The Day We Became Real Estate Investors

Real Estate Investors 3 Year Newsletter AnniversaryIn a way, it was like learning that the tooth fairy didn’t exist. Even with the wild imagination that I had as a child, I don’t remember ever REALLY believing that the tooth fairy really wanted to give me money for the teeth I’d lost. But, I wasn’t about to argue with something that put coins under my pillow while I slept!

As I sat in this seminar though, and listened as my whole vision of reality was splintered, I felt a bit like I did when I learned that there definitely was not a tooth fairy. I had always suspected something wasn’t quite right with the story; It didn’t change how I felt about the tooth fairy, but it was still a bit surprising to learn the truth.

I am talking about the story behind the book that got us started …Rich Dad Poor Dad by Robert Kiyosaki. You see, I read so many of the Rich Dad books that I actually started to feel like I personally knew the characters in the story. Even though the whole story behind the book always seemed a little off, I never really questioned it.

Then, I met “Rich Dad”. He’s far too young to be the age of Robert Kiyosaki’s rich father portrayed in the book. Yet, he is every bit the exceptional business man, gifted educator and brilliant communicator I had expected. I’m talking about Keith Cunningham, who worked with Robert Kiyosaki for nearly a decade. His teachings are what Robert based his books upon. Keith is the author of a book called Keys to the Vault, and with his wife Sandi runs some extraordinary business coaching programs in Austin, London, Sydney and a few other places around the world.

Sitting in Keith’s course, learning that “Rich Dad” was not really who the book made him out to be shook me up a bit, but I was not totally shocked. Like I said, it’s like the tooth fairy. It really didn’t matter if the tooth fairy was real as long as she kept putting money under my pillow! It really doesn’t matter that “Rich Dad” isn’t who Robert Kiyosaki says he was, because that book still change my life (and Dave’s).

We wrote about Rich Dad Poor Dad before. Today, I want to share 7 revelations from that book that turned Dave and I into real estate investors and changed the way we looked at money (and I am going to add a few newer thoughts from Keith’s teachings):

  1. Rich people acquire assets. The poor and middle class acquire liabilities, but they think they are assets.” p.58
  2. As an employee who is also a homeowner, you will find yourself going to work every day to pay for your house, to pay your taxes and to pay the bank. The more you make, the more you pay. The more you pay the harder you feel like you have to work so you can keep up with the payments. You have to learn a way to make your hard work pay YOU more. You need to learn how to get your money working for you instead of you working for the money.
  3. Use assets to buy luxuries. “Too often today, we focus to borrowing money to get the things we want instead of focusing on creating money. One is easier in the short term, but harder in the long term. It’s a bad habit that we as individuals and a nation have gotten into. Remember, the easy road often becomes hard, and the hard road often becomes easy.”p.182
  4. Take action … immediately. It’s not about waiting for the perfect market, the perfect moment or for something else to happen. Take steps today to learn what you need to learn and do what you need to do. Keith said to us “When we can’t find the perfect solution we stop moving … instead of looking for the perfect solution figure out what you can do TODAY to improve your situation.”
  5. Most people actually make choices that result in the easy path – which is not the path to wealth. Most people are actually choosing NOT to be rich. “Financially, with every dollar we get in our hands, we hold the power to choose our future to be rich, poor or middle class. Our spending habits reflect who we are. Poor people simply have poor spending habits.”  p.167
  6. Smart investors aren’t trying to time the markets and they are not listening to the ‘chicken littles’ of the world that will always tell you why something can’t be done. “Why this is hard for most investors is because buying what is not popular is frightening to them. Timid investors are like sheep going along with the crowd. Or their greed gets them in when wise investors have already taken their profits and moved on.”p.171
  7. You have to start where you are today. Keith suggests that most people want to start at the front of the line, not at the back of the line. You can only start where you are today. So instead of focusing on all the reasons you don’t have time to wait to get to the front of the line or on any of the excuses why you won’t ever get to the front of the line, ask yourself “What are 5 things I can do to improve the situation?” Your problem may not be solved right away but if you do those five things you will move closer to the front of the line.

