• After years of writing about financially independent individuals, I've picked up on commonalities.
• One is that they have multiple revenue streams — at least one of which is from their own business.
• In 2025, I'm starting my own side business to see if the wealth-building strategy works for me.

My job involves interviewing people who are good with money — self-made millionaires, early retirees, and "super savers" who keep the majority of their income — and asking them to share their wealth-building strategies.

After nearly a decade of talking to these money-savvy individuals and absorbing their knowledge, I've implemented a lot of what they advise: I automate my savings and investments, live within my means, track my expenses and net worth, and take advantage of an HSA.

I have a lot of the personal finance basics down, but in the spirit of a new year and always trying to improve, I've decided to think bigger for 2025 and tackle one particular wealth-building strategy I've written about but never dared to try: starting a business.

One observation from talking to financially independent individuals is that they don't rely on a single source of income. They have at least two and, oftentimes, multiple revenue streams. Even the super savers tell me that there's a cap on how much you can save. But how much you can earn, they point out, is limitless.

Another commonality is that one of their revenue streams comes from their own business.

I've spoken to Amazon and Etsy sellers who have built e-commerce empires, content creators who drive passive income from courses and affiliate links, and a millennial who went from broke to seven figures by building websites and flipping domains.

Starting an e-commerce business

The business model that most intrigued me — and seemed doable on a budget — was e-commerce. Essentially, selling a product on platforms like Amazon.

I learned through interviews that there are three main ways to make money on Amazon.

There's arbitrage, which is the most basic, low-cost way to start selling on Amazon. This is when you source products from different marketplaces to sell. To be profitable, you must buy the product for less than it sells on Amazon. After reselling, you keep the difference.

The next tier is wholesaling. This is when you buy products in bulk and resell them on Amazon. Like arbitrage, you aren't making your own product — you're simply reselling an existing product — but you're spending more money upfront on inventory.

Finally, there's the private label route. E-comm experts have explained to me that starting a private label brand is the most time-consuming and costly but has the most upside. It requires actually creating a product and brand.

I went with the latter and technically started the company in 2024 when a friend and I designed a pickleball paddle and ordered inventory from a manufacturer in Asia. My goal in 2025 is to sell the 500 paddles that are on their way from China to my apartment in LA, build a brand I'm proud of, evaluate whether selling a product online is a suitable side hustle for me and my strengths, and write about every step of the process.

I don't expect building a side business to be easy. And everything I've done so far has cost more and taken more time than anticipated.

Most of the financially independent entrepreneurs I've spoken to started with a side hustle — and, in some cases, simply a side project or hobby that cost them money, let alone brought any in. They put their heads down from 9-to-5, worked for an employer to cover their bills, and then reserved 5-to-9 for building businesses.

Carving out time and energy to work on a side project that might not generate sales while simultaneously working a full-time job isn't for the faint of heart. These self-made entrepreneurs put in a lot of hours for an unknown outcome.

NeuroGum cofounder Kent Yoshimura, who worked at a music studio and as a muralist while building a caffeinated gum and mint company, admitted to pulling "an all-nighter once a week" in the early days of his startup.

Jatz Naran said he built his Amazon business between the hours of 6-and-10, after his day job would wrap up. "Forget work-life balance," he told me. At the end of the day, "you have to sacrifice one thing for another."

What's intriguing about starting a business is that you're in the driver's seat. The success or failure of the company is up to you. How much you and the company earn is up to you.

I'm reminded of something real-estate entrepreneur Dion McNeeley told me during an interview: Think beyond your day job.

His revenue streams at the time included his day job running a commercial truck driving school, long-term rental income from his portfolio of 16 properties, and a side hustle as an expert witness, which is someone who is called to testify during a trial because of their specific knowledge. He provided expert testimony for cases involving truck driving accidents.

"I make way more money spending two hours a month on real estate and one to two hours a month providing expert testimony than I make running a truck driving school," said McNeeley, who has since retired from his day job. "The mistake a lot of people make is selling their lives one hour at a time and not realizing that you make a lot more money when you get paid on the value you produce."

• Real-estate investors shared their predictions for 2025 and top advice.
• One investor says to think long-term and don't expect interest rates to drop.
• Another says to spot opportunities by looking at 'days on market' on a listing.

Experienced real-estate investors don't expect mortgage rates to drop significantly in 2025, but they tend to agree that it could be an excellent year to invest in a property.

Arguably, any year is a good time to dip your toe in if you're financially prepared.

"Some of the best advice I can give somebody is just understand that you can never perfectly time anything," said Matt Laricy, a Chicago-based investor and agent who has done over $1 billion in sales and closed thousands of deals.

His advice applies to prospective homeowners, as well: "You have to live somewhere, so is it really worth waiting one or two years to maybe get it for 10% less, but in the meantime, you spend 20% more on rent? Are you really winning?

"Just know that the best time is when you're financially ready."

Here's what Laricy and other veteran investors and agents predict will happen in the real estate game in 2025.

Dana Bull says to think long-term and not wait for rates to drop

If you're looking to buy a home or invest in real estate in 2025, don't wait for rates to drop before making a move.

"I wouldn't base my whole plan around, 'Well, I keep hearing rates are supposed to drop,'" said Massachusetts-based investor and agent Dana Bull, noting that current rates are in line with the historical average. "This is kind of where rates sit. So, if they were to drop, that would be great, but I wouldn't be banking on it."

Instead, figure out how to make the numbers work in a high-rate environment. That'll mean getting creative.

"Look at some alternative leasing approaches. Usually, they're more lucrative if they're shorter," said Bull, who has always done long-term rentals but is experimenting with mid-term in 2025 to improve her cash flow. "One idea would be to start with something like an Airbnb, with the goal of transitioning after two or three years into something more passive, like a long-term rental."

Real estate is a long-term game, she added: "You have to look beyond year one — the numbers are always going to be tight year one, no matter what the market conditions are — so, what are your projections going to be by year five?

"And then, what can you do in the interim to maybe make this property work? That would be focusing on neighborhoods and communities where you can balance both of these plays: It's going to attract a short-term rental tenant but, down the road, you can pivot into a longer-term tenant."

Matt Laricy predicts the market will 'take off like a rocket ship'

"I expect 2025 to be the best market since 2022. I think the market is going to take off like a rocket ship," said the top Chicago real-estate agent, adding that, "obviously, every market is extremely local."

In his market, rents are very high, and, "it's almost cheaper, when you factor out your down payment on a monthly basis, to buy than it is to rent," he explained. "So, you are getting a lot of people who are going to buy just as a result of that." Plus, employees should have more certainty around their company's return-to-office plan, which could promote settling down and buying: "A lot of people rented because they were uncertain of their future."

Laricy also predicts that prospective buyers will adjust their rate expectations: "I think people have now realized that 2 and 3% are never going to happen, and are like, 'At a certain point, I either have to continue to be a renter for the rest of my life, or I have to be a buyer.'"

His advice for navigating a competitive market is, first and foremost, understand the basics: where you want to buy, what type of property you want to buy, and a realistic budget.

"It sounds easy. But for buyers, it's really hard," he said.

Regarding your budget, Laricy said to assume a home will sell for higher than what it's listed at. Study your market to see how much homes typically go over the asking price and factor that in. If it's $50,000, for example, and your budget is $500,000, look at homes listed for $450,000.

If you know exactly what you want and what you can afford, you'll be able to move quickly, which is essential in a competitive market.

"Know that you have to do things on their time, not your time," said Laricy, referring to the seller. "When something comes on the market, you need to move, and you need to move fast."

Mike Zuber says it'll be a good market for investors and to focus on 'days on market'

California-based investor Mike Zuber expects 2025 to be a "unique" opportunity for investors.

"I think there are some people that will just have to sell — life events, death, divorce, all of that," he said. "And unless the house is perfect, no owner is going to buy it. The general public is basically out of the housing market. So if you have a house that's a little dated, a little old, a little bit too close to busy streets, you're going to eventually have to sell to an investor — and we're going to write offers that make sense at a high cost of capital, call it 7, 8%."

His advice is to pay attention to the number of days a property has been on the market to land the best deals.

"Go on the general MLS, Realtor.com, Zillow, Redfin, and just look for homes that have been on the market for 50 days, 60 days, 90 days, 100 days," he said. "We're seeing days on market explode, and that just tells you that that seller is eventually going to be motivated or they're going to just take it off the market. So, do they need to sell or do they want to sell?"

If they need to sell, you'll be in a better position to negotiate.

As for what number to look for exactly, start by understanding the average 'days on market' in your area. Then, look for listings where that number is double, said Zuber: "Anything that's two X the average days on market is a good sign to go fishing."

Nyasia Casey says to know the laws in your area and understand seasonality

Rules and regulations that may affect real-estate investors are constantly shifting. In New York City, where investor Nyasia Casey lives, a new law going into effect in June 2025 shifts the burden of broker fees from renters to landlords.

"Essentially, landlords have to pay broker fees now — not the tenants. So, if you're a landlord, you have to factor in that cost now," said Casey, who rents in NYC but invests in Baltimore. "A lot of landlord and tenant laws are changing in certain areas that you need to be mindful of because it will affect how much money you're putting in and how much money you have to set aside."

She also emphasized that seasonality matters, whether you're buying and holding or buying and flipping.

She said that as a general rule of thumb, "buy in the winter, sell in the spring."

Whether you're listing a rental or trying to sell a flip, you want to find a tenant or a buyer in the summer.

"Once you get past October, you're going to have a difficult time, and you may lose money, whether it be you have to lower your price for a flip, or you have to lower your rental price just to get someone in there so that you don't bleed money," she said. "So just be mindful of when you're putting that house on the market, when you're buying it, and when it's going to be finished."

Ludomir Wanot encourages investors to save up to make a move

"As of October, we're seeing about a 29% year-over-year increase in homes for sale, so what I'm seeing is the market is showing signs of balancing and the conditions are becoming more favorable for buyers compared to the last five years," said Seattle-based investor Ludomir Wanot, who built his wealth wholesaling and now runs an AI company that helps lenders communicate with their clients. "And so the best thing right now we could do is save our money for opportunities that arise."

