The one remarkable insight that gave me sleepless nights but helped me retire early.
Today I’m going to tell you a story. The story of my life, the story of something that changed my life forever.
Once upon a time I was 25 years old. I used to sell trucks for one of India’s leading truck manufactures.
I’ll give you a quick background on me and my husband we were in college together and student’s loans of course and the moment we passed out of college within 3 months we married.
Within one year of marrying we bought our first house and another 6 months later we bought a car. We were trying to catch up with lifestyle and expenses we were struggling to make ends meet.
Salary would come in on the first and by the 10th it would all be gone. We got into habit of the “CC” the credit card.
I knew if we had a medical emergency we didn’t have enough reserves and we will have to be taking a personal loans to handle that expenses. That was the kind of situation and this was driving me really mad.
When I was looking for revenues to earn extra money like you know stock trading every day and some multi-level marketing and I mean I was just getting crazy about the situation of not having enough money at the end of the month.
One particular day, the maid was working in the house and she was washing vessels and she had left the tap open, water was just flowing and she was slowly soaping the vessels and I shouted at her saying if you waste water money gets wasted in that house, and that’s why I’m not able to save any money.
I said first she was the reason for all our financial difficulties and I have to read a book called “Rich Dad, Poor Dad”.
That particular book I mean it impacted me so much that I couldn’t sleep for 3-4 days after I read that book there was a particular concept in that book that was very interesting it was like a slap on my face it was called cash flow quadrant.
I don’t know if you have seen it but it works something like this it explains how the rich handles their money and how the middle class handle their money.
So typically a middle class person earns money from job as salary, his income comes in as salary and the money first goes to pay off all the liabilities which is usually a student loan, a car loan or a home loan or a personal loan or whatever. Then whatever was left is used to handle some expenses and that’s the money just goes out.
Differently, a rich person handles money this way he first uses his money to buy assets so he buys a house, he buys some bonds and stocks and he writes a book and he has got some intellectual property and all of this gives him income in the form of a rent or royalty or interests or dividends and he uses that money to pay off his usually no loans but expenses and the assets keep building more and more assets keep building and he builds a circle where it is self-fulfilling, and that’s why rich get richer.
This was an amazing eye opener for me.
I decided that day that I was going to take control my financial situation and I changed jobs I re-did my loans and I went out finding investment options and caught some basic habits together cut 13th 14th years now.
I am 39 and I’m semi-retired I do this work for fun of meeting new people and having fun conversations. I my husband plans to retire in the next 3-4 years too so that he can pursue his sporting ambitions. Be around our son who would be a teen then.
My son goes to an international school pursues a very expensive sport. We travel well twice a year. We recently bought a house in Bombay and we were fortunate to borrow not more than 40% of the project cost and God willing all things go well we should be out of that loan in the next 30 months.
Through the process of buying this house we have not had to liquidate any of our investments and nor did we stop our regular investments we continue to save about 40% of our income to build our assets and as a last saw our portfolio has given us a healthy 13%-14% return.
If two totally clueless, indiscipline lazy people can manage to do this then I can’t believe why anybody else can’t.
All that you need is of course the blessings of God and your elders and the resolve to take control of your financial life and if possible somebody who knows financial matters and somebody who cares for you to hand hold you through this process.
If you want to more about the specific actions I took and the specific places where I invested money and more such stuff reach out to me.