or even understand the benefits of low-cost saving in any market. If the numbers work, the numbers work. The way I do my calculations and math is in the worst case scenario.

So I knew if I bought this property for $400,000 and I put $200,000 into it, I could sell it for about $650,000. And with a year’s worth of work I would have made $50,000, split amongst three people— which is not great, but money is money. That was my worst case scenario when we bought the property. But the market kind of took off, and the property was way more inflated than anyone thought it would be, so we split $500,000, three ways. That basically allowed us to do another flip, another renovation. I didn’t need an investor moving forward from that point because I could be my own investor.

Rob: Yes. Yes. Well, the thing about luck is, you’re absolutely right. You put yourself in the position to be successful. I’m a big believer in, the harder you work, the luckier you get. If you just spent 95% of what you made, like most people do, and just worked your 9:00 to 5:00, then, you’re right, you wouldn’t have gotten lucky. But there was a lot of hard work that got you to a place where you could take advantage of a pretty big real estate market. You did the first big flip, then you did another one.

Alan Corey: Yes.

Buying Bars and Restaurants

Rob: Then you bought a bar, right? You bought a bar and a restaurant?

Alan Corey: Yes. Actually, when I knew that Barbara Corcoran of Shark Tank was buying the building that we just worked on, I said, “This neighborhood is going to change. And this building is going to be the epicenter of this neighborhood changing,” so I bought the bar right across the street from the building we just fixed without telling the owner that changes are coming and that Barbara Corcoran is buying the building. She bought it as an investment property. Not to move in.

But she obviously knew more about real estate than I did, and with that she was confirming the thoughts I had about the changing market and things like that. So, I bought the bar and restaurant across the street. And, the way I look at it is, that was another way of diversified with a different revenue stream. It was something to do different besides just the two-family property.

Instead of just being a landlord, now I was a business owner. Obviously the bar had its ups and downs just like any bar and restaurant, but being 25 and owning a bar in New York City is also kind of fun. It was hard managing the fun part of it and business part of it as well. It’s not something I’d recommend to everyone. And probably no longer than about two years later I sold it. Over those two years we had some ups and downs, so we barely broke even. I think we basically came out probably better than most people who buy bar and restaurant, fortunately. I’ll take that any day.

Hitting the Million Dollar Mark

Rob: So what eventually put you over the million-dollar mark was the advance you got for your book?

Alan Corey: Yes. It’s successful now. I got a $20,000 advance for providing the book, and that was the last $20,000 that I needed to reach my million-dollar goal. That’s where the book ends at (A Million Bucks by 30). In the last chapter of the book, I say I only need $20,000, which is going to take me a least one more year of saving. Then out of the blue my book eventually got accepted and I got a $20,000 advance. So that pushed me over.

Rob: Okay. You were about 29. You had a million bucks. I know you had flipped some property, but at that point in time you owned the bar, right?

Alan Corey: Yes.

Rob: And you owned the first apartment you’d ever purchased, the one where you rented out the living room?

Alan Corey: No. I had sold that already.

Rob: Okay. You sold that. But you still owned the second place you’d bought?

Alan Corey: Yes. I own the seven-room boarding house and then the bar. Those are the only two properties I still owned.

Rob: Okay. That’s the good news. But I understand that since that time, you actually had a rough patch. Can you tell us about that?

And Then Hitting Rock Bottom

Alan Corey: Yes, sure. And that leads up to the second book called, The Subversive Job Search. I was just stupid. I guess I thought, “Okay. I’m a millionaire now. I’ve reached my goal. I don’t know what I want to do next.” So at 28, I quit my day job because I had hit my million dollar mark.

And I had a new problem. I was an ego-manic. I actually threw myself a retirement party. And so, I lost my day job at the age of 28.