He doesn't expect rates to drop significantly in 2025, "so learning and utilizing creative financing is going to be your go-to," he said, recommending strategies such as seller financing, subject-to agreements, and private lending could help investors lock in better terms and avoid excessive borrowing costs.

Wanot's top advice heading into the new year, however, is to actually implement what you learn about online. Taking action could be as small as joining a real-estate community and networking.

"People are buying programs, they're going to the events, they're watching people come up onstage and talk about how wealthy they got through a particular strategy. But very few people actually implement anything they're being taught," he said.

"The day we actually stop listening to and reading all these stories, podcasts, and YouTube videos and actually apply ourselves is the day we're finally going to start seeing progress in our lives."

• Real estate investors share the strategies they're using in 2025.
• One investor is buying mobile home parks for tax incentives.
• Another is leaning into mid-term rentals, which tend to cash flow more than long-term rentals.

Prudent real estate investing can create long-term wealth, and while every investor has their own unique circumstances — from how much risk they're willing to take on to how much cash they have accessible — there are lessons to be learned from veteran investors.

Business Insider asked top real estate investors who have achieved financial independence or are on their way to doing so about their plans for 2025.

Here's a look at how they are positioning themselves as we head into a new year and what trends are driving their decisions.

Ludomir Wanot is buying mobile home parks for the tax incentives

Seattle-based investor Ludomir Wanot, who built his wealth wholesaling and buying long-term rentals, is adding mobile home parks to his portfolio.

They can be depreciated at a faster rate than other investment properties and significantly reduce an investor's taxable income, he explained: "The government actually allows you to depreciate at least up to 60% of the purchase price of the value of the asset in year one. I bought a million-dollar property in New York. I was able to depreciate up to $600,000 of that in the first year, and so that basically reduced my taxable income to zero."

It's a win-win, he added: "I'm providing housing for people that only make maybe $1,000 a month and I'm providing it to them at a significantly lower rate, around $200 a month. They get to live in a good community, I get to rebuild a community, and I get this crazy incentive from the government."

Mike Zuber is looking for motivated sellers

Mike Zuber, who built a portfolio of rentals in Fresno that allowed him to retire early, is expecting to see "more motivated sellers" in 2025.

"I think there are some people that will just have to sell — life events, death, divorce, all of that," he said. "And unless the house is perfect, no owner is going to buy it. The general public is basically out of the housing market. So if you have a house that's a little dated, a little old, a little bit too close to busy streets, you're going to eventually have to sell to an investor."

That's good news for Zuber and other property investors looking for deals. He's prepared to "write offers that make sense at a high cost of capital."

Dion McNeeley is considering selling a property and capitalizing on an IRS rule

Dion McNeeley, who spent over a decade carefully building a portfolio of rental properties throughout Washington State, has never sold a property.

"I'm the slow, boring investor: Save up a down payment, buy the next place; save up a down payment, buy the next place," he said.

That may change in 2025, partly due to an intriguing tax benefit he'll be eligible for.

McNeeley's most recent real estate project was buying and rehabbing a duplex. He lives in one unit and rents the other. In July 2025, he'll have owned and lived in the duplex for two years, which qualifies him for the Section 121 Exclusion, an IRS rule that lets taxpayers exclude up to $250,000 of the gain from the sale of the property. The main requirement is that you must use the home as your main residence for at least two of the five years preceding the sale.

"I could sell it, make a couple hundred thousand dollars in profit, and not have to pay a penny in taxes — and either go and repeat the process somewhere else or go buy something with the gains and have a bigger, nicer place," said McNeeley, who plans to make a decision in July after doing an appraisal.

Nyasia Casey is testing a strategy she might want to scale: Building tiny homes

Nyasia Casey, who lives in New York City and owns investment properties in Baltimore, is excited about a new 2025 project: building a tiny home on a plot of land that her friends own in upstate New York.

"I'm going to buy a trailer and build a tiny house. I'm going to keep it on wheels so I can transport it if I wanted to go somewhere else with it — if I buy my own land," said Casey, who is starting the build in the spring.

She'll likely experiment with listing it on a short-term rental platform like Airbnb, she said: "I like the idea of it being a more affordable option for people to go and explore instead of renting something for $300 a night. So, it's something that I'm testing out and then if it works, I will definitely consider buying land and doing a couple more."

Dana Bull is experimenting with mid-term rentals

Massachusetts-based investor Dana Bull built wealth by following a specific strategy: buying quality properties with upside in solid areas and filling them with long-term tenants.

However, with the most recent property she purchased and renovated in 2023, she decided to experiment with operating a mid-term rental, which is a lease agreement that typically lasts between three and nine months.

"It's my first experience with something other than a long-term rental. I'm kind of in uncharted waters, but it's been great," said Bull, who plans to test out the mid-term rental strategy for at least 18 months. It's more work than managing a long-term tenant, but she said she's bringing in more revenue, which is helpful since she bought when interest rates were relatively high.

Bull has already refinanced once, which shaved about $250 off of her mortgage.

"I'd love it if they dropped again and I could save another 250," she said. "At that point, I probably would transition it to a long-term rental because it would be lucrative enough and less of a headache, but right now I'm just experimenting for my own curiosity and I want to understand more about this niche."

Karina Mejia is expanding her portfolio, starting with a BRRRR

Karina Mejia, who owns investment properties in Boston, where she lives, and Augusta, Georgia, sat out 2024 in terms of acquisition but plans to expand in 2025.

"I definitely would like to continue purchasing property primarily because of the tax advantages," she said. "This year, I didn't close on anything, and so I'm really going to see the effect of that on my taxes."

She's under contract for a three-family home in Boston and plans to close at the end of January.

"I'll end up renovating and BRRRR-ing it," said Mejia, who is also an agent and jumped on this property when she saw it. "I have it under agreement for 850 and the appraisal came back already at 930 in its as-is condition. I'm projecting to put some money into it and I know that the ARV, or the after-repair value, will end up being over a million so I may even be able to get back more money when I refinance than I'm putting into it, which would be great because then I get my money back and I can invest that in another property next year."

Peter Keane Rivera is leaning into his rent-by-the-room strategy

Part-time investor Peter Keane-Rivera, who owns single-family homes in the greater Seattle area, is leaning into his rent-by-the-room strategy.

"I'm looking to expand my single-family home, room rental portfolio," he said. "My strategy will be to accelerate my purchasing of real estate while learning how to scale my room rental operations."

Finding tenants to share a space hasn't been a challenge yet for Keane-Rivera, who lists his rooms on Roomster, Roomies, and Facebook Marketplace.

"There are a lot of different subgroups looking for something more economical: people coming out of college, people getting their first job, people who just got divorced," he said. "I would say everyone that rents with me is looking to save money."

The room rental strategy produces generous positive cash flow, around $1,000 a month per property, and lowers his risk, he said: "You diversify your cash flow by having four tenants under one roof instead of one. Very rarely will you have all your tenants move out, and if you do, that's indicative of some bigger problem that you should probably go fix."

• I'm midway through my 'e-comm experiment' and have 500 pickleball paddles in production.
• I spoke to an expert about how to most effectively sell my product.
• He suggested a hybrid Shopify-Amazon model and said ads are essential.

Years of writing about individuals who make money selling products online sparked my curiosity: Is this something I can do? What would startup costs look like? Is it time-consuming? Difficult?

To answer those questions, I teamed up with a friend to develop a product (pickleball paddles) to sell online.

Product selection and development — phase one, if you may — has been time-consuming, challenging, and expensive. But we made a paddle we're proud of, the Peak Pro, and 500 of them are headed from a factory in Asia to my studio apartment in Los Angeles.

Phase two — actually selling the product — is officially underway, and my first observation is that it's going to present more challenges than phase one. Luckily, I've interviewed smart people who have done it before, and I have no problem asking for advice.

I reached out to Tyler Walter, cofounder of the product-sourcing company 330 Trading, which I'm also working with to manufacture my paddles. He's based in Taiwan and works closely with US e-commerce businesses, advising them on everything from initial product development to creating diverse supply chains.

I asked him selling-specific questions: How can I get consumers to buy from Peak Pickleball when they have endless options? He told me he'd tailor his answers specifically to my company, as every brand is a bit different.

Two pieces of advice stood out.

1. Build a Shopify and Amazon store

Walter advised me to start with a hybrid Shopify-Amazon model. In general, I'll get better margins with Shopify, as there are fewer costs associated with selling on that platform, but I need Amazon for traffic, especially when I'm first establishing the brand.

"Amazon is guaranteed traffic. There's a guaranteed flow of people who are going to see your product every single day," he said. And, using tools like Helium 10, I can estimate what that traffic is going to look like. "You can see exactly how many people are searching for pickleball paddles on Amazon every day, or pickleball-related items or even racket-related sports, so you can drill down into those details before you ever go live."

With Shopify, on the other hand, I'd have to generate my own traffic through things like social media campaigns, ads, and word of mouth.

Walter told me it's smart to start with the hybrid model since I haven't yet nailed down my typical customer.

Amazon will work well for the customer who is newer to pickleball and not yet intertwined in the community. They may come across my product while searching for a medium- to high-grade paddle online. "Amazon is amazing for that, the best in the world," he explained, especially if I can optimize my listing page, rack up good reviews, and rank well on the marketplace. "If there's enough traffic on Amazon every day for pickleball paddles, which we've already determined there is, then you're going to get people that you would never otherwise get who are just searching for pickleball in general."

Shopify, on the other hand, may serve a different customer: Someone who is more engaged in the pickleball community or cares more about the brand of paddle they're playing with. The customer who buys into our image, feel, and the technical aspects of our product will likely go directly to our website.

A Shopify sale is going to mean more profit, "but you have to be able to do the work to tell that brand story," Walter said.

That raises the question: What customer am I after?