The book didn’t teach us how to invest in real estate, but it gave us the perfect mindset to start. We knew we wanted our money working for us, and we knew we wanted to buy assets not liabilities. And, we started immediately by getting control of our expenses while we read a couple of books on real estate investing. That is how we began. Of course, after buying a few properties we went off track a bit. Thankfully we did because those mistakes taught us our biggest lessons and gave us great stories to share with our readers. But our first investment which was inspired by this book was one of our best. When we began our real estate investing, we did so with a great mindset for wealth creation!We hope you will too!

Published on April 3rd, 2009

Kiyosaki, Robert.Rich Dad Poor Dad. Warner Books, 1998.

The Book That Got Us Started

rich dad poor dad

Rich Dad Poor Dad


You might roll your eyes when I tell you that the book that motivated us to set some goals, and actually start real estate investing five years ago was Rich Dad Poor Dad by Robert T. Kiyosaki. I admit that it’s a bit ridiculous how many different versions of the same concept have sold since then. I think they’ve diluted the power of their concept by over-selling it. Six years ago though, the messages in the original book really hit home for us.

Specifically, the two concepts that I carry with me today are:

  • The Rich don’t work for their money, their money works for them, and
  • Why your house is NOT an asset.

The Rich have their Money Work for Them

My parents have worked incredibly hard all their lives. Most recently they’ve been successful B&B owner/operators on Salt Spring Island, BC. They have set themselves up very well for retirement, have some money to spend now and have enjoyed being self-employed for over 30 years. What they haven’t had is freedom. Tied to their businesses 24 hours a day 7 days a week, until recently they had only taken a handful of vacations in their lives.

After reading Rich Dad Poor Dad my dad said to me, “We have been buying ourselves jobs instead of buying businesses”. At the time, I had been working for less than two years, and already realized it was going to be a long life of “punching my time card”, if I didn’t make a plan to get my money working for me. That is when Dave and I set out to figure out some ways to create income streams that didn’t require our attention every day. Neither of us was prepared to start a business, so we decided to build wealth while working for “the man” as Dave calls being employed. The objective, is and always was, to become financially free. We are working to be at a point where our assets make us enough money that we only work because we want to.

Your house is NOT an asset

This concept has been the subject of many debates in the media and amongst our friends and family, but it really made sense to both of us. The essential concept is that assets generate income, liabilities generate expenses. “The rich buy assets. The poor only have expenses. The middle class buys liabilities they think are assets. (p.81)”

The enlightening concept here is that as a homeowner that works, you are making everyone else rich (the owner of the company you work for, the government, and the banks that loan you money to buy your “assets”). If instead of becoming a homeowner, you bought an income producing asset (stocks, bonds, real estate, intellectual property), you would increase your income, decrease the amount you pay the governement (in some cases), and your financial “cycle” would be generating cash instead of generating expenses.

Most of us get a raise, then think about buying a bigger house. A raise means more money for the government. A bigger house means a bigger mortgage, which means bigger payments to the bank (liabilities). A home, we’ve noticed, also means many trips to Home Depot, Home Outfitters, Sears and other stores to make your home nice. If you have recently changed from renting to owning you will likely have noticed how many things you suddenly “need” to do to your house or buy for your house. It’s a never ending cycle of expenses.

So, does this mean you shouldn’t own a home? No. What it’s about is awareness – don’t fool yourself into thinking that your home is an asset just because the rules of accounting say it is. Your home does not create income for you and your family, it creates expenses.

For us, Rich Dad Poor Dad got us into real estate early in order to begin getting our money working for us. We bought an investment property before we bought a home. But, the second place we bought was a small condo for us. We would rather pay down our own mortgage than someone elses. We have since lived in three places we have bought, and they have always been homes below our means. We put the rest of our money to work for us. We do this knowing that our home is a liability, but one that we have chosen both for lifestyle and financial reasons.

Published March 22, 2007

**April 3rd, 2009 Update: Check out the article celebrating Rev N You’s 3 Year Anniversary by Julie Broad called: The Day We Became Real Estate Investors. It’s a tribute to the lessons this book taught us**


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