The one I had, the tech support job that was paying $40,000. So I threw a retirement party for myself at the age of 28 at the bar that I owned. We also celebrated the book deal. I thought that was good because I’d never have to work again. And then I also decided at that time that I didn’t want to landlord as much. So, I took my seven-bedroom unit that was making a lot of money individually and turned it back into a two-family. I rented out the apartment and temporarily lived in one. I moved from the closet to the bigger bedroom. I was trying to upgrade my lifestyle. And of course—

Rob:That increased your expenses or decreased your income anyway?

Alan Corey: Yes. Yes. Everything that got me to where I was going, I was reversing in shifts. So all of a sudden I had no income from my day job. I had reduced income from my changes to the layout of the house. And then also, absentee managing of the bar and restaurant that I had no knowledge of how to run— it was having its ups and downs. I had no one to blame except my dumb 28-year-old self for being an idiot.

But all those things obviously had a great impact on my income. Everything just came to a screeching halt. And that’s the downfall. On top of that, obviously the real estate market crashed. I didn’t actually lose any money flipping the house, even though that could have been a big loss that way. But in one aspect I did start doing a home renovation on my house.

Not only did I switch the layout of the house, I decided I wanted to a gut and renovate the whole thing, and that was probably going to be another $200,000 expense. It ended up being a $400,000 expense.

Rob: Wow.

Alan Corey: So it was one dumb mistake, after dumb mistake, after dumb mistake. At the end of it, I had a really awesome house that wasn’t worth as much as I put into it because the market had crashed. So I built my dream house, but I had no money. I had no income because I had to kick everyone out of the house to renovate it. It was just one bad move after another…

I’m glad I can laugh about it now. But at that time, obviously, I was going into a deep depression. Even though I was depressed I was still making decisions, spending money just trying to make myself feel better about my depression. Obviously, that just made more depressed— It was like a downward spiral.

Rob: How long did you stay a millionaire before you started spending the money and heading back down in terms of your net worth?

Alan Corey: All of that started the second I turned a millionaire. So, probably the next day I started spending big, but probably a year. It lasted about a year. I thought it was going to be awesome, but it was the most boring thing ever because every single one of my friends worked from 9:00 to 5:00. There was nothing for me to do.

And yes, I did get into, The Subversive Job Search, which is the follow up book, and eventually climbed back up. But, I would go out to the gym… I’d spend four hours there because I had nothing to do. I had no one to call, no one to hang out with. And then at the end of the day— if it was a Tuesday night, I had nobody to go out with because all my friends had jobs and they didn’t want to go out on a week night and just get completely wasted or hammered. I got so bored, so quickly that I just started spending money entertaining myself.

Rob: It sounds like you had this purpose, this goal that was driving you and once you achieved that, it was almost as if you lost your way. It was as though you had this north star you were trying to reach, and once you reached it, you started floating adrift without a focus.

Alan Corey: That’s exactly it! Every decision I ever made for the past eight years was, “Will this help me make me a millionaire by 30, yes or no?” If it was yes, I did it. If it was no, I didn’t do it. And that was like my guiding light. Once I didn’t have that compass, I had nothing to judge whether a decision is good or bad. So I’d try things in their place. “Will this make me happy? I think so. Let’s try it.”

Rob: How far did you fall when you hit bottom? Because I know you have since turned it around, right? So, when you hit bottom, what was your net worth?

Alan Corey: Basically, at that time, I had one good asset, the house I had just renovated. But that was fluctuating in price. So, probably at the lowest, $500,000.

Rob: Okay.

Alan Corey: Because the house I bought for $450,000 five years earlier and I had put $400,000 into it. So it probably went down to $500,000.

Rob: Right.

Climbing Back Up Again

Alan Corey: And then also, I had no income and actually, I was soon taking government assistance for being unemployed…

Rob: Wait a minute. You were getting government assistance?

Alan Corey: Yes. Yes. That was definitely my lowest point until I was able to get a job. I was unemployed for about four months before I was able to get a job. And that’s what The Subversive Job Search is about— my book where I went from government assistance…

Unlike before when I was living in the projects, now I was really in that situation. So I had to climb myself out of it. That story is basically how I went from nothing to creating a six-figure career in three years.

