How I became financially independent in 5 yrs

[stoutboy]

I think Kiyosaki is a fraud. Here's a pretty devastating review of him.

 

[Tigger]

I think Kiyosaki is a fraud. Here's a pretty devastating review of him.

I actually enjoyed Rich dad, poor dad though nowadays I'd rather recommend other books. I didn't know anything about personal finance and the message that I should spend on income-generating assets instead of status symbols like a big house made something click and helped me change the way I thought about money.

Sure, not all his advice is good. But I've never understood the people who are angry because "rich dad" may never have existed. After all it's a book about personal finance, the story is just there to help explain things. Next thing they'll get all worked up because the Richest man in Babylon wasn't really the richest man in Babylon.

I always wondered why Reed wanted to dedicate his life to destroying Kiyosaki. But now I've noticed his anger isn't limited to Kiyosaki. Apparently he's on a mission to rid the earth of crappy real estate advice.

 

[stoutboy]

I've always enjoyed the Reed site. I'm kind of fascinated by the infomercial, get-rich-quick aspect of our society, and I find his analysis of the various gurus quite informative, if a little self-serving. I do agree with him though that Kiyosaki is more con-man than guru. There's no record of Kiyosaki's real estate transactions (at least to the extent he claims). He's just a snake oil salesman. I don't really get your point on the status symbols, however. Kiyosaki positively oozes conspicuous consumption. It's how he appears to measure himself.

I actually enjoyed Rich dad, poor dad though nowadays I'd rather recommend other books. I didn't know anything about personal finance and the message that I should spend on income-generating assets instead of status symbols like a big house made something click and helped me change the way I thought about money.

Sure, not all his advice is good. But I've never understood the people who are angry because "rich dad" may never have existed. After all it's a book about personal finance, the story is just there to help explain things. Next thing they'll get all worked up because the Richest man in Babylon wasn't really the richest man in Babylon.

I always wondered why Reed wanted to dedicate his life to destroying Kiyosaki. But now I've noticed his anger isn't limited to Kiyosaki. Apparently he's on a mission to rid the earth of crappy real estate advice.

 

[Anima Mundi]

I think Kiyosaki is a fraud. Here's a pretty devastating review of him.

I agree. I don't like him or his books. If he's so successful, why is he still working? And if his books really worked, why aren't more people working less and have more money?

Man, guess I should get into the snake oil business - it really seems to pay the bills.

 

[Bimmerbill]

I used to joke about selling all my stuff and house and living in an RV or single wide for a few years. Imagine all the $ I could bank. Heck, maybe I'll try it. I'm sure my DD who is 4 wouldn't mind.

 

[W2R]

Since we are both sick and not inclined to go very far from the house, Frank and I spent hours together yesterday perusing the various pages on Jacob's blog from dual computers beside one another, and reading interesting passages aloud to one another. Neither of us would do exactly the same as Jacob, but it was great food for thought and gave us some interesting ideas.

Thanks so much for the link!

 

[brewer12345]

I used to joke about selling all my stuff and house and living in an RV or single wide for a few years. Imagine all the $ I could bank. Heck, maybe I'll try it. I'm sure my DD who is 4 wouldn't mind.

My two under 6 kids would probably be thrilled with a fulltime RV lifestyle. Homeschooling would be a drag, though.

 

[Brat]

I'll give you frugal: a relative of mine is on SS. His former wife, a professional with substantial income, ran a tab on the family which she hid for years - essentially exhausting the household assets. After the divorce their teen son stayed with him and they lived in income restricted apartment in a nice neighborhood while he straightened out his finances. Son went off to college on a scholarship (maintaining it with a near 4. GPA) and he started searching for a studio condo. He found one, with parking, in a very nice building which he could buy for cash... for ~$145,000, including updating and decorating. He spends, max, $6,000 a year for living expenses.. heat, water, garbage, property taxes, facility maintenance, laundry, high speed inter-net, Comcast. A Veteran, he uses VA health care. He purchased a quality, efficient, used car. He probably could have found a "cheaper" studio but the location is great, it is in a walk-able neighborhood, and the HOA managed for the long term.