If I can't definitively answer that yet, Walter told me a hybrid approach allowing me to test both types of customers is a smart strategy.

"You can test out the first 500 paddles and see where you get more traction and where you have better profit margins, and then invest more resources into that channel moving forward," he said. "But there's a good chance that you guys run this for the next five years and you might always be a hybrid model. It might always be both."

2. The key to standing out on Amazon: SEO, reviews, and ads

Walter sold me on setting up an Amazon store in addition to the Shopify one, but I had a follow-up question: Sure, millions of people log into Amazon every day, and hundreds of thousands may be searching for pickleball paddles, but how are they going to find mine? How do I avoid getting lost in the Amazon beast?

A variety of factors contribute to a product's rank on Amazon, but Walter pointed to two: search engine optimization, also known as SEO, and reviews.

SEO is essentially what you do to rank higher and generate more traffic — and a lot goes into it. For me, creating a listing page with relevant keywords and quality images is going to be important, especially the keywords.

Walter told me to use Helium 10 to know what keywords I should be using, whether it's paddle sports, pickleball, pickleball paddle, or carbon fiber paddle — and, if I have the resources, pay an SEO expert to optimize my listing page.

Reviews are also key to ranking well on Amazon, and he said I should always encourage customers to leave reviews. One idea is to include a blurb in the thank you email customers receive after placing an order reminding them to share their feedback.

Additionally, he told me that paid ads are essentially necessary.

"Ads are going to give you the best fighting chance of selling through all of your inventory profitably," he said. "If you're doing it right, a dollar into advertising should come back as $2 to $3 of revenue."

He acknowledged that it may feel nervewracking at first to pay for ads without knowing exactly what's going to come from them but assured me I could test ads on a budget of a couple of hundred dollars. Amazon ads are affordable compared to Google or Meta or TikTok ads since Amazon already has so much traffic, he explained, "so you can test it out with a very small budget."

He told me to keep in mind that because reviews are so important, even if we initially just break even from ads, it's worth it if they drive sales that lead to product reviews.

I shouldn't tackle ads on my own, though. He said it's worth it to hire a professional. There are two main fee structures: a flat fee or a percentage of sales. As a new business, the second option probably makes more sense so that I'm not spending too much cash up front. However, if I start selling a lot of paddles, the percentage of sales model might become more expensive, at which point I might want to consider switching to the flat-rate model.

I have no problem with outsourcing and have already done quite a bit of it. It's saving me time, and headaches — and, ultimately, helping me create a better product.

More from "The E-commerce Experiment":

• I started an e-commerce business with $5,000 up front after writing about financially independent Amazon sellers. Here's how I doubled my budget.
• My friend and I pooled $10,000 to start an e-commerce company. After months of brainstorming products, we chose pickleball paddles.
• Months into launching a pickleball e-commerce company with $10,000, I'm already over budget. Here are all of my startup costs, including a surprise $2,095 expense.
• I launched an e-commerce company with a $10,000 budget after interviewing top Amazon sellers. Here's everything I outsourced to save time, including a $250 task that was the best money I spent.

• Swiss snowboarder Sophie Hediger died in an avalanche in Arosa, Switzerland.
• Hediger was snowboarding with a companion, who alerted rescue services. She was found buried under the snow.
• She was a rising star, securing World Cup podiums in the 2023-2024 season.

Sophie Hediger, who represented Switzerland in the 2022 Olympics in Beijing, died in an avalanche in Arosa, Switzerland on Monday. She was 26.

According to a police report, Hediger was snowboarding with another person on a closed black diamond slope in Arosa, a town and a resort in eastern Switzerland. She left the closed slope and was caught in an avalanche.

Hediger's companion contacted rescue services, who found her buried under the snow about two hours later. Efforts to revive her were unsuccessful, and she died at the scene.

The Zurich native had been making waves in the snowboarding world, securing her first two World Cup podium finishes in the 2023-2024 season. In late January, she placed second in a Word Cup race in her home country. The next month, she earned third at an event in Gudauri in Georgia.

She also represented Switzerland at the 2022 Winter Olympics in Beijing, where she competed in snowboard cross.

Walter Reusser, the chief executive of Swiss Ski, said in a statement, "For the Swiss Ski family, the tragic death of Sophie Hediger has cast a dark shadow over the Christmas holidays. We are immeasurably sad. We will honor Sophie's memory."

Tributes from teammates, coaches, and fans poured in following the news of her death.

Hediger's teammate and friend Aline Albrecht wrote on Instagram, "With you I lose my best friend."

Another teammate, Sina Siegenthaler, wrote: "Keep on shredding in the clouds."

The Swiss snowboard cross team mourned the loss of their athlete.

Oxess, who makes the board that Hediger used, wrote, "Her passion for the mountains and her dedication to the sport touched everyone who had the privilege of knowing her."

• A report concludes that human error caused the deadly collision at Tokyo's Haneda Airport in January.
• The pilot of the Japan Coast Guard plane misinterpreted air traffic control instructions.
• Limited visibility and air traffic control oversight were additional factors in the collision.

A report released Wednesday from the Japan Transport Safety Board concluded that human error was the primary cause of a deadly collision at Tokyo's Haneda Airport.

The incident occurred on January 2, 2024, when a Japan Airlines (JAL) passenger plane arriving from New Chitose Airport in Sapporo barreled into a Japan Coast Guard plane waiting on the runway.

According to the report, the Coast Guard pilot mistakenly believed he had clearance to enter the runway. The air traffic controller told the coast guard plane that it was "No. 1," meaning it was first in line to take off and meant to stop and wait at a holding point. The pilot misinterpreted the instruction, believing it to be permission to enter the runway for takeoff.

In the final moments before the collision, the Coast Guard pilot ordered his co-pilot to go through a checklist that is typically performed once final takeoff clearance has been granted. The pilot, who survived, told investigators he thought he heard "cleared for takeoff" from the control tower.

The report noted that the pilot said he was in a hurry, which could have contributed to the misinterpretation. The Coast Guard plane was traveling to the city of Niigata to deliver emergency supplies after recent earthquakes on Japan's west coast, and the pilot said he was worried about his crew getting home late from the mission.

The report said that there were other contributing factors to the collision: Air traffic control failed to realize that the Coast Guard plane had entered the runway, despite the runway occupancy alert, and the JAL plane didn't see the other aircraft as it was descending due to limited visibility. The accident occurred around 5:47 p.m., after sunset.

Five of the six people aboard the Coast Guard aircraft died. The pilot survived but was seriously injured.

All 379 passengers and crew on the passenger plane escaped just before the jet erupted into flames.

• My dad started a gift-giving tradition years ago that he coined the 'go-to gift.'
• He lets the recipient choose, but they have to pitch him on how they'll use the gift.
• It encourages conscious spending and prioritizing quality.

My dad doesn't like spending money — and he wouldn't mind me writing that.

He also doesn't like having excessive things. He keeps his space neat and tidy and buys only what he needs. An early lesson he instilled was the difference between a "want" and a "need," and he taught my brothers and me to spend only on the latter.

Gift-giving presents a challenge to my minimalist, money-conscious father, as it often involves spending money and spending money on things. He could opt not to buy us anything, of course, but he's more of a softie than he lets on.

His solution for his three kids, at least, is what he's coined the "go-to gift."

The concept is this: For any gift-giving event, such as a birthday or Christmas, he'll buy one "go-to gift" only after the receiver has successfully pitched him on why he should buy it.

I can pitch anything, within reason, but I have to convince him that I'll use it or that it'll add value to my life. As he likes to say, "Anything goes … as long as it's utilitarian."

His strategy is useful for him and me: He feels better about how he's spending his money, and I have to spend time thinking about what I value and what items or experiences could have an additive effect.

In 2021, ahead of a particularly busy road racing schedule, including the Boston and New York City marathons, I pitched him on a pair of carbon-plate running shoes. One year, he subsidized my gym membership for six months. This year, he's buying me a case of tennis balls. The activity-focused gifts are a relatively easy sell for my dad, who values health and movement just as much as I do.

He hasn't flat-out turned anything down yet, but when I asked for a pair of high-quality joggers one year, he had a few follow-up questions. That was in 2017, and I like to remind him that I still own and wear them seven years later.

Around the holidays, when his gift-giving tradition is particularly top of mind, it reminds me to spend consciously — to think before I swipe my credit card and ask myself why I'm purchasing what I'm about to purchase. Sometimes, I can justify it; other times, I can't.

The second money lesson folded into his tradition is to buy quality. Rather than trying to "save money" in the moment by buying the cheapest version of an item, I'd rather spend extra on something that will last longer and save me in the long run — something like the joggers that are still kicking after seven years and hundreds of wash cycles.

• Brennan Schlagbaum has zero interest in managing properties but wants exposure to real estate.
• His solution is to invest in real estate syndications, which are completely hands-off.
• This is when a group of investors pool capital to purchase a single investment.

Brennan Schlagbaum recognizes the advantages of real estate — from the tax benefits to portfolio diversification — but he's not willing to buy and manage an investment property.

He says he has his hands full with simply maintaining a primary residence: "I hate real estate with a passion. If something breaks in my house, I call somebody."

To benefit from real estate without having to actually own and operate properties, he invests in real estate syndications.

"I think it's one of the best ways for somebody that hates real estate but understands the tax benefits of real estate to get in because you don't have to do anything," the self-made millionaire and founder of Budgetdog, who built his wealth primarily investing in low-cost index funds, told Business Insider.

How real-estate syndications work

In real-estate syndication deals, a group of investors pools together their capital to purchase a single property managed by the syndicator.

Once the investor contributes capital, their role in the deal becomes completely passive. The real-estate syndicator is responsible for finding the deal, executing the transaction, and, ultimately, delivering returns to the investors.

"You lose control from that aspect. You don't really have control over how that performs," said Schlagbaum, who said he invests in five multi-family syndications. But if you work with a syndicator with a good track record that you trust, "it's essentially an index fund."