Rob: Okay. What’s your new career? What do you do now? You’re out of New York City, right?

Alan Corey: Yes. I lived in New York for two more years. I just moved to Atlanta, my hometown, about six months ago. I’m a software project engineer. I researched six-figure careers and salaries at the time because I had to get back on my feet, and I didn’t know how to do that.

But, I found the shortest path that I could and got certificates, more schooling and really tried to work the HR angle with figuring out what I would need to do to get to where I wanted to go. I recognized those steps and followed those steps to a tee to make sure I could get through the HR hurdles, get interviewed for a job, and work my way up.

Rob: So you’re a software engineer now?

Alan Corey: Not engineer, but a project manager.

Rob: Okay.

Alan Corey: I work with software engineers every day, but just to make sure projects come out on time and on budget and things like that. And it’s definitely another crazy whirlwind experience going from zero back to a millionaire from going the career route. The first one was basically real estate related and personal finance, investing and things like that. And the second one is a 100%, 9 to 5 corporate job. So, it worked.

Rob: Right. Do you still own any of the real estate in New York City?

Alan Corey: Yes. I have the same house that I renovated and have tenants living in that. That’s tripled in value now. The market is thankfully back up. And then I actually bought the house next door before I left New York, and I’m renting that out. I also bought another piece of property with a friend of mine, as well, and obviously I’ve got a place in Atlanta. So, I have four of properties now. Three are generating income, and one is my primary residence.

Rob: And then you’re working at your 9:00 to 5:00 job?

Alan Corey: And I’m still working my 9:00 to 5:00 job and I’m not going to retire ever, ever again.

Rob: Yes. And so, you’re a millionaire again?

Alan Corey: Yes.

Rob: Okay. It’s interesting. It’s a good lesson on the real estate because a lot of people panic when something goes down in price. You obviously didn’t sell it. And I think you said it’s tripled in price since its low point?

Alan Corey: Yes. Yes. It would probably be 1.4 million now if I wanted to sell it.  And it’s generating such a great cash flow for me as well. It’s a nice house in a nice area.

Rob: You made your million bucks, and it seems like you left behind your previous habits of not spending much money. You started spending a lot of money. Particularly on the renovation.

How about today? Are you kind of back to where you were in terms of how you spend and manage your money? Let me ask it this way— of your gross income from work, your 9:00 to 5:00 job, how much of it do you save?

Alan Corey: Probably 100% now because I’m in a great situation when it comes to my rental property, so I try to live off my rental income.

Rob: Okay.

Alan Corey: And invest 100% of my income from my day job.

Rob: If I can ask you, how old are to today?

Alan Corey: I am 36 today. And I’m not as stingy as I used to be, but that’s because I’m now married and have two kids. I did have a bit of financial OCD that I admitted to in the book as well. But I have a very extreme mindset, and I have to try and be a little bit more balanced now.

Rob: Yes. Yes.

Alan Corey: I’ll splurge on some things, but I’m also very considerate, basically, on other things. I try to live a balanced life because swinging from extremes to extremes was not healthy for anyone, especially me. So I’m definitely working on the balanced approach.

What’s Next?

Rob: Can we expect another book out of you? Something like, Ten Million Bucks by 40? What’s going to be next for Alan Corey?

Alan Corey: That’s a good question. I’m actually working to get my real estate license right now. I love real estate. It’s my passion. So, I hope to be involved in real estate in some way, whether it’s investing in property down here or being a property manager or even just being a real estate agent. I haven’t figure that out yet. But that’s what I’m working on now.

But in terms of books, after my first book I said, “That’s all I had in me,” and I wrote a second book. So, if there’s a third book in my head, that means that something very horrible must have happened to me. So, I hope there is no third book.

Rob: Well, in that case, I hope not too.

Alan Corey: Yes.

