The Value Of Appreciation

The Value Of Appreciation

Brandon Phillips learned the value of being financially independent by watching his father, who owned a carpet store. “My dad was a person who worked hard,” says the 31-year-old native of Pasadena, California, “but I always appreciated the flexibility he had with his time. He had time for me.”

One of the luxuries financial security provides is the ability to set your own agenda as you work to achieve larger goals. Because his father’s store was successful, Brandon’s mother was able to maintain her job as a teacher so she could get home in time to help her son with homework and other after-school projects. Her extra lessons enabled Brandon to earn an undergraduate degree in marketing from the University of Maryland in 1996 and an M.B.A. from American University’s Kogod School of Business in 2000.

Armed with his business degree, Brandon went to work for Comcast Cable in the Baltimore/Washington regional office as a public relations supervisor, with a starting salary of $33,000. His fiancée at the time, Nedelka, 33, worked for the same firm as a marketing manager. When Comcast and AT&T merged in 2002, the company sent Brandon and Nedelka to Florida with higher salaries and better jobs. Nedelka became area director of marketing, doubling her salary to $100,000, while Brandon’s salary jumped to $60,000.

The couple married in April 2003 and began plotting their financial strategy. Although the higher salaries were great, the new positions came with greater job responsibilities and longer hours. The couple’s jobs seemed to conflict with their desire to start a family. “We knew we wanted a family, and that meant focusing on a way to provide a future for that child,” says Nedelka, who gave birth to their daughter, Kyla, in October 2004. “Brandon also knew he wanted a business, so we made the decision that Brandon would leave his job and we would survive on my salary.”

Real estate seemed a logical next step since the industry was booming and, by 2003, the couple already owned two homes. By adopting Declaration of Financial Empowerment Principle No. 1: to use homeownership to build wealth, the Phillips family built a substantial real estate portfolio.

First, Brandon used his excellent credit to strike a no-money-down deal for a $200,000, three-bedroom townhouse in Silver Spring, Maryland, in 2000. That townhouse is worth $450,000 today. When they moved to Florida in 2002, the couple used $27,000 of their savings as a down payment on a $270,000, four-bedroom home in Pembrook Pines. That property is also now valued at $450,000. And in 2004, they used $66,000 in home equity to buy a three-bedroom home in Ft. Lauderdale for $330,000. The current value of that home is $400,000.

In addition to these houses, the couple owns several plots of land: 13 acres in Tennessee, most of which was bought for $6,000 (Brandon inherited one acre), and is now worth $30,000; a one-acre lot in South Carolina, which cost $30,000 in 2004 and is now worth $70,000; and a commercial lot on the