We’ve all heard the lines. “If it seems to good to be true it is.” “Invest for the Long Term.” There are many more. However, in most cases, the years roll by and we look back and realize we’ve managed to accumulate little and become a slave to debt. How do we break the spiral and win the security and prosperity we seek?
Bob Kiyosaki’s “Rich Dad, Poor Dad” may do the best job to date explaining the process. However, even his volume leaves something to be desired as a road map. So where do we start?
To begin with, ever trip begins with a single step. This journey is no different. You have to determine to take action however small.
Be consistent, not only must you take the first step, but you must stay focused and engaged in reaching your goal. Take some step every day if possible. If you can’t do something every day, then take some step once per month.
Begin operating on a cash basis. Reduce your expenses, down size your life, and accept less to establish positive cash flow. Complete a shortsale of your home. Negotiate down your credit card principal balances or payment terms in exchange for making the accounts inactive. If your situation is bad enough, you may even consider bankruptcy. In general, work with your credit and creditors to stop debt growth.
Become and educated investor. Join an investment club or association (The International Residential Real Estate Investors Association is a good one for this purpose). Get to know other successful investors. Don’t work with money managers who are salesmen. Work with money managers who have become rich investing their money.
Begin buying cash flowing assets. In my case, this is residential real estate. I understand how it works and I understand how to protect my investment. The returns should be conservatively defined and the risk should be limited. Consider this, if you invest $100 and the $100 returns $5 or 5% in cash annually which you carefully reinvest your value will rise much more rapidly than you might imagine. Chances are you can do much better than 5%.
Establish your corporate alter ego either as an S Corporation, an LLC, or some other vehicle other than a sole proprietorship or partnership. Give yourself the tax advantages that the wealthy enjoy as you begin creating substantive asset value for yourself.
Almost anyone can with good planning build tremendous wealth and security for themselves. Regardless of age, losses, or debt, we all have the potential to achieve wealth – one step at a time.
Blake Ratcliff –
About the Author:
Blake Ratcliff is a long time entrepreneur, residential, and multifamily rental investor. A former Marine officer, U.S. Naval Academy graduate and past class president, Blake has been a part of the management team or investor group for 8 different startups. Currently, he owns and operate a several hundred unit portfolio in the southeastern United States.
Blake is a founder of the International Residential Real Estate Investors Association. He founded this association to provide reliable, high quality information, education, tools, services, suppliers and consultants for investors or would be investors.
You can signup for the association or enjoy general information at www.irreia.org/signup