- Cody Berman, 26, is a real estate investor and entrepreneur who became a millionaire last year.
- Berman said digital products are great for passive income and are “infinitely scalable.”
- He said real estate was lucrative, but it was much more about work than digital products.
When 26-year-old Cody Berman graduated from college four years ago, he got a high-paying job in commercial real estate lending. He only stayed in that role for seven months before deciding to try working for himself, selling digital products – including e-books, digital downloads for things like planners and calendars that are also printable, and online courses on how to create passive income streams.
By the time he quit his job, Berman was only earning between $1,200 and $1,500 a month from his digital product side hustle and other freelance work.
“People thought I was crazy,” Berman said. “They told me I would struggle to come back.”
It ended up paying off: According to documents reviewed by Insider, Berman has made more than $1.3 million in net revenue from his digital products year-to-date.
This income gave him the opportunity to branch out in other directions, and Berman has since invested in real estate in Massachusetts and Connecticut. He currently owns 13 properties: 11 are used as long-term rentals and two properties he has listed as short-term rentals on Airbnb, according to documents reviewed by Insider.
As of last year, Berman is a millionaire. In addition to the equity in his properties, Berman has also invested more than $550,000 in the stock market, according to documents reviewed by Insider.
Berman said he didn’t share his story because he wanted to brag about his success – he just wanted other young people to understand that what he was able to do isn’t impossible or weird.
“Once you learn this and realize that people actually do it, you can’t unlearn it,” Berman said. “It almost makes you resent your work more than if you didn’t know that people reach financial independence for 30 years.”
He said what really pushed him was learning about other people’s successes at CampFI in 2018, an annual retreat for adherents of the FIRE movement looking to connect with other like-minded professionals.
“I met real people – normal humans – who had achieved financial independence before they were 30,” adding that this personal experience opened him up to the idea and realization that it was possible to achieve this lifestyle. “It just started a fire under me.”
After that, he said he believed there was no reason he couldn’t make it and decided to achieve financial independence as soon as possible.
Along with finding community and encouragement with others within the FIRE movement, Berman said there are 3 factors that helped him achieve the financial success he currently has today.
He saved a nest egg of $50,000 before quitting his job
The amount of cash in hand one should have saved before deciding to quit their job will depend almost entirely on individual needs, Berman says. Committed to living a relatively frugal life in order to achieve financial independence, Berman only needed to save around $50,000 before he felt comfortable enough to quit his job four years ago. .
However, he acknowledges that this is no small amount of money for a recent college graduate. Berman had a few factors that helped him get there: he didn’t have a student loan, he lived at home while working full-time, he got a signing bonus at his corporate job, and his base salary was relatively high for a recent college. graduate.
One of the reasons Berman didn’t have to take out a student loan was because he applied for so many small grants that piled up over time.
“I did about five to six test models that I would scale slightly for any purse,” Berman said. “I ended up applying for between 100 and 150 scholarships in total, and eventually got eight of them.”
Thanks to these eight scholarships, Berman was able to reduce his college bill to a monthly payment of $1,000, which he shared with his parents. Working while in school also helped start Berman’s nest egg.
“And I went to a school that cost $30,000 a year,” Berman said. “So I saved a lot with this scholarship application approach template.”
After he started working in commercial real estate, he saved up the $10,000 signing bonus he was offered and decided to live very frugally and save an estimated 85% to 90% of his income. he, from his work.
“My rent was $350, then it was free, because I came home,” Berman said. “I always drove the same car that I had already paid for and bought the cheapest groceries. I rarely went out to bars or restaurants.”
Berman described the 7-month period as “absolute drudgery” but said it was worth it to be able to quit a 9-to-5 job so early in his career.
Digital merchandising can be very lucrative because it’s “infinitely scalable”
The thing about digital merchandising that Berman emphasizes most is that it’s lucrative because it’s “infinitely scalable.” Its digital merchandise is just that – downloadable products like books and courses – as opposed to drop-shipping, where a physical product is ordered by a customer and shipped by a third-party vendor.
When Berman went freelance, he said it was to trade his time for client projects and it was a very active form of income.
His digital products, on the other hand, caused something of a financial avalanche for Berman, who suddenly found himself earning large sums of money passively.
This is largely because with a good understanding of keyword research and putting your products in front of consumers’ eyes, you can continue to grow your digital merchandising business without having to create anything new. new.
Berman said he likes to conceptualize this as being a musician playing in a concert hall.
“If you’re a musician, you can play in front of one person or in front of 10,000 people – it’s not extra work. You play the same songs, it’s just that now you reach a much larger audience”, a- he declared. said. “That’s kind of how digital products work. It doesn’t matter how many people buy the thing, all you have to do is create that thing and then try to introduce it to as many people as possible. possible people.”
Berman works with a business partner on its digital products and shares the profits. According to documents Berman sent to Insider, he and his partner earn just over $100,000 a month, on average, with monthly incomes reaching $180,000.
For Berman as an individual, that typically means a monthly income of between $50,000 and $60,000 from his digital products and dropshipping alone. He said that his income had almost doubled every year for the past three years from this activity.
“I just played the same songs in front of more and more people, if that makes sense,” he added.
He built a real estate portfolio of 13 doors to increase his passive income
Another thing bringing in even more income for Berman is his real estate portfolio, which now includes 11 long-term rentals and two Airbnbs.
Many of Berman’s properties are multi-unit, and they are primarily located in Massachusetts, where Berman currently lives. He also owns a three-family home in neighboring Connecticut.
He first got involved in real estate investing in 2020. One thing he says about real estate is that it can be very, very lucrative for people trying to achieve financial independence. early, but that it requires “a lot of upfront work”. ”
This includes setting up systems, managing the accounts, screening tenants, and checking that all property services are running smoothly, such as garbage collection and utilities.
“But once you get it all sorted, it only takes a few hours a month to manage them, which is really cool,” Berman said.
One of the problems Berman faced when building his real estate portfolio was the fact that he is self-employed, which is not normally viewed favorably by mortgage lenders.
Originally, Berman tended to look into FHA loans, as well as other home buying methods (“house hacking” for example), but ran into a lot of problems due to the single source of his income. His properties were all considered investment properties which required him to pay 20% cash on the purchase price.
“The biggest down payment was $80,000,” Berman said, but he added that the property had appreciated a lot since he bought it. In addition to smart planning and hard work, short-term success in real estate usually requires a combination of good timing and good luck.
The only downside Berman sees with real estate is that he had to go into a bit of debt to get all of his properties. He told Insider that while he had “about $400,000 to $450,000” in total equity, he also had about $700,000 in debt on his properties.
That said, he said he makes a profit on his properties, and Airbnbs are particularly lucrative. According to documents he shared with Insider, Berman earned $11,000 from Airbnb in September alone.
“Tenant selection is really important,” he added, referring to his long-term rentals, but added that it’s just as important for the landlord to treat his tenants well, as he would expect what tenants treat the property.
“You have to be a good owner,” Berman said. “I think landlords sometimes get a bad rap because they don’t fix their properties. If things break down, obviously you’re not going to have a good relationship with your tenant. So make it a nice place to live and be a human It is human beings who live in your homes.