After the market crash of 2000, like millions of others, I picked up “Rich Dad Poor Dad” shortly after I saw Robert Kiyosaki on the Oprah Winfrey Show. Kiyosaki compares the difference between those who work for money (employees) and those whose money works for them (investors).
Upon reading it, I thought, “Well, the answer is obvious. I must become an investor!” Little did I know that I was about to get on a roller-coaster ride of a lifetime.
Although I grew up in Japan, the message given to me by my parents was the same as what Kiyosaki had pointed out. That is, most of us grew up being told to go to school, get good grades, get a good job, and save for retirement. Yup, that sure was my life plan as well. And I relayed the same message to our kids, too.
As it turned out, without any awareness of it, I was being trained to be an employee all my life; in other words, to “work for money.” With this background, switching from an employee to becoming my own boss turned out to be far more challenging than I could have ever imagined.
Having arrived in the U.S.A. as an adult, and later armed with an MBA, I was blessed with a fascinating career in corporate America, which paid me very well and, therefore, I never considered it a rat race. Twenty years thereafter, by contrast, by choosing to learn to become an investor with no prior knowledge, I found myself in a rat race, created by none other than yours truly.
You may be wondering, “Is she regretting her decision to become an investor?” The answer is an emphatic, “No.” I was determined never to be caught off guard as I was in 2000 in terms of financial security in retirement. I knew, therefore, that I had to understand how to become an investor – no matter what.
Let me back up further for a moment and summarize the depth at which I was engrained in the “old school” frame of reference.
In 1999, right before our 50th birthdays, David and I had paid off the 15-year mortgage on our residence. With this milestone having been achieved, we were proud of how we became debt-free, while we both still had at least a decade to go before retirement. Armed with plenty of retirement savings, I had no doubt that I did everything by the book and was being rewarded for my hard work in corporate America.
Shortly thereafter, the tech bubble burst. Many people joked that their 401(k) savings for retirement became 201(k). Well, because mine was in a tech-heavy, aggressive portfolio, it became more like 101(k). As I have written about it in my earlier blog, no other event had ever shaken me to the core of my being as this market crash. I was ready to soak up anything and everything I could get my hands on to start learning to be an investor.
At the end of October 2004, I finally gathered enough courage to leave my 20-year career in corporate America to focus on investing. I was 55 years old. Leaving the workforce earlier than the usual retirement age meant opting for much smaller monthly income from both pension and Social Security. The whole point of leaving earlier, however, was to prepare myself to not have to rely on those entitlement programs, although it is true that I had paid into them through paycheck deductions every single month as an employee.
Smack in the middle of my investing journey – with so much to learn – our house burned down due to a lightning strike in 2008. The timing could not have been worse. This was the same year when both the capital and real-estate markets tanked. No bank was lending any money to anyone in the entire capital market. This meant we had to pay cash for the portion of the build-up cost that was not covered by insurance. Consequently, the house fire ended up putting us back financially. Significantly.
Having purchased 26 investment properties by then, not only was there no money left to buy additional investment properties, we ended up having to use credit cards to keep the two main business entities afloat. With high balances on each, our credit scores tanked from above 800 down into the 600s. For someone like David and me, who had never had a credit card balance, this was one of the toughest pills to swallow.
In retrospect, however, the house fire may have been a blessing in disguise in that, had we not been forced to put our retirement funds into our home, we are likely to have kept on throwing good money after bad for the 22 units that went sour in Mississippi.
Fast forward to today, thanks to the sale of our beautiful primary residence at the end of March 2021, we were able to downsize and move on to the next phase of our lives without any financial concerns. I am basking in the joy of knowing that the rat race of my own creation has finally come to an end. We are debt-free once again, except for the good debts in the form of mortgage loans that help generate positive cash flow with the original four local properties that survived the ordeal of my investment journey.
And the best part? Finally, I am able to focus on writing a book that helps newbie investors succeed when they follow one simple concept that helps build a rock-solid foundation of wealth. In fact, I will be following my own advice to resume accumulating additional investment properties.
Happy investing!