Rob: Okay. People know what the first book is about because we’ve been talking about it. The second one is called, The Subversive Job Search. And I’ll put links to both of these in the show notes, but can you give folks a synopsis? Who should buy and read your book, The Subversive Job Search? What will it teach folks?

Alan Corey: Yes, sure. Both of my books are basically beginners guides. So, a lot of times it’s good for people just coming out of college or just kind of churning the waters. But, The Subversive Job Search, is for anyone who is looking for a job, wants to find a career that fits them or wants to maximize their paycheck the fastest way possible— how to negotiate a raise, how to negotiate an interview.

I found all these research studies, very good research studies, and I put them in practice. Then in the book I tell which ones worked and which ones didn’t and how I crafted my own salary in negotiations. I basically started over with the same salary as the first job I had. So I was back to making $40,000, and in three years I was able to turn that into a six-figure salary.

So, if anyone is looking for a career change, wondering how to find their first job—maybe they’re just out of college or have been laid off and they want to get back into it, or maybe even wants to switch careers entirely, that’s what The Subversive Job Search  is all about.

Rob: Right. Right. Good Okay. Hey, I appreciate your time and for sharing your stories. Is there anything I’ve missed? Any part of your story you want to share with us that maybe I didn’t asked you about?

Alan Corey: I think we covered pretty much everything exactly.

Rob: Okay.

Alan Corey: It’s been a fun ride. And one thing I want to mention is that financial books tend to be so boring and dull. I tried so hard to make my books entertaining and easy to read. So, if you’re a beginner or someone who’s never read a personal finance book before, I tried to connect to that person and put things in the simplest terms with a funny spin. And that’s why I want to get as many people as possible who are scared of finance and just kind of pull them in slowly so it’s not as scary as you think it is.

Rob: Yes. The thing I liked about your book, among other things, is that you were telling stories. Really your book is a story that’s got personal finance and investing lessons weaved through the whole thing, but the story makes the book very interesting.

And again, the other that I liked about it was you talked about the sacrifices you made. Somehow I think that gets lost in the discussions about money and investing. So many people perceive themselves as victims of whatever— society, the big corporations, the system. And that doesn’t really help you much. You didn’t see yourself that way. You saw it as something you could control. And like you said, you have complete control over what you spend, in particular. And I think that was a great lesson that was related throughout the whole book.

Alan Corey: Yes. A lot of it is just mindset. Being confident in yourself and not looking at obstacles as bone-crushing. I know making a million bucks by 30 sounds like a get-rich-quick scheme but it was, as you said, it took a lot of sacrifices to get there. It wasn’t like I just won the lottery.

Rob: Yes. Yes. Well, great. Listen, Alan. I really appreciate your time. Thank you so much for being the show.

Alan Corey: I appreciate it. Thank you so much, and thank you for having such a great podcast. I’ve been listening to a few episodes, and I can see the benefit that of—not only what we’ve discussed today, but also information, back when I was 22, that could have helped me.

Rob: Great. Great. Well, I appreciate it. Thanks again.

Alan Corey: Cheers. Talk to you later.

Topics: Earn Extra IncomePodcastReal Estate Investing

2 Responses to “DR 104: Rags to Riches and Back Again–Interview with Million Bucks by 30 Author Alan Corey”

  1. Christopher Long

    Hi, I just found this because I had heard that Alan had a downturn after the book and wanted to find out what happened. Like Natalie, I also was inspired by his book , my two brothers and I have read it. I’m 31 and now have 90 units and my net worth exceeded well over a million by 30. I started out in a much worse place. If you are interested in my story, I’d love to share it. I have thought about getting in contact with Alan to see if he’d be interesting in partnering to write and tell my story. In not very good at writing and think it would be very hard and time consuming to start from the ground up in the book business.

  2. I know that I am chiming in a little late with this message, but I just finished listening to this podcast and thought it was great! I am glad that my interview (from podcast # 87) prompted Rob to reach out to Alan. Alan’s first book was such an inspiration for me, and I cannot wait to get my hands on his most recent publication.

    Cheers,
    Natalie

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