He invests with a syndicator that specializes in multi-family properties.

"They go in, upgrade the units, increase rent prices in a really high-demand area that's underpriced, own and operate that building for a couple of years, and then typically sell it after a three- to five-year period, sometimes up to seven," he explained. "And you don't do anything as an investor; you're just an equity partner. So you literally send some capital their way and hope they do their job."

A good option for established investors looking for hands-off strategies

BI has spoken to a variety of established investors who, after building wealth by acquiring rental properties, are turning to syndication deals for a more passive experience.

"You hear that real-estate investing is passive, and that's certainly not been my experience," said self-made millionaire Tess Waresmith, who owns five units across three properties. "I still think it's a wonderful way to invest, but it's not passive like investing in the stock market is."

She invested in her first syndication in 2023 and likes that it opens the door to bigger investment opportunities.

"I check out the deal and make sure it's something that feels good to me, and then when I invest the money, I'm hands-off. I'm not involved in the day-to-day decision-making of the property," she said. "But as an investor, I get to benefit from investing in the larger unit properties."

Carl and Mindy Jensen, a financially independent couple who have started shifting toward passive-investing strategies, including real estate syndication, also appreciate the hands-off nature of these deals. But it's hard to know what your returns will look like, Carl told BI: "The people running these syndications will tell you they're expecting numbers, and it's infrequently accurate."

It's important to remember that the syndicator is "probably using their best, sunny-day scenarios." That said, "every syndication we've had has actually outperformed the original numbers."

To participate in this type of partnership, you typically have to be an accredited investor, meaning you either must have a net worth of over $1 million or an income of over $200,000 (individually) over the past two years. There's also typically a minimum investment requirement, depending on the syndicator.

But there are workarounds, said Schlagbaum, especially if you're part of a real-estate community or network.

Investors who are part of the community he's built, for example, don't necessarily have to be accredited to participate, since "the SEC deems pre-existing relationships allowable," he said. "They just get access to the deal because they know me."

Sometimes, "Getting around those hurdles is just knowing the right people."

• Real estate investor Ludomir Wanot shares strategies anyone can use to find deals.
• He doesn't expect rates to drop in 2025 and encourages investors to lean into creative financing.
• Strategies such as subject-to financing can help investors avoid excessive borrowing costs.

Real-estate investor Ludomir Wanot wants other investors to know that there are deals to be found — you just have to know where to look.

"I love rentals. I love to see the physical, tangible assets," the Seattle-based millennial, who built his wealth wholesaling and now runs an AI company that helps lenders communicate with their clients, told Business Insider. "The proven, consistent strategy that's worked for me over the last seven years is sticking with the rental strategy of buying at a 30% discount to appraised value, making sure it cash flows at least $500 a month, and the property has to be in an opportunity zone — and I find these properties all the time."

He's acquired five units in Oregon in the last five months, which BI verified by looking at settlement statements.

"They're definitely out there," he said. "But sometimes they're not in Washington. Sometimes you have to look outside the state."

Wanot shared strategies that any investor can use to find deals, what types of properties he's looking for and what he's avoiding, and the simplest way for anyone to break into real estate investing in 2025.

Source off-market deals through wholesalers

One strategy for finding deals is to look for off-market properties — meaning, properties for sale that are not listed on the multiple listing service. While more difficult to find, they're typically easier to negotiate thanks to less competition.

There are various ways to find off-market properties, from real-estate auction websites to Craigslist to door-knocking. There's also wholesaling, which is when the person acting as the wholesaler finds and buys a discounted property and then sells the contract to another buyer.

Having done wholesaling for years, Wanot is aware that "there are wholesalers that consistently find discounted properties, and you can find those people on Facebook, through investment communities, they're all over."

He encourages investors to meet with wholesalers in their area and provide them with specific property criteria. If you're new to investing and haven't yet built a network, start by attending real-estate meet-ups or joining online real-estate communities.

As Wanot has learned, "Surround yourself with people who know more than you, ask questions, and build relationships with all different kinds of people you meet because you never know when you can work with them down the road."

Maximize cash flow with creative financing

Wanot doesn't expect rates to drop significantly in 2025. To get a property to generate positive cash flow in a higher-rate environment, he recommends leaning into creative financing.

"With interest rates remaining high, traditional financing methods may not yield the best returns," he said, but strategies such as seller financing, subject-to agreements, and private lending could help investors lock in better terms and avoid excessive borrowing costs.

Seller financing is when the buyer buys directly from the seller. The seller acts as the lender and provides a loan with agreed-upon terms about things like the interest rate and schedule of payments.

With subject-to financing, the buyer takes over the existing financing. The buyer doesn't actually assume the mortgage — it remains in the seller's name with the same terms — but will make mortgage payments on behalf of the seller.

Private money lending is another way to avoid a bank or traditional mortgage lender, and can be a "great way to avoid high interest rates and fees," said Wanot, adding: "I've had a lot of luck sourcing private money lenders through real estate Facebook groups."

Look for single-family homes that need work

"If you're a new investor, I'd definitely go after the distressed, small single-family homes," said Wanot.

Another tip is to look for property where the seller has "at least 50% equity in the home and has owned it for a long time," he said, as they might be more motivated to negotiate, especially if they're managing it from out-of-state. "I'm looking at owners who are over the age of 50 because the older owners tend to want to get out of the real estate space. It is so draining and requires a lot of physical and mental work."

Wanot owns multi-family properties but has found that they're more difficult to make the numbers work, at least in his current market.

"If you're a sophisticated investor, yes, small or large multi-families are good if you actually have run your numbers 1,000 times and you know exactly what you're looking for," he said. "There have been probably five properties that I was going to buy in the last year that I didn't pull the trigger on because the profit and loss statements that were given to me were significantly different from the actual bank statements."

A common mistake he's seen investors make, especially when it comes to these big multi-families, is just paying attention to the P&Ls, "which are made by the property managers or the owners of the property and show one story," he said. "They're not actually going through the bank statements and seeing what actual revenue is coming in and what expenses are going out."

He also advises avoiding the BRRRR — buy, rehab, rent, refinance, and repeat — method in a high-rate environment: "It hasn't really been working the last couple of years because the interest rates are so high right now, and so smart investors are moving away from that."

The easiest way to get started: Rent a portion of your home

For most new investors, the simplest and most risk-averse way to get started is "creating rentable units in their single-family home space," said Wanot, referring to a strategy known as "house hacking."

This requires owning a primary residence and converting a garage, basement, or even a bedroom into a rentable space. If you have a bigger budget and meet zoning requirements in your area, another option may be to build an ADU.

At a minimum, renting out a portion of your home will reduce your mortgage — and could even fully cover it. Lowering your monthly housing payment could then help you save up to buy a proper investment property.

Wanot's top advice heading into the new year, however, is to actually implement what you read about and learn. Taking action could be as small as joining a real estate community and networking.

"People are buying programs, they're going to the events, they're watching people come up onstage and talk about how wealthy they got through a particular strategy. But very few people actually implement anything they're being taught," he said.

"The day we actually stop listening to and reading all these stories, podcasts, and YouTube videos and actually apply ourselves is the day we're finally going to start seeing progress in our lives."

• To find deals, Dion McNeeley focuses on how many days a property has been on the market.
• The investor targets properties that have been listed for at least three times the average.
• The 'days on market' strategy helped him negotiate a seller down by $100,000.

Real-estate investor Dion McNeeley used to prioritize speed when making an offer.

"The first 10 years of investing, I wanted to be fast. I wanted to get an offer in within a day or two of a property hitting the MLS," the veteran investor told Business Insider, referring to the multiple listing service.

Now, with a 16-unit portfolio that generates enough cash flow to more than cover his lifestyle, McNeeley is less focused on acquiring properties quickly and more concerned with finding the best deal. To do so, he's paying attention to one specific metric: the number of days a property has been on the market.

Generally speaking, the longer a home has been on the market, the more motivated the seller will be. "Long" is relative to the average time a home sits on the market, which varies by location. In some areas, the average could be 10; in others, it could be 30.

McNeeley, who studies his market in Tacoma, Washington by looking at listings daily, knows that the average home sits for six to nine days, at least in December of 2024.

His rule of thumb is to take the average and triple it. That's the number you're looking for when looking at listings. In his case, he rounded up the average to 10 and is looking specifically for homes that have been listed for at least 30 days.

When he comes across a property he likes that meets his days-on-market criteria, he makes an offer that will get him the return he's looking for.

For example, the latest property he purchased — a duplex that needed a lot of work done — had been on the market for over 100 days. It was listed for $500,000, but based on the renovations McNeeley would need to complete, he calculated that the deal would only work if he could buy it for significantly less. BI verified all of his property ownership claims.

"I offered 400,000 because that's the number that made sense for me," McNeeley said. His offer initiated a two-month negotiation. "I never moved from 400. It went from 500 to 477 to 444 to 422. When I got another offer accepted somewhere else, I contacted them to say I was pulling my offer. They said, 'We'll take your 400.'"

If you're going after a home that's been on the market for longer than average, there may be something wrong with it, and it's important to do your due diligence. Or, it could simply be listed poorly.

"Maybe the agent was lazy and took bad pictures or doesn't have it listed correctly," said McNeeley.

In his case, it was a bit of both: The property, which he purchased in July 2023, ended up needing $62,000 worth of renovations, which he was prepared for, and it wasn't what it appeared on the listing. It was listed as a single-family home but was actually a duplex, which he found out by calling the gas and utility companies and asking how many meters there were.

"It had two meters for electric and two meters for gas. Everything about this was duplex, but the picture looked like a house, and the realtor listed it as a house," he said.

Talking to the gas company, he learned that the gas hadn't been paid in months and had been shut off, further indicating that he could be working with a motivated seller.

"That's one of the reasons when I offered 400,000, I didn't raise the number," he said, figuring, "If the seller has to sell, they'll take my number. If they don't have to sell, they'll just leave it listed, or they'll take it down and not sell. So, you're not always guaranteed to get a low offer accepted. Sometimes people don't have to sell — they are just willing to for a higher amount."

