Todd Baldwin used rental income from his own home to buy index funds, crossing $1 million by age 25. The strategy is simple, but timing and market selection matter.
Alpha Score of 57 reflects moderate overall profile with strong momentum, poor value, moderate quality, moderate sentiment.
Todd Baldwin became a millionaire in his 30s by renting out rooms in his own home and feeding the income into low-cost index funds, Business Insider reported.
Baldwin bought a six-bedroom house near Seattle for $506,000 when he was 23. He and his girlfriend took the master bedroom. The other five rooms went to tenants. Rent covered the mortgage and utilities, plus an extra $1,500 each month, he told the publication.
By age 25 his net worth had crossed $1 million. Rental cash flow drove most of the gain. Three years later he quit his six-figure job to work on real estate full time.
In 2019 he bought a single-family duplex for $900,000. He listed it on Airbnb. Proceeds went toward maintenance and purchases of Vanguard's S&P 500 ETF (VOO). In 2021 he put more than $1 million into that ETF. The position has since gained about $800,000, the report said.
The strategy pairs steady rental income with the long-term compounding of equities. Starting young helped. Baldwin had no children, so sharing space with roommates was simple. "There's no way I'd have roommates around my kids. If you're young and you're not married and you don't have kids, it can be a phenomenal way to get ahead," he said.
House hacking works only in markets where rent is high relative to mortgage costs, he warned. For diversification he holds some crypto. "With crypto, if you bet on the right one, you can get rich overnight. With real estate, it might take you 10 years, you're going to get rich. With stocks, it might take you 10 or 20 years, you will get wealthy," Baldwin told Business Insider. "You don't have to become lucky. It will just happen if you're in it long enough."
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