You can be on Entrepreneur’s cover!

How My $5,000 Student Loan Became a Multi-Million Dollar Business Sometimes, the wisest investment is one in yourself.

By Ivan Misner

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

zimmytws | Getty Images

Before I tell this story, I want to say up front that I used the student loan mentioned to pay tuition. Taking this into consideration, let me detail how that monetary sum lead to a multi-million dollar company, reinforced by leverage and hard-nosed discipline.

As a founder, most people know me from my business BNI. However, I actually started a property management company three years before I launched my own company.

I was recently going through my old files and ran across the paperwork for an old student loan that I took out during graduate school. It was 1982, and I had applied to USC for a doctoral degree. I really wanted to do my Ph.D. there, but I also had to figure out how I would pay for it if I was accepted. Several years earlier, I had been accepted to Occidental College for my bachelor's degree. I was offered a 50 percent scholarship to go to there, but I couldn't afford the other 50 percent (nor could my family). So I went to a community college and then a state college, because that's what I could afford; by the way, they were still great schools. Although I didn't know how I could pay for the doctoral program at USC, I didn't care. It was my big goal, and I later I applied and was accepted. I received a couple small scholarships, but the lion's share of my tuition still had to be paid for by me.

Related: This One Personality Trait Sets Apart the Good Networkers From the Bad

At the time, I had a full-time job in L.A. but I wasn't making enough money to cover living expenses and the doctoral program. So, I took another job and worked as many hours as I could so I could save up enough money to pay for that semester's tuition. I discovered that one semester at USC shockingly cost me more than my entire bachelor's degree.

I worked the two jobs and I applied for a student loan of $5,000 to help pay for a semester at the university of my dreams. I had no idea if I'd get the loan, but I applied, and I worked to make the money in case I didn't get the loan.

A few months later, right before I was to start at USC, I was approved for the loan. The thing is, I had also saved $5,000 from my extra work to pay much of the tuition in case I was not approved. So, I had $5,000 in cash and $5,000 available as a student loan. What should I do? Should I use my $5,000 cash to pay for school, or should I take the low interest loan for school?

Related: The Importance of Getting Along With Others

I knew I couldn't keep working long hours for the next several years, so I decided to take the low interest loan and use the $5,000 in cash that I had earned and apply it as a down payment on a condominium. And that's where my journey began in the investment property business. You see, I flipped that condo a few years later for a larger house. I then flipped that house a few years later for another larger house, which I then flipped for another two homes. Eventually I flipped those two homes to pay about 50 percent of a commercial property that I was building in Texas.

The original loan allowed me to take my $5,000 in cash and turn into a $1.8 million dollar commercial property. Of course, my wife and I made other cash investments over the years that turned this little company I started into a multi-million dollar business with nine commercial properties and dozens of tenants. All of this happened because I got a $5,000 student loan (and of course, I worked really, really hard to earn money and invest it versus blowing it on things that wouldn't matter in a few years).

By the way, I paid off all my student loans including interest years ago. It was a proud day for me. However, four weeks after the day, I got a letter from another university that read: "Congratulations Dr. Misner, your daughter has been accepted to our school. You can go to this portal to make the tuition payments on her behalf."

This time around, I didn't need student loans.

Ivan Misner

Entrepreneur Leadership Network® VIP

Bestselling Author

Dr. Ivan Misner is a New York Times bestselling author and co-author of the bestselling book, Networking Like a Pro (Entrepreneur Press 2017). He is also the founder and chief visionary officer of BNI, the world's largest referral marketing and networking organization.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

This Dad Started a Side Hustle to Save for His Daughter's College Fund — Then It Earned $1 Million and Caught Apple's Attention

In 2015, Greg Kerr, now owner of Alchemy Merch, was working as musician when he noticed a lucrative opportunity.

Business News

This One Word Is a Giveaway That You Used ChatGPT to Write an Email, According to an Expert

"Delve" has increased its presence in written work since ChatGPT entered the scene.

Business News

Yes, You Can Buy a Foldable Tiny Home on Amazon — And Now It's Selling for Less Than $12,000

The waterproof and flameproof house was listed around $35,000 a few months ago.

Starting a Business

This Startup Wants to Grow Your Side Hustle For You, While Cutting You a Monthly Check

OpenStore gives Shopify owners two interesting options: Sell and walk away with a generous payout, or take a vacation while they do the work.

Side Hustle

This Insurance Agent Started a Side Hustle Inspired By Nostalgia for His Home State — Now It Earns Nearly $40,000 a Month

After moving to New York City, Danny Trejo started a business to stay in touch with his roots — literally.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.