• Dion McNeeley used a buy-and-hold strategy to build a 16-unit rental portfolio.
• He experimented with the BRRRR method by purchasing and renovating a duplex in 2023.
• He could eventually sell the property and leverage an IRS rule to avoid capital gains tax.

Dion McNeeley spent over a decade carefully building a portfolio of rental properties throughout Washington State.

"I've never sold a property. I've never done a cash-out refinance. I've never taken out a home equity line of credit," he told Business Insider. "I'm the slow, boring investor: Save up a down payment, buy the next place; save up a down payment, buy the next place."

His buy-and-hold strategy allowed him to quit his day job in 2022 and retire in his early 50s. He had enough rental income coming in from his 16-unit portfolio to sustain his lifestyle and then some.

In 2023, he decided to experiment with the BRRRR — short for buy, rehab, rent, refinance, repeat — method and purchased a beat-up duplex outside Seattle.

"I don't think people should start investing with the BRRRR strategy. There are so many mistakes that you can make with the after-repair value, the estimated cost, and the estimated time of doing repairs," said McNeeley, who scaled his portfolio by "house hacking," a strategy that involves buying a multi-family property, living in one unit, and renting out the rest. "I didn't do any BRRRRs to reach financial freedom and retire early."

The early retiree shared his experience doing a "live-in BRRRR" — he lived in the duplex while doing renovations — including how he found the property and added value, and the strategy he could eventually use to sell and sidestep capital gains tax.

Finding a deal by focusing on 'days on market'

The first step to successfully executing a BRRRR is finding a distressed property with potential.

Real estate investors tend to agree that you make your money on the purchase — not on the sale. To land a good deal in 2023, McNeeley focused on one specific metric when combing through listings: the number of days a property has been on the market.

"I'm watching what are called 'days on market,'" he said. Generally speaking, the longer a home has been sitting, the better chance you have of negotiating a deal with the seller. "Long" is relative to the average days on market, which varies by location. "In some, it's 10; in others, it's 30."

In his area in Washington, he said the average is between six and nine days. He narrowed his search to properties that were listed for at least three times the average, or about 30 days.

The duplex he ended up buying had been on the market for over 100 days and was listed for $500,000.

"I offered 400,000 because that's the number that made sense for me," said McNeeley. After about two months of negotiating, he got it for the number he wanted. "I never moved from 400. It went from 500 to 477 to 444 to 422. When I got another offer accepted somewhere else, I contacted them to say I was pulling my offer. They said, 'We'll take your 400.'"

Putting $62,000 worth of renovations into the property

When McNeeley bought the duplex, one of the units was "completely destroyed," he said. "It needed drywall, plumbing, electric. It wasn't livable."

The unit he moved into wasn't much better. It was "close to not livable," he described.

He said he spent $62,000 and 10 months renovating. In May 2024, a tenant moved into the second unit.

"With the appreciation of the last year and the other unit being rented, the property is worth about $700,000, so I've made close to $300,000 in profit," said McNeeley, who bought the house in cash.

Avoiding financing was important to him.

"One of the biggest problems with the BRRRR method is the funding source," he said. "For the 'repair' part of BRRRR, a lot of people borrow hard money because they want to buy a property that you can't get traditional lending on. That hard money will have a higher interest rate — and usually within six months or a year the interest rate goes up a lot, so you want to get the repairs done and get it rented out within that six months or a year, whatever your timeline is, and then refinance to a traditional mortgage."

He bought in cash to avoid the time crunch.

The price of doing a 'live-in BRRRR': Living in a construction zone

The 'live-in BRRRR' has been lucrative for McNeeley. When he started the project, he moved out of the unit of one of his properties — a fourplex — and filled it with a tenant. Now that all four units are rented, the property is "almost making $4,000 a month without me living there," McNeeley said.

He moved into the duplex, which he purchased in cash, so he doesn't have a mortgage. He pays taxes and insurance, but the unit he fixed up rents for $2,125 a month and more than covers his expenses, "so I'm being paid to live where I'm at," he said.

The major tradeoff was living in a construction zone and without a kitchen and bathroom for months during the renovation

"I would literally go to the state park up the street to take showers. It was almost like camping for two months," said McNeeley. "I was willing to do some things that people aren't."

What's next? A cash-out refi or selling and avoiding up to $250,000 in capital gains tax

Now that the rehab is complete, the next step of the BRRRR method would be to refinance.

"I could do a cash-out refinance and get my money back because I've added the value to the property," he said. "I could take $500,000 or $600,000 out and go buy another rental and increase my cash flow. That's a good outcome."

Or, he could divert from the BRRRR and sell the property. This option intrigues him because of the Section 121 Exclusion, an IRS rule that lets taxpayers exclude up to $250,000 of the gain from the sale.

The main requirement is that you must use the home as your main residence for at least two of the five years preceding the sale, which McNeeley will satisfy in July 2025. If you're selling a vacation home, for example, you can't use the exclusion. You can also only use the exclusion every two years.

"I could sell it, make a couple hundred thousand dollars in profit, and not have to pay a penny in taxes — and either go and repeat the process somewhere else or go buy something with the gains and have a bigger, nicer place," he said, adding that he likely won't do another live-in BRRRR because of the rougher living conditions.

"I probably won't know until July when I have an appraisal done on if I'm going to do a cash-out refinance or I'm going to sell the place," he said. "It's really hard to make a decision when both outcomes are positive."

• Brennan and Erin Schlagbaum switched from index funds to ETFs in October 2024.
• Vanguard's new automatic ETF investing prompted the conversion.
• The ETFs they switched to have a slightly lower expense ratio and may be more tax-efficient.

Brennan and Erin Schlagbaum built a seven-figure net worth by investing primarily in three Vanguard index funds.

For years, more than 95% of their stock-market money was in the Vanguard Total Stock Market Index Fund (VTSAX), the Vanguard Total International Stock Index Fund (VTIAX), and the Vanguard Emerging Markets Stock Index Fund (VEMAX).

In October 2024, the millennial couple said they moved 100% of their index funds to ETFs within all of their accounts in response to Vanguard rolling out automatic ETF investing, allowing investors to schedule recurring investments. Previously, Vanguard investors could not make automatic investments into or out of ETFs.

ETFs and index funds are similar — in fact, most ETFs are index funds — and can offer long-term returns, diversification, and cost savings thanks to low expense ratios. One key difference is how they're traded: ETFs can be bought and sold throughout the trading day, while index funds can only be bought and sold once a day at the close of the trading day. ETFs also typically require a lower investment minimum. You can buy a Vanguard ETF for as little as $1, for example, whereas most Vanguard mutual funds have a $3,000 minimum.

It made sense for the Schlagbaums to switch to ETFs for two main reasons.

"The first is, the expense ratios on the actual funds themselves are slightly cheaper, so there's a savings there," Brennan told Business Insider, noting that it's a very small difference.

Secondly, ETFs may offer tax savings when compared to index funds. ETF investors are taxed only when they sell the investment, while investors who own mutual funds — and index funds qualify as mutual funds — are liable for paying some capital gains taxes when a fund sells assets and realizes a gain.

"Given the nature of an index fund, this doesn't really occur much," noted Schlagbaum. "However, it can, and I'd like to eliminate it entirely if I had the choice."

As for the actual conversion from index funds to ETFs, Schlagbaum's experience was "super easy," he said. "You can call Vanguard directly, and they can do it over the phone, or you can just go in the platform, and all you do is swap the funds for the same exact ETF. For example, our biggest holding — VTSAX — the equivalent ETF is VTI."

The equivalent of their VTIAX holding is VXUS, and the equivalent of their VEMAX holding is VWO.

Notably, the conversion did not trigger a taxable event, he added: "Typically, if you're in a taxable brokerage account and sold out VTSAX, you'd have to pay capital gains on that move. But because Vanguard rolled out fractional ETF shares as part of their roll-out, they basically shielded all taxes from any investors that make this move."

Just because he's putting his money into ETFs doesn't mean his strategy is shifting. Schlagbaum is still playing the long-term, buy-and-hold game — and he's not dismissing low-cost index-funds, by any means.

"If you stay in index funds, it's not going to make or break you long-term," he said. The way he sees it, the ETFs he converted to are very similar in terms of their holdings, just slightly more tax-efficient.

It's difficult to quantify how much the move could save him in the future.

He said the difference in the expense ratio is "super minor." VTSAX, for example, has an expense ratio of 0.04%, while its equivalent ETF, VTI, has one of 0.03%.

As for the capital gains aspect, "that's very dependent year-to-year based on the manager that's holding that fund and how they buy and sell and the transaction activity within that fund, so it's impossible to calculate that."

If he had to estimate, "Long term, I would say it's probably a six-figure move, which isn't that big over a 30- to 40-year period. But, it's like, why wouldn't you take it? It's low-hanging fruit in my opinion."

• Real estate agent and investor Dana Bull says don't count on rates dropping in 2025.
• Instead, she offers two tips for securing a lower mortgage rate in any environment.
• She advises talking to at least three lenders and considering temporary rate buydowns.

If you're looking to buy a home or invest in real estate in 2025, don't wait for rates to drop before making a move.

"I wouldn't base my whole plan around, 'Well, I keep hearing rates are supposed to drop,'" said investor and agent Dana Bull, noting that current rates are in line with the historical average. "This is kind of where rates sit. So, if they were to drop, that would be great, but I wouldn't be banking on it."

As of December 2024, the average 30-year mortgage rate fell to 6.30% from around 6.56% in November.

That doesn't necessarily mean you'll end up with a rate in the 6-7% range if you're buying property in 2025. Bull, who is financially independent thanks to her personal real estate portfolio and works with buyers in Massachusetts, shared two strategies to lock in a lower-than-average mortgage rate in any environment.

