How I Became a Homeowner at 19

When I first came home from the Navy I encountered many well-wishing individuals who would seem to swell with pride as they offered life changing advice to me. With a big smile they would begin their litany of going back to college and getting an education so that I could become a productive member of society. Not only that, but now that I was out of the Navy I would need a job to pay for rent. And by the way, I'd need a place, I'm most welcome to stay with them until I can find a suitable apartment and a job. Then I would share something with them that brought them to an immediate halt.

I am a homeowner.

I didn't acquire my property through inheritance, nor did I hit the lotto. My parents didn't pony up the dough and nobody co-signed my mortgage. When I was 19 years old, I closed on my first home in Pennsylvania. And this is how I went about achieving that goal.

High School Graduation

As graduation approached we all had very different plans. Most of my friends were going to attend local colleges. They would go to class on college campuses that were literally right across the street from our old High School and would still live at home. For them, nothing much would change, at least for the next four years. I, on the other hand, enlisted in the US Navy because I wanted to see the world. Two weeks after graduation, I was on the boot camp bus while my friends were enjoying their graduation parties and relaxing for the last summer before college.

The Savings Plan

While in boot camp I would look at how much money I was being paid and realize that it was all for me. I had no bills and I could spend it on whatever I wanted. I knew myself too well, though. I knew that I could easily spend that money over the course of one weekend. So before I graduated from Boot Camp, I set up a savings plan. Phase one was to keep some money safe where I couldn't reach it until I was sure I wanted to spend it all. I purchased a Certificate of Deposit at 3% interest with my first two paychecks and set up an automatic withdrawl so that every pay period, one hundred dollars would be deducted before I even had a chance to go near my pay. Under this system, I had $200 per month going directly into my savings.

I continued the plan and applied for a credit card. Service members are all but handed credit cards and loan with a simple flash of a military ID. This credit card had an 11% APR with a limit of $500. Every month, I purchased a CD or a DVD, allowed the balance to carry over to the next month, paid off the full balance, and repeated monthly, never allowing the balance to exceed $40. I received orders to Sicily, which entitled me to additional pay and benefits to adjust to the increased cost of living. This was more money for me to save away.

Supplemental Income

With permission from my Commanding Officer, I obtained a part-time job on base working at the Enlisted Club. The meager pay ($6/hr) would have been terrible if I were living off of that money, but to me, it was headed straight into the savings account. Additionally, I took note of some of my fellow sailors who engaged in a practice they referred to as "Shylocking," but what everyone else would consider loansharking. After consulting my personnel office, I learned that I could legally loan money to shipmates provided I charged reasonable interest rates. Those who practiced shylocking generally received a 50-100% return on their money, however, there were many who refused to pay. Because of the questionable legality of the loan, there was no way to recoup lost funds. By charging a more reasonable interest rate, however, I was permitted to offer the loan in writing. This gave me legal recourse if the borrower failed to pay me back.

End of Year 1

With a few thousand dollars in the bank I had many options before me. I could take a vacation and finally see some places I wasn't able to visit on my weekends off or I could invest. My first instinct was to buy a boat. I had talked with a fellow sailor who told me the wonders of boat ownership. Additionally, the ability to live on a boat provided your city has sea access also was a solution to a future housing dilemma when I was discharged. That was until I went poking around on the internet and looking at homes for sale back in Pennsylvania.

I asked my family to tour some of the local houses, take pictures and send them to me via e-mail. Coupled with their recommendations I was able to pick out a three bedroom house (approx. 1450 sq. feet) located in the city of Wilkes-Barre.

I took my leave and purchased the house, setting it up as best I could before returning to Sicily to complete my tour of duty.

I have since sold the house to move on to bigger and better things. However, with only a few minor repairs I was able to sell the house for $35,000 more than I paid for it, making the whole venture well worthwhile.

Franklin said that a "penny saved is a penny earned" and boy is it ever earned. Saving is a hard thing to do and a very tough discipline to maintain. In the end, however, saving and maintaining good credit can get you pretty far as long as you keep your eye on the prize.