FINAL THOUGHTS
I would like to share some final thoughts with you.
The main reason I wrote this book, and the reason it has remained a bestseller since 2000,
was to share insights into how increased financial intelligence can be used to solve many of
life’s common problems. Without financial training, we all too often use the standard
formulas to get through life: Work hard, save, borrow, and pay excessive taxes. Today, more
than ever, we need better information.
I use the following story as an example of a financial problem that confronts many young
families today. How do you afford a good education for your children and provide for your
own retirement? It requires using financial intelligence instead of hard work.
A friend of mine was griping one day about how hard it was to save money for his four
children’s college educations. He was putting $300 away in a college fund each month and
had so far accumulated only about $12,000. He had about 12 more years to save for college
since his oldest child was then six years old.
At the time, the real estate market in Phoenix was terrible. People were giving houses away.
I suggested to my friend that he buy a house with some of the money in his college fund. The
idea intrigued him, and we began to discuss the possibility. His primary concern was that he
did not have credit with the bank to buy another house since he was so over-extended. I
assured him that there were other ways to finance a property rather than through the bank.
We looked for a house for two weeks, a house that would fit all our criteria. There were
plenty to choose from so shopping was fun. Finally, we found a three-bedroom, two-bath
home in a prime neighborhood. The owner had been downsized and needed to sell that day
because he and his family were moving to California where another job waited. The owner
wanted $102,000, but we offered only $79,000. He took it immediately and agreed to carry
back the loan with a 10 percent down payment. All my friend had to come up with was
$7,900. As soon as the owner moved, my friend put the house up for rent. After all expenses
were paid, including the mortgage, he put about $125 in his pocket each month.
His plan was to keep the house for 12 years and let the mortgage get paid down faster by
applying the extra $125 to the principal each month. We figured that in 12 years, a large
portion of the mortgage would be paid off and he could possibly be clearing $800 a month
by the time his first child went to college. He could also sell the house if it had appreciated
in value.
Three years later, the real estate market greatly improved in Phoenix and he was offered
$156,000 for the same house by the tenant who lived in it. Again, he asked me what I
thought. I advised that he sell it, using a 1031 tax-deferred exchange.
Suddenly, he had nearly $80,000 to operate with. I called another friend in Austin, Texas,
who then moved this tax-deferred capital gain into a mini-storage facility. Within three
months, he began receiving checks for a little less than a $1,000 a month which he then
poured back into the college fund.
A couple of years later, the mini-warehouse sold, and he received a check for nearly
$330,000 as proceeds from the sale. He rolled those funds into a new project that would
now generate over $3,000 a month in income, again, going into the college fund. He is now
very confident that his goal will be met easily.
It only took $7,900 to start and a little financial intelligence. His children will be able to
afford the education they want, and he will then use the underlying asset, wrapped in his
legal entity, to pay for his retirement. As a result of this successful investment strategy, he
will be able to retire early.
Thank you for reading this book. I hope it has provided some insights into utilizing the
power of money to work for you. Today, we need greater financial intelligence to simply
survive. The idea that “it takes money to make money” is the thinking of financially
unsophisticated people. It does not mean that they’re not intelligent. They have simply not
learned the science of money making money.
Money is only an idea. If you want more money, simply change your thinking. Every self-
made person started small with an idea, and then turned it into something big. The same
applies to investing. It takes only a few dollars to start and grow it into something big. I meet
so many people who spend their lives chasing the big deal, or trying to amass a lot of money
to get into a big deal, but to me that is foolish. Too often I have seen unsophisticated
investors put their large nest egg into one deal and lose most of it rapidly. They may have
been good workers, but they were not good investors.
Education and wisdom about money are important. Start early. Buy a book. Go to a seminar.
Practice. Start small. I turned $5,000 cash into a one-million-dollar asset producing $5,000
a month cash flow in less than six years. But I started learning as a kid. I encourage you to
learn, because it’s not that hard. In fact, it’s pretty easy once you get the hang of it.
I think I have made my message clear. It’s what is in your head that determines what is in
your hands. Money is only an idea. There is a great book called
Think and Grow Rich.
The
title is not
Work Hard and Grow Rich.
Learn to have money work hard for you, and your life
will be easier and happier. Today, don’t play it safe. Play it smart.
Dostları ilə paylaş: |