1. Negotiate

"People don't really realize that you can negotiate your rate," said Bull. "I know it's uncomfortable in our culture to feel like you're haggling over a rate, but I think it is really important going into a purchase that you are trying to negotiate the lowest rate possible."

It's especially important in today's environment, she added, as purchase rates are lower than refinance rates: "If I were to go and refinance property right now, I would have a higher rate than somebody who wants to go and buy that same property today. I know everybody just says, 'Buy it, don't worry about it, refinance if rates drop.' But rates need to drop significantly enough for you to be able to go and secure a lower rate as a refi."

Bull recommends talking to three different lenders, including at least one bank and one mortgage lender.

"The banks can be a little bit more nimble," she explained. For a first-time homebuyer, for example, "a bank is going to have access to certain programs versus a mortgage company." That said, "the mortgage companies are often really big, so there are some advantages there."

If you talk to three different lenders, you'll likely get three different rates — and they could vary more than you think, Bull said: "We are seeing so many fluctuations."

If you have a rapport with a lender, you can always give them the chance to match the lowest rate you were offered.

"If they can't, unfortunately, it's a business transaction, so you'll have to make a hard decision," she said. "If somebody comes in with a significantly lower rate and everything else is the same essentially, it does make sense to go with that lower rate, so long as that lender is going to be able to close the deal."

2. Consider a temporary rate buydown

Temporary rate buydowns, which reduce the buyer's interest rate for a limited period, typically between one and three years, have become more popular as rates have increased.

"It's in the form of a buyer credit," explained Bull. "There is a max amount which will depend on several factors, like purchase price and prepaids." As an agent, she works with the lender to determine the exact numbers for each property.

Bull says that she and her clients are turning to buydowns, which are negotiated between buyer and seller, in cases where the properties aren't as competitive, don't have multiple offers, or if they're working with a motivated seller.

"Instead of negotiating something like a closing cost credit or negotiating on price, we might be negotiating something called a '2-1 buydown,'" she explained. This lowers the interest rate for the first two years of a loan. "For instance, the first year, if they were ordinarily going to get an interest rate of 6.5%, we can figure out what amount of money is needed to get them down to 4.5% that first year, and then the second year maybe it steps up to 5.5%. That can shave thousands of dollars off."

This could make sense for a buyer who predicts the first few years of ownership will be cost-heavy, and a lower rate could provide some cushion.

"It's not always something that you can negotiate, and it doesn't always make sense, but there are definitely situations where we're doing it because why not?" said Bull, adding that it's important to consider your priorities before doing so because you can't negotiate everything.

"If you have a seller that's willing to negotiate, then you can decide, 'Should I be negotiating a buydown? Should I be negotiating a credit? Should I be trying to get them to repair stuff at the property?' It's looking at the bigger picture and deciding, as a buyer, what would be most helpful for me at this point?"

• Financial independence writer Andre Nader built a seven-figure net worth before age 40.
• The former Meta employee shares his top money-related books, including 'The Simple Path to Wealth.'
• Another one of his favorites, 'Die With Zero,' helped him become more comfortable spending his money.

At 37, Andre Nader has enough in savings that he doesn't expect to ever have to work a 9-to-5 again.

After 15 years working in tech — nine of which were at Meta — he was laid off in 2023. Rather than job search, he leaned into the Substack publication he started in 2021, FAANG FIRE, and started doing one-on-one coaching. FIRE stands for financial independence retire early.

He and his wife, who works as a designer for Uber, had been preparing to retire early and had already built a sizable, seven-figure nest egg. Between her tech income and their savings, they had enough to sustain their family of three in San Francisco. While Nader is technically retired in his 30s, he says he'll consider himself "semi-FIRE'd" until his wife walks away from her job.

The financial independence blogger and coach shared three books that changed his money mindset and helped him build wealth.

"The Simple Path to Wealth" by JL Collins

JL Collins' 2016 book is a popular choice within the FIRE community.

The author delivers on his promise of providing a simple path to wealth — his main advice is to buy stocks via Vanguard's Total Stock Market Index Fund — which Nader said he appreciated as a former tech employee: "Particularly in tech, a lot of our work involves being hyper-creative or being extremely analytical and doing very complicated things in our day-to-day. We think we need to take the same approach to our finances."

Collins rejects that belief and suggests the opposite, Nader said: "It doesn't have to be complicated. You can rely on the math that other people have done and then keep it boring."

Nader didn't always keep things simple: He said he lost a good chunk of money trading options in his early 20s. However, once he learned about low-cost index fund investing, he was sold on the effective and hands-off strategy. He's built wealth by investing primarily in Fidelity and Vanguard index funds, including VTI and VXUS.

"Die With Zero" by Bill Perkins

Nader says his spending philosophy shifted after reading Bill Perkins' unconventional financial guide.

While saving money always came naturally to Nader, which was a good quality for someone pursuing FIRE, his frugality sometimes prevented him from spending on things that would enrich his life.

Perkins' book was "a good counter for me," he said. "I'm naturally frugal and naturally live within spreadsheets. 'Die With Zero' forced me to think about experiences more in the same way that I think about my finances: Just like my finances can compound, life experiences can also compound."

Nader says that one of the frameworks detailed in the book particularly resonated with him: Think about your life in five-year buckets. Then, maximize the experiences that make the most sense during those timeframes.

For example, in the first five years of his daughter's life, "maybe those aren't the best years for going to Disney World," he said. "Maybe that's going to be when my daughter is five to 10."

At 37, he's also thinking about prioritizing more adventuresome activities while he can: "In my 55 to 60 bracket, I probably don't want to be downhill skiing because maybe my knees aren't going to be in a place they are while I'm in my 30s and early 40s. So having those experiences matched up with my life stages is helpful."

"Enough" by Jack Bogle

When Nader decided to pursue FIRE, one of the first steps he took was establishing his "enough number," a concept he read about in Vanguard founder Jack Bogle's book.

It's essentially the amount of money that would allow him to never have to earn another dollar.

"'Need' is the big thing," Nader said. "You can continue earning more, but you don't necessarily need it to hit your goals and to live the life that you want. For me, that was always a big motivating factor."

As of late 2024, his "enough" number is around $5.6 million, which he calculated by considering his family's annual spend in San Francisco and future costs like healthcare and his daughter's education.

Having experienced a layoff in 2023, he's hyper-aware that life happens, and his expenses and circumstances will continue to change. For that reason, "I'm constantly running my numbers and trying to calculate how much enough is."

• Real-estate agent Dana Bull advises submitting home offers two days before Christmas.
• In general, buyers are distracted during the holidays, so it can be a good time to score a deal.
• Another good window of opportunity is the Fourth of July weekend.

If real-estate investor and agent Dana Bull was looking to expand her portfolio, she'd be putting in offers in late December — specifically, two days before Christmas.

December 23 is her "favorite day of the year to submit an offer," she told Business Insider. "I find that sellers are very interested in getting a deal done going into the holidays or going into this year."

Bull works in real estate in a variety of capacities: She's a licensed agent, does real-estate consulting and coaching, and is a seasoned investor who owns multi-family and single-family homes throughout Massachusetts.

She's learned that if you want to land a good deal on a property, timing matters.

"It's always a good time to be deal hunting during a distracted market," Bull said — and people tend to be distracted over the holidays. "Most people are just in coast mode, but if you're not in coast mode or if you can take yourself out of coast mode, this is such a great time."

Starting a negotiation a few days before Christmas is a good time for several reasons.

"In general, people are in good spirits, and sellers tend to feel a sense of relief if they receive an offer because they usually aren't expecting one," she said. "Christmas Eve puts a deadline to get things wrapped up with the negotiating and creates a sense of urgency."

She says she would avoid submitting an offer on actual holidays — "it's a bit rude and unrealistic to get a response" — but the days following Christmas are fair game. "I almost always submit an offer that week. It's a time of great reflection, and sellers are generally motivated to put a deal together so they can enter the new year with a plan in place."

The holiday window of opportunity is small. A couple of weeks into January, "it's like a light switch comes back on," she said, noting that mid-January is one of her busiest times of the year for consultations. "What I've noticed is this herd mentality where everybody just ebbs and flows at the same time, so if you can be flowing when everybody else is ebbing, this is when you can negotiate."

That said, "You don't want to make a bad purchase just because it's a good time of year," Bull added, but if you can carve out time to look for deals when most other investors aren't, you could be rewarded.

"There are always these pockets, like the Fourth of July is another great time where people have signed off, and I'm almost always working with somebody that weekend to try to scrounge something up."

Seasonal swings aren't a myth, and they can be significant. In her market, for example, "Massachusetts has huge seasonal swings in average pricing by like $100,000."

Regardless of your market, however, in the winter, "prices always come down," Bull explained. "And then they're going to start to climb. Then, in the summer they come back down again and they climb again in the fall. Every year it's the same quarterly trend, so if you are looking to buy a house, right now is one of the best times."

• Andre Nader sold his Austin rental due to stress outweighing financial benefits.
• He and his wife, who moved to SF in 2014, have found renting to be more cost-effective than owning.
• Nader says he doesn't need to own real estate to hit his FIRE goals and focuses on index fund investing.

Andre Nader has been both a homeowner and a landlord — and neither are for him, at least at this moment in time.

Shortly after getting married in 2012, he and his wife bought a home in Austin. When they moved to San Francisco in 2014 for a job Nader landed with Facebook, they kept it as a rental rather than selling. Their original plan was to move back to Texas.

Nader decided to self-manage the rental from nearly 2,000 miles away, which he did for a year and a half. When his tenant gave notice to move out and Nader flew back to Austin to deal with the turnover, he was surprised with what he found.

"The place was just kind of trashed," he told Business Insider. "It needed all-new carpet. It needed a lot of work."

While the extra income had been nice — he said the property generated a cash flow of a couple of hundred dollars a month — ultimately, it wasn't worth it.

