Investing Outside of Wall Street – “Do you work for your money?  Or does your money work for you?”

In his weekly Rich Dad Radio Shows, Robert Kiyosaki often asks the above two questions. Most of the time, I am absolutely convinced that I’m on the right path to focusing on the right things.  Ever since I began the quest to get my money – what’s left of it – to work for me, once in a while, I still catch myself being trapped in the purgatory of the two opposing worlds.

A child learns how to survive in the environment into which he/she was born based on what parents and/or other significant adults teach them.  Growing up in Japan, the following two culturally-driven aspects are what I remember distinctly:

  1. A young lady who is being brought up in a “proper” family environment should never concern herself with money.
    • What is most important is to find an eligible young man whose responsibility it is to protect her in all aspects of her life.
    • Yes, this was exactly how I was brought up during the 1950s and 1960s. You could call it brainwashing but I’m sure my parents had the best of intentions for me.
    • The only problem was that the reality of my family life did not present my father as my mother’s protector. Instead, I learned, without a shadow of a doubt, that the one who earns money can abuse those who are dependent on the wage earner.
    • If you did not know why I have been fiercely independent my entire adult life, now you do. Ironically, the reality of that household of my childhood prepared me to deal with today’s economic environment head on.
  2. Being accepted into one of the top colleges was of supreme importance.
    • As a young girl, however, I was encouraged to go to one of the best junior colleges rather than a four-year university so that I don’t unnecessarily narrow the pool of eligible young men as potential suitors. Both my parents emphasized how important it was for me to not intimidate men.  Limiting my education to a junior-college level was a means to ensure that the right suitor would feel intellectually superior to me.
    • Yes, that was exactly how they put it.
    • Both my brother and I were expected to study very hard every single day of our youths to get good grades so that we’d be accepted into the best and most appropriate college / university in the country.

Imagine spending the first 18 years of life living under this pressure cooker of parental and social expectations – in an Asian country, no less.

Let’s fast forward several decades into the future called, “today.”  Imagine, further, the realization that what was sorely missing from the school curriculum happened to be one of the most crucial aspects of surviving in today’s economy; i.e., education about money and investment.

I did not learn until I was in my 50s that an individual has a choice to make in terms of one’s financial path.  Let me re-iterate.  You can choose to prepare yourself to either:

  1. Work for your money (by gaining a set of skills to work for someone else). OR
  2. Get your money to work for you (by gaining a different set of skills, working to set up and manage your own investments).

You may want to go back and re-read the two choices, immediately above, to fully comprehend the differences.  The philosophical differences between the two and the skill set needed for each is diametrically opposed from each other.

Keep in mind that choosing to get your money to work for you can require a lot more upfront work (at least a decade for most people) than working for someone else (which you could do even before graduating from high school).

When you work for money, there is usually a time limit, such as 9 a.m. to 5 p.m. on weekdays only; and weekends are 100% your time to spend as you please.  When you are working to set up your money (investments) to work for you, on the other hand, it can easily be a 24/7 routine, excluding the time required to get your sleep. Needless to say, the path to getting your money to work for you is NOT for everyone.

Not making a conscious choice early in life will land you in a situation where you may have to either (1) continuously work for someone else, or (2) constantly look for work, and/or (3) deal with not having money at all.

Here is a case in point, using my own example.  The market crash of 2000 forced me to THINK for myself about my own financial future in earnest.  Up to that point, all I knew was to work for someone else and save a lot of what I had earned for a rainy day – which I kept doing even beyond 2000.  This financial philosophy – which I learned from my parents and, therefore, had been ingrained in every fiber of my being – seemed to make perfect sense to me.  And it did work just fine for a long time.  I never had a reason to question what I was doing – until reality hit me.

By the way, one of the most interesting light-bulb moments I had by reading Robert Kiyosaki’s books was this: Just as in the U.S., a fundamental “investment education” was never part of the curriculum in Japan, either.

Most of us baby boomers were impacted significantly and negatively in one form or another by what had happened to our retirement accounts in 2000 and 2008.  Both of these financial disasters emanated from the ideas of some bad apples on Wall Street.  According to some key industry observers, the 2008 crash can be traced directly back to when, in 1999, President Bill Clinton repealed the Glass-Steagall Act of 1933.  To make matters worse, most financial types – who were cogs in the Wall Street wheel – did not stop to question the “wrong” that was being perpetrated by their colleagues because they, too, were too busy making huge sums of money from these deals, literally stealing from the savings that belonged to the masses who had saved their hard-earned money all of their lives.

For most of us baby boomers who are trying to adapt to the new reality, the situation is doubly challenging.  Why?  Because we must first UNLEARN most of what we had learned in terms of how money and economy work.  In comparison, when you have no preconceived notion, learning the ropes is much easier.  If you’re young and pondering what to do to prepare for your financial future, “choosing the path that is right for you” early in the game is of vital importance. The sooner, the better.  And one more thing: If you are reading this blog post, the chances are that you are highly likely to succeed in getting your money to work for you rather than you having to work for money.

 

Happy investing!

 

 

 

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