He actually has a very high standard of living. Moving to a studio means that he doesn't bring anything home that isn't necessary and doesn't accumulate 'stuff'.

 

[pawsplus]

Fascinating! I can't live like that, mostly b/c of my critters, but some of the ideas are doable for me, and it's helpful seeing an extreme example of what I'm trying to do in a, well, less extreme way.

 

[haha]

I'll give you frugal: a relative of mine is on SS. His former wife, a professional with substantial income, ran a tab on the family which she hid for years - essentially exhausting the household assets. After the divorce their teen son stayed with him and they lived in income restricted apartment in a nice neighborhood while he straightened out his finances. Son went off to college on a scholarship (maintaining it with a near 4. GPA) and he started searching for a studio condo. He found one, with parking, in a very nice building which he could buy for cash... for ~$145,000, including updating and decorating. He spends, max, $6,000 a year for living expenses.. heat, water, garbage, property taxes, facility maintenance, laundry, high speed inter-net, Comcast. A Veteran, he uses VA health care. He purchased a quality, efficient, used car. He probably could have found a "cheaper" studio but the location is great, it is in a walk-able neighborhood, and the HOA managed for the long term.

He actually has a very high standard of living. Moving to a studio means that he doesn't bring anything home that isn't necessary and doesn't accumulate 'stuff'.

Brat, is this in Seattle? Tell me where, or PM me if you could.

One of the harderst parts of condo/coop hunting is finding well managed, well maintained buildings.

Ha

 

[Brat]

I will PM you...

 

[plex]

I'll give you frugal: a relative of mine is on SS. His former wife, a professional with substantial income, ran a tab on the family which she hid for years - essentially exhausting the household assets. After the divorce their teen son stayed with him and they lived in income restricted apartment in a nice neighborhood while he straightened out his finances. Son went off to college on a scholarship (maintaining it with a near 4. GPA) and he started searching for a studio condo. He found one, with parking, in a very nice building which he could buy for cash... for ~$145,000, including updating and decorating. He spends, max, $6,000 a year for living expenses.. heat, water, garbage, property taxes, facility maintenance, laundry, high speed inter-net, Comcast. A Veteran, he uses VA health care. He purchased a quality, efficient, used car. He probably could have found a "cheaper" studio but the location is great, it is in a walk-able neighborhood, and the HOA managed for the long term.

He actually has a very high standard of living. Moving to a studio means that he doesn't bring anything home that isn't necessary and doesn't accumulate 'stuff'.

This is exactly what I want to do in 7 years. I am almost certain his budget is strikingly identical to mine. Seattle was quite nice when I visited while staying at a friend's relative's studio in the city. There should be heavily subsidized exchange insurance by then as well (since I will require a very low amount of income), so it will be similar to veteran's benefits. In particular, I will want a very good internet connection, so it will have to be near a city area. It would only take $310,000 to purchase a $145,000 property, and then have enough for a budget of $6k/year. No roommates would be needed either to achieve that budget.

Personally, I plan to have a lot more than $310,000 (+inflation) saved up so I can have a large entertainment/food budget, but it is good to know at what number my basic costs would be taken care of should I need to take a break.

Edit: Out of curiosity, I ran the numbers to see how long this would take, and it is 3 years of full time work, with no debt, at $135k/year, and assuming the last year of work is 2013. Not bad.

 

[ATC KH]

There is no way that I could live on 6k/year even with a paid of condo. Just property taxes plus association assesments cost me $5772 per annum alone.

 

[retire@40]

There is no way that I could live on 6k/year even with a paid of condo. Just property taxes plus association assesments cost me $5772 per annum alone.

You could if you moved to a cheaper place to live. There is always a way.

 

[ATC KH]

You could if you moved to a cheaper place to live. There is always a way.

True, I suppose there is always a way. Still, even in cheap cost of living areas, property taxes and monthly condo assessments are almost certain to carve out a big chunk of a 6k budget. And then there's always the dreaded special assessment.