"The stress and the mental overhead were drastically outweighing any of the short-term financial benefits," said Nader, who decided to sell rather than find a new tenant. Plus, he and his wife, who had started working as a designer at Uber, were enjoying the Bay Area and found themselves pushing out their timeline. "I was never convinced we would stay in San Francisco for the long term, but I became more and more confident that we wouldn't be immediately back to Austin."

Choosing to rent to save on housing in SF and leaning into index fund investing

Nader, 37, has been pursuing FIRE (financial independence, retirement early) since his 20s. He and his wife have always lived below their means, and for years, they kept their expenses low enough so that just one of their tech incomes could cover all of their household expenses, allowing them to invest about half of their combined income.

When they moved to the Bay Area, renting made sense from a budget perspective: It was cheaper for them to rent in the pricey city — and it still is, said Nader: "Right now, San Francisco really favors renting. It's really hard from a pure numbers standpoint to make owning make sense."

There are exceptions, he noted: "Particularly in a place like San Francisco, a lot of the math can change with the appreciation of property values. If housing prices continue to increase, then maybe buying can come out, but if you take conservative approaches to any future increases in housing, renting just ends up making a lot more sense mathematically."

Plus, Nader was never convinced he and his family would stay in San Francisco long enough to make buying worth it.

"The Goldilocks timeline has historically been, five to seven years is when buying starts being more advantageous than renting," he said. "Now when I do the numbers, it's even longer — closer to the 10-year timeframe — and I'd never been confident that I would be in San Francisco that long."

While prudent real estate investing is a viable path to wealth, Nader doesn't believe he needs to own property to hit his financial goals.

His investment strategy revolves around low-cost index funds. He owns various Fidelity and Vanguard index funds, including Vanguard Total Stock Market Index Fund ETF Shares (VTI) and Vanguard Total International Stock Index Fund ETF Shares (VXUS).

Nader describes the strategy as "super boring," but it's effective: It's helped him build a seven-figure net worth, which BI verified by looking at a copy of his investment report.

It's not lost on him that bringing in two tech incomes was a major advantage.

"I won the income game by being in tech, by being a dual-income household. I didn't need to be taking these outsized risks by investing in extremely speculative ways. I could be boring in my portfolio," said Nader, who worked at Meta for nine years before he was affected by the company's 2023 layoffs.

He and his wife had enough between their savings and one tech income that he didn't have to find another job, but he says he'll consider himself "semi-FIRE'd" until his wife also walks away from her job.

Nader, who spends his days writing on Substack and doing one-on-one financial independence coaching, says his investment strategy has remained the same since the layoff. He likes the hands-off approach to index fund investing, especially after experiencing what it's like to own real estate.

When he was managing the Austin rental, "I kind of quickly realized that the promise of real estate being a clearly passive investment, even if you have property managers, wasn't something that, for me, proved to be true, so it further reinforced my view around focusing on super boring, low-fee index funds," he said. "I could have a few hundred thousand dollars in real estate and maybe a million dollars in index funds, but I would be thinking about the real estate three times as much, so it would be a disproportionate amount of mental exercise, at least for me."

• FIRE blogger Andre Nader and his wife have been working toward early retirement for years.
• When they were both working full-time in tech, they lived off of one income and saved the other.
• Nader broke down their household budget from March 2023 to February 2024.

When Andre Nader sat down to calculate his "enough number" — the amount of money that would allow him to never have to earn another dollar and give him the option to retire early — the first thing he did was analyze his spending.

From there, he could work backward and estimate how much he'd need to sustain his family of three's lifestyle in retirement.

Members of the FIRE (financial independence, retire early) community typically use the "4% rule," which suggests that you can safely withdraw 4% annually from your nest egg. For example, if you retire with $1 million, you should be able to withdraw $40,000 from your retirement funds each year without running out of money. To figure out your number using this rule, you simply multiply your annual spending by 25. Nader prefers to use a more conservative 3% safe withdrawal rate, which you can calculate by multiplying your annual number by 33.33.

He and his wife, who works as a designer for Uber, had been preparing to retire early together. They were on track to do so until Nader was affected by Meta's 2023 layoffs. The couple had enough between their savings and one tech income that Nader didn't have to find another job, but he says he'll consider himself "semi-FIRE'd" until his wife also walks away from her job.

They built a seven-figure net worth thanks to a variety of factors, including high incomes — "I won the income game by being in tech, by being a dual-income household," said Nader — but they've also been disciplined savers and investors.

Nader, who describes himself as "naturally frugal," said that he and his wife always kept their expenses low enough so that just one of their tech incomes could cover all of their household expenses. This allowed them to invest about half of their combined income in low-cost index funds.

Between March 20203 and February 2024, the family of three residing in San Francisco kept their annual expenses around $140,000.

Nader, who writes about financial independence on his Substack, FAANG FIRE, broke down his family's annual budget:

Housing: $60,000 a year ($5,000 a month). The biggest chunk of their budget (42%) goes toward rent. "Running the numbers for my personal situation, I have never been able to make home ownership pencil in within San Francisco," he wrote on his blog.

Shopping and personal: $21,473 a year ($1,789 a month).

Children: $18,136 a year ($1,511 a month). This spending category, which includes education, childcare, activities, and necessities like clothing, decreased significantly after Nader's daughter graduated from preschool and started at public school as a kindergartner.

He broke down the costs within this spending category between March 2023 and February 2024 in a separate chart.

Food: $16,284 a year ($1,357 a month).

Travel and vacations: $10,443 a year ($870 a month). Now that his daughter is getting older and travel is more manageable, Nader says he's intentionally trying to increase spending in this category.

Bills and utilities: $6,241 a year ($520 a month).

Health and wellness: $5,363 a year ($447 a month).

Transportation: $2,741 a year ($228 a month). Nader and his wife share one fully paid-off car. They also are on a pre-paid maintenance plan for the next four years.

Miscellaneous: $1,201 a year ($100 a month.)

Increasing his budget heading into 2025

After being laid off in 2023, Nader is hyper-aware that life happens, and his expenses and circumstances will continue to change.

His spending has already increased since he ran his numbers in early 2024. Most notably, his family moved so that they could be within walking distance of their daughter's school. The move bumped his rent from $5,000 a month to $8,000.

He's thinking about 2025 as an experimental year and is doing some "boundary testing" on their spending, particularly while his wife is still working.

"It's much easier to increase spend while someone in your house is working, so right now, we're like, 'Hey, what would it be like if we did live in a single-family home in San Francisco? Is that the life that we want?'" he said.

His spending philosophy has shifted after reading Bill Perkins' "Die With Zero," he added.

The book was "a good counter for me," he said. "I'm naturally frugal and naturally live within spreadsheets. 'Die With Zero' forced me to think about experiences more in the same way that I think about my finances: Just like my finances can compound, life experiences can also compound. That led me to prioritize travel to a higher degree."

Nader doesn't want to sacrifice a certain quality of life or experiences in his pursuit of FIRE. He recognizes that what he and his family value will shift over time, which is why he periodically revisits his spending and "enough number."

"What 'enough' is in 2022 ended up being different than what I thought 'enough' would be in 2024," he said. "I realized that I did want to spend more in certain places, so I explicitly forced myself to spend more on things like travel. I realized I was unnecessarily saving more than I needed to, and I wasn't spending in a way that was bringing me happiness."

• After years of writing about successful eCommerce entrepreneurs, I decided to start my own business.
• A friend and I pooled $10,000 to launch a pickleball paddle company.
• We outsourced various tasks to save time and, ultimately, improve the quality of our product.

As I've now learned firsthand, starting a business is hard — and takes time. A lot of time.

I didn't doubt that heading into the endeavor, but it's different when you're in it — when you're thinking about your brand and its voice, when you're prototyping a product, and when you start shelling out your own money.

After years of reporting on successful eCommerce entrepreneurs, I decided to try my hand at launching and selling a product. I brought a friend and former roommate on board, and in April 2024, we deposited $10,000 into a business checking account to bring our product idea — pickleball paddles — to life.

Depositing funds was the easy part. The building-the-business part has been a tedious challenge that started nearly two years ago in the living room of our Los Angeles apartment when we first began tossing product ideas around.

We both work full-time jobs and figured outsourcing certain tasks would be key. While we were willing to commit some weekday nights and weekends to our side project, we didn't want it to feel all-consuming. We also know what we're good at — and, perhaps more importantly, we know what we're not so good at. Creating a high-quality brand and product that we were proud of would mean hiring smart, talented people to help with the stuff we're not great at.

Here's everything we've outsourced so far to get Peak Pickleball up and running.

Product sourcing. Our product is the heart of our business — and we only offer one — so nailing the design was crucial. I'd learned from interviewing top Amazon sellers that finding a reliable supplier would be crucial.

In the early stages of the project when we were still messing around with different product ideas, we used Alibaba to connect with suppliers and start to understand manufacturing costs. There were endless suppliers to choose from who were all quick to message back and eager to work with us, but we were hesitant to proceed. The language barrier was evident and the thought of eventually sending thousands of dollars overseas to buy inventory from a supplier we'd never met was nervewracking.

Ultimately, we chose to work with a product-sourcing company founded by eCommerce entrepreneur Joe Reeves. He's familiar with the challenges of finding a good, trustworthy supplier, having gone through the process himself when launching his wallet business. Reeves started the company 330 Trading with a college friend who lives in Taipei and is on the ground communicating in person with various factories in Asia, including the one that is manufacturing our pickleball paddle and packaging.

Packaging design. We hired a freelance designer through Fiverr to help design our packaging. We had an idea of what we wanted it to look like but didn't have the skills (or bandwidth to learn the skills necessary) to execute it.

Website. We also outsourced web design, which neither of us had experience with, and hired a different freelancer through Fiverr to put together a basic Shopify website. Moving forward, we'll be able to do site upkeep ourselves, but hiring someone to create a clean, compelling homepage and build out the other main pages was well worth $158.

