We have learned from Rich Dad that real estate is the road to financial freedom. As our financial education continues, we:
Know how to analyze a property to determine if it is or is not a good deal.
Understand that management is the key to long-term property success. Good management can make a good deal great. Bad management can make a good deal marginal and a marginal deal bad.
Seek out and surround ourselves with like-minded people. Those who shoot themselves in a symbolic foot with negative comments like, “I’ll never be able to do that,” “That’s too expensive,” and “Why bother?” are manufacturing excuses for not trying. We choose not to be in their orbit because they drag us down.
Are learning about what bankers will lend and why and when they will not.
Are also finding out that buying a property is not an emotional experience based on how we respond to how the place looks. We haven’t seen most of the houses in person; we can’t drive by them to check them out, so there is an intangible quality to our ownership. The cashflow, however, is concrete.
One of the biggest changes in our lives concerns risk. Before Rich Dad, my definition of taking chances revolved around the physical challenges of mountain climbing. Now we define inaction as being risky. Continuing on a path that goes nowhere and pouring money into investments over which one has no control is as foolhardy as scaling a mountain without the right equipment.
The other huge change involved my tendency to procrastinate. I’m combating my laziness simply by doing that which I need to do, even though I might not like it. The first four years of our service business, people came to me. Now I have to pursue them aggressively. I don’t enjoy calling people I don’t know but I know I must do it, for work and for real estate investing.
The notion of lack of time or that I wouldn’t act fast enough to achieve my goals was tough for me. But because Rich Dad simplified complex concepts and presented them in a very easy-to-understand manner, I calmed down. With a continuing financial education at my disposal I know we can achieve what we want to do.
My business remains in the S or self-employed cashflow quadrant. It could run in my absence but it wouldn’t grow without my participation. The truth is, it tends to shrink without my constant input. Currently we’re exploring strategies to move it into a B business. One possibility would be licensing facilities in other cities. In order to obtain the free time I want to develop and oversee my real estate investments, this business must be able to run on its own.
Within the next year we intend to buy our first multifamily property, either by ourselves or with a partner. Our five-year goal is to raise our monthly passive income to $10,000 a month. When that happens I will retire from our business and officially exit the rat race. We won’t depend on $1,000 a month from Social Security. Millions of dollars’ worth of real estate will fund the rest of our lives.
That’s a Wrap
We often felt trapped in the present and uncertain about the future. And while the future holds many unknowns, we maintain a far better idea of what is coming and how to prepare for it. We feel that we’re in the midst of a journey, and success is part of the process of getting from where we are now to where we are going. With growing confidence in our increased financial knowledge, we feel that we are doing the right thing for us and for our son. A reality more satisfying than any movie ending, the ultimate goal of reaching financial freedom is ahead.
We feel very proud of ourselves. We look at ourselves, acknowledge how far we’ve come, know we are learning more every day, and take stock of what we already did and what we plan to do. Unlike our younger, more naive selves, we made a conscious decision to find out how the world works, to be open to change, and to be responsible for our financial well-being. And we’re breathing a whole lot easier where retirement is concerned.
We always thought of ourselves as being enormously wealthy; now our financial assets are finally catching up with us.
Copyright © 2003 by Robert T. Kiyosaki and Sharon L. Lechter.