 

[Brat]

It takes a lot of work to find the right place to buy, you just don't call a realtor and have them find the perfect place. In my relative's situation he knew the community very well. He watched where the 'smart money' folks moved when they retired. He and his wife had to sell their home when they divorced, he put his share of that in CDs because he wanted to pay cash for his next home. Then he used the internet to find studios with parking and a deck/terrace. He visited them as they came on the market and in that process crossed buildings off the list. He really researched the buildings and when the right one surfaced he was prepared to make an offer.

The 'cure' for special assessments are sufficient HOAs on an ongoing basis and a through inspection of the building before you buy. Take along a retired, irascible, architect to discuss what issues might develop in the next 10-15 years. Buy in a building where the other owners have sufficient income to vote FOR HOA reserves that are necessary to preserve the building, not in a building where the other owners are just scraping by. Go on the city/county building department's website to see what permits have been issued in the building, google the building name + engineer. See if owners are investing in their home.

It's work but the payoff in lifestyle can be huge.

 

[REWahoo]

Take along a retired, irascible, architect...

That's a bit redundant isn't it?

 

[haha]

There is no way that I could live on 6k/year even with a paid of condo. Just property taxes plus association assesments cost me $5772 per annum alone.

That may be what she means-$6000 in housing associated costs.

Ha

 

[Brat]

Yes, I meant $6,000 in housing associated costs.

 

[ATC KH]

Yes, I meant $6,000 in housing associated costs.

That seems more reasonable. You had me thrown when you referred to $6000 as yearly living expenses. I define living expenses as not just housing associated costs but any cost incurred to maintain a desired standard of life.

 

[FUEGO]

Hmmm... $6000/yr in housing costs? I could probably do it in my current single family house. Although deferred maintenance would eventually catch up.

1417 - taxes
400 - insurance
1800 - nat gas and elec
600 - water, sewer, trash, recycling, stormwater
420 - internet

$4637 total per year. That leaves $1363 per year for repairs, maintenance, capital expenses, etc. Probably doable as long as I can keep handy and do some work myself. This assumes a paid off house obviously (1800 sf on 1/3 acre in the city).

 

[Bimmerbill]

Dang! I'm more like:
$5500 taxes
$800 insurance
$2000 heating oil
$1200 electric
$500 propane
$1000 internet.

I gotta move out of the Northeast!

 

[Brat]

It is my observation that housing costs are related to the size of your home, its energy efficiency, and local weather. The level of property taxes, sales taxes, state income taxes are largely a community culture issue - for a given level of services money must be collected. There are indirect housing costs.. it is cheaper to live in the countryside but transportation costs to necessary services (grocery store, health care) are higher.

IMHO, select the environment in which you want to live then find the best value in small (very small) home. If you find an empty lot (or tear-down) in a great neighborhood place a tiny home on it and have a large garden. Take care that the home is suitable for you late in life (I found such a house at the last Seattle Home Show).

 

[FreeAt30]

Neither of us would do exactly the same as Jacob, but it was great food for thought and gave us some interesting ideas.

I started reading his blog a while back. I agree with W2R. Just because DW and I have no need to employ the things he talks about, it doesn’t mean that there aren’t a lot of great ideas in there.

My two under 6 kids would probably be thrilled with a fulltime RV lifestyle. Homeschooling would be a drag, though.

Most kids are thrilled with that kind of lifestyle in the country. It’s so much fun. My DW and BIL both grew up in that kind of lifestyle and they talk about their fond memories all the time. They are both capable adults now. I would say that they are even better adjusted than me (city kid with greater financial enablement (it really wasn’t enabling at all)).

It’s a side rant, but it really makes me sad to see so many kids these days with so much material nonsense and so few having fun.

 

[Kcinnick]

I thought my goal of 2500 a month on a combined salary of 85k-110k was aggressive. I guess I need to look at my expenses again.... I could never do 70 percent, but maybe 50, it would be easier in a 110k year!