The best $250 we spent: Outsourcing logo design

We've spent a lot of money, nearly $6,000, on startup costs. Some of those costs were unavoidable, like the $39 a month we pay for Shopify Basic, while others were more of a choice: We spent about $2,500 to get our paddle approved by USA Pickleball so that it can be used in USAP-sanctioned tournaments. We're betting on the pricey stamp of approval, which also helps legitimize our brand, paying off in the long term.

The costs that we outsourced technically weren't necessary, but they saved us time and, ultimately, improved our product.

One expense that we outsourced, in particular, feels fully worth the cost: We hired a professional graphic designer to develop our logo.

We worked with a friend we knew well and trusted fully. It was a back-and-forth process that started with us answering five branding questions she emailed to us ahead of our first meeting:

1. What are some adjectives to describe how you want your brand to come across? Or how you want people to feel when interacting with it?
2. Are there a few brands that you both really admire (for messaging, logo, brand activity, etc.)?
3. Other than on the paddle where else can you envision the logo being used/interacted with?
4. Do you envision brand activity beyond selling paddles and the marketing efforts to support that?
5. What are the spec sizes/requirements for branding relative to the prototype paddle specifically?

Sitting down and talking through our answers helped us nail down the identity of our brand: We are energetic, playful, and innovative — and our designer created a logo and color palette that represents who Peak Pickleball is.

We paid $250, and it's the best money we've spent on the business to date.

• Jose Palafox used a DST 1031 exchange to defer taxes on his Portland rental sale.
• The strategy allows reinvestment into a trust, so Palafox no longer has to manage a property.
• It wasn't the simplest strategy to execute and involved a lot of paperwork and moving parts.

In the summer of 2024, Jose Palafox took advantage of a little-known tax strategy called a DST 1031 exchange, which allows investors to avoid capital gains tax on the sale of a rental property.

Palafox was ready to sell his Portland rental, which had become more of a headache than a cash cow.

"My HOA fees had increased, my taxes had increased, and rents in Portland had gone down, so I wasn't making much if anything," the San Francisco-based millennial told Business Insider. "And I hadn't ever wanted to be a landlord."

He found himself a landlord when he got a job offer in the Bay Area while living in Portland. Rather than selling his primary residence at the time, he converted it to a rental, heeding common advice to hold onto real estate: "Everyone told me, 'Buy a house and don't sell it.'"

Executing a DST 1031 exchange, in which you sell a property and reinvest the proceeds into a Delaware Statutory Trust (DST), not only allowed him to defer capital gains tax — it also released him from landlord responsibilities. He essentially exchanged his Portland condo for a DST, which holds commercial real estate assets, and now owns fractions of high-grade institutional properties. He receives a $550 dividend payment each month, which BI verified by looking at a deposit made into his checking account from the DST.

Palafox says he's bringing in more from the DST than he was when he was renting his condo, and the investment is completely passive.

It was the right move for him and his financial situation — he didn't need to touch the proceeds from the property sale and could afford to reinvest it — and he avoided a tax consequence while gaining exposure to real estate assets he could never have afforded as an individual investor.

Of course, the process, which Palafox completed in the summer of 2024 according to an exchange statement viewed by BI, didn't come without its barriers to entry. Here are the challenges he faced before and during the exchange.

1. You have to be an accredited investor. To do a DST 1031 exchange, you have to be what's called an accredited investor. There are a few ways to qualify: having a net worth over $1 million, not including the value of your primary residence; having an annual income of $200,000 as an individual or $300,000 if you're married and filing jointly (this is how Palafox qualified); or having certain professional certifications, such as the Series 7, Series 65, or Series 82 licenses.

Unless you're an accredited investor, it can be difficult to even find information about various DST sponsors, noted Palfox, who hired a financial advisor to walk him through his options: "You have to be a qualified investor in order to even see the list of available DSTs."

2. Prepare to deal with a lot of paperwork and multiple parties. In Palafox's experience, there was a lot of paperwork — he said he signed about 10 documents via Docusign from start to finish — and there were a lot of moving parts. In addition to his advisor, he worked with a real-estate agent to list and sell his rental, two separate title companies (one for the property sale and another for the DST), and the DST sponsor.

He also had to find a qualified intermediary (QI). This is a neutral third party that holds the home sale proceeds until the investor buys their replacement property.

3. It can be an emotional roller coaster, especially when your money is with the QI. The most unsettling part of the process for Palafox was immediately after he sold his rental.

"For a period of time it felt like I had no idea where my money was from the sale," he said. On paper, his six-figure sale proceeds were in an escrow account, "but beyond a piece of paper I docusigned and the general say-so of people I'd never met on email I didn't really know how I would get my money back if I had to. My wife accused me of getting into a Ponzi scheme for a while."

He still has some anxiety about his investment because it's so different from anything else he owns. The only "proof" he has that he owns anything is an email from his DST sponsor congratulating him for his purchase, "which is still kind of terrifying," he said.

4. It could complicate your tax situation. "One thing I am not looking forward to is paying taxes," said Palafox. "Depending on the product you could be paying taxes in multiple additional states. I will use an accountant but I expect some increased costs and complications to file come tax time."

Even once you've gotten past the major barriers to entry to doing a DST 1031 exchange, "it's still a lot more challenging and in some ways less satisfying than clicking a button on your favorite trading app and buying stocks or crypto," he added. "There's no ticker to watch, these are boring investments that produce boring returns."

Still, he'd deal with the paperwork and stress all over again if he could go back, particularly because of the "UPREIT" option. Palafox said that what really sold him on this strategy was another tax code "loophole," of sorts, known as the 721 exchange, or UPREIT.

Eventually, a DST will end (most have a predetermined lifespan of five to 10 years), at which point his options are "to either 1031 into another DST or, ideally, be bought by a REIT fund that wants to own and operate these buildings longer term," he said. "Using a 721 exchange, I can roll into the REIT fund, again deferring taxes. At the end of this process, I would own shares in a private or public REIT, which I could fractionally liquidate. So, if I want to sell half of my investment, I could."

In short, at the end of his DST, he could get into a REIT without causing a taxable event.

"When I finally understood the flow from my investment into a REIT fund, the light really went off for me," he said. "I remember saying, 'Wow, this is the future,' and now I'm a bit of a fan, I guess."

• Andre Nader built a seven-figure portfolio by saving and investing in index funds.
• He leveraged his tech career and dual-income household to maximize savings and investments.
• One strategy he used to max out tax-advantaged accounts is known as 'a mega backdoor Roth'.

Andre Nader built a seven-figure portfolio before age 40 by following a few simple fundamentals: save a chunk of your income, invest it in low-cost index funds, and max out tax-advantaged accounts.

It helped that he worked in tech. He said he started with a modest $40,000 salary right after graduating, but eventually landed a high-paying job at Meta in 2014.

"I won the income game by being in tech, by being a dual-income household," Nader, whose wife is a designer at Uber, told Business Insider.

When he got laid off in 2023, he and his wife had enough between her tech income and their savings that he didn't have to find another job. Nader, who'd been writing about financial independence on his blog FAANG FIRE since 2021, now writes on Substack full-time and does one-on-one FIRE (financial independence, retire early) coaching.

As a high-earner who describes himself as "naturally frugal," Nader found himself with excess savings each month. When he was working full-time, he and his wife used one of their incomes for household expenses and saved the other.

He spent a lot of time thinking about, "How do I save this in the most efficient way possible?" he said. "And, for many in tech, it's going to be about taking advantage of those tax-advantaged accounts. Because when you're in those extremely high earning years, any amount that you can defer those taxes into the future is potentially extremely, extremely valuable."

One particular tax-advantaged account, a Roth IRA, offers major benefits, including tax-free growth — but there's an income limit that can prevent individuals like Nader from contributing directly to it. In 2024, single tax filers must make less than $146,000 to contribute to a Roth, and married couples filing jointly must make less than $230,000.

Nader has used a workaround known as a mega backdoor to sidestep the Roth IRA income limit, and he recommends all high-earners take advantage of it if they can.

Using a mega backdoor Roth to contribute up to $69,000 a year into his 401(k)

To understand how a mega backdoor Roth works, it's important to first understand how after-tax 401(k) contributions work. Some employers offer an after-tax 401(k) — Nader had access to one when he was at Meta, and his wife has one at Uber — which allows you to save more after you've maxed out your traditional 401(k).

In 2024, the annual contribution limit for a 401(k) is $23,000 for employee contributions; but the combined employee and employer contribution limit is $69,000. Say you max out your 401(k) and contribute $23,000, and your employer contributes $5,000 through the matching program, so you have $28,000 in your 401(k). Since the limit is $69,000, if your plan allows for after-tax contributions, you can put another $41,000 in after-tax dollars into the account.

In Nader's wife's case, Uber matches up to $8,000, so after maxing out her 401(k) in 2024, she'll make an additional $38,000 after-tax contribution ($69,000 - $23,000 - $8,000), he explained.

The catch is, while sitting in the after-tax state, any earnings you make on those contributions are taxable.

That's where the mega backdoor Roth comes into play. It allows you to shift after-tax 401(k) contributions to a Roth IRA or Roth 401(k), where it can grow tax-free. Not all 401(k) plans allow this conversion and you'll want to understand your plan, including its restrictions, before making any after-tax contributions.

In Nader's experience, executing the mega backdoor Roth when he was working at Meta was quick and easy. He logged into Fidelity NetBenefits (his 401(k) provider) and elected the percentage of his after-tax earnings he wanted to contribute. Then, he was able to do an in-plan conversion and selected the option to "convert after-tax contributions."

"Every single time I post about it on LinkedIn, someone doesn't know that they had this benefit," said Nader, who has nearly 25,000 LinkedIn followers and specifically writes for FAANG (Facebook, Amazon, Apple, Netflix, and Google) employees looking to achieve financial independence. "This extra $30,000, effectively, can end up in a Roth 401(k) — and that's a super powerful type of account."

He recognizes that not everyone has access to this strategy, nor has the funds to save $69,000 a year in a 401(k). But if you're a high-earner who would be saving that money anyway and your plan allows a mega backdoor Roth, "it's really valuable for them to be aware that exists."