Several years ago, my husband and I started a real estate investment company. This sounds like a big deal; for us it was monumentous. (For a link to the sweetened condensed version, click here.)  The Big Story involves desperation, drowning in debt and crying on the floor. 

My husband’s income was topped out at a well-paying job, mile high taxes with few available deductions, rising expenses, growing kids with even more growing expenses. We lived modestly, ate beans and shopped at Goodwill.

As expenses increased, we could  no longer pay the monthly bills. Groceries  and gas went on the credit card, balances on the credit cards inched higher. Interest compounded, cars that we’d driven 15+ years gave out and had to be replaced leading to car notes we’d avoided for a decade and couldn’t squeeze into the budget any which way.

 We were the middle class and we were getting slaughtered–

Right in the middle of desperation, I happened upon a book by Robert Kiyosaki, Rich Kid, Smart Kid. It took 30 minutes of internal debate in the Sam’s Club aisle to justify spending the 10 bucks. Once home, with kids and husband tucked away for the evening, I sat in the living room of our doublewide and devoured the contents. The next morning, I was as excited as a h**ker who’s got religion. I convinced hubby-dear that buying every one of Mr. Kiyosaki’s books was an excellent investment in our future, which took some fancy talking, considering our lack of available funds.

We bought all his books, both his games, and signed up on his forum. (I’m pretty sure he has an apartment complex somewhere with our name on the dedication placard.) We learned about things like cashflow, assets and liabilities, earned income vs. passive income– but most important, we learned we were ignorant. And there was hope–You can’t change if you think you have no options. I became his follower, his disciple, his slave (okay, maybe not *actually*…)

Then, I outgrew him… <sniff>

Motivation vs. Inspiration vs. Perspiration

We never wanted to get rich. We didn’t want to drive expensive cars or wear fine watches or vacation on our own private island. Actually, we were very content with our lifestyle. Neither of us ever cared much about stuff.  We spent our vacations sitting on the deck because that’s what we like doing in our spare time. Honest to goodness, only one thing motivated these two homebodies to change.

We didn’t want to be afraid anymore.

• Afraid to open the bills
• Afraid to balance the checkbook
• Afraid of retirement
• Afraid of layoffs
• Afraid of medical bills
• Afraid of being financially dependent on our kids in our final years
• Afraid the kids would wind up just like us

We’d spent 20 years together living paycheck to paycheck, trying to get by with one salary in a two-salary economy, trying to make decisions based on quality of life for family and friends. We accepted the stress, the worry, the fear because we didn’t know what we didn’t know…that money isn’t about addition and subtraction, its all about multiplication and division.

The only world we knew followed this script:

• go to school
• get a job
• deposit your paycheck
• pay the bills
• save for a rainy day and
• pray social security doesn’t fail 

We added our deposits, subtracted the bills, saved for retirement and watched taxes and inflation gobble the 3% interest we managed to accumulate. We’d never heard of a world where ordinary people invested their money so it would multiply, giving a margin of comfort, a cushion against layoffs, a buffer against inflation.

Amazing.

We spent three years planning a strategy before buying our first investment house. I learned to operate a financial calculator, figure expenses, incorporate a business, and run a pretty dadgum good background check. I played hypothetical buyer, studying the houses for sale on MLS every day until I could spot a good deal, ran the numbers on big yellow legal pads using different interest rates and length of term until I knew the price we’d need to pay to make a profit, wrote up imaginary offers with wildly creative financing and loan terms (why not? Its only pretend at this point, right?) and drove the city until I knew it almost as well as the real estate agents (or at least well enough to carry on an intelligent conversation.) I developed relationships with a great agent, our local bank, an accountant, a mortgage broker and a lawyer.

Three years after buying our first investment property, we’re doing fine, thanks. We’re not rich, we aren’t building an empire, but we’re not afraid anymore either and, if we don’t sleep at night, its generally the bursitis, not the bank account.

And the principle of multiplying returns is such an amazing thing that, who knows? Maybe we will be rich some day.

And I’m not afraid of that anymore either

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