Plan for getting "rich" in 10 years?

[always_learning]

In Robert Kiyosaki's "Guide to Investing" he requests readers write a plan to be each of the following:


To be poor (to me means the "default" be a worker and consumer plan, followed by the pension)
To be secure (to me means the good job, reasonable super and some the low-risk consumer investments plans a financial advisor may offer, ie a self funded minimal pension with a bonus of a bottle of red each week)
To be comfortable (which I call financial independence, enjoying the good stuff within reason)
To be rich (to have more than enough, a life of abundance for yourself and for your children and grandchildren)


Since I am actively investing in property (a managed development and holding my other 2 investment properties), I have come to the conclusion that IP is fundamentally boring, which is neither good nor bad, and after some consideration on the subject, the degree of excitement in IP would probably correspond to a degree of doing the wrong things. This forum shall I say keeps the flame alive and the mind focused from distractions. But I digress.

Always Leaning thinks I have a) and b) in the "bag" and working towards c) which I believe I will achieve using with my current plan of buy, develop or renovate, hold. Being financially independent however will take at least 10 years and more like 15 to execute.

However following the request in the "Guide to Investing" to make a plan to be rich that I want help with, presently I have very few "ideas" and no good ideas how to achieve being "rich". With my current strategy it doesnt expand/scale up to allow me to be "rich" from property investment, given my current income (low 6 figures).

Rich
What is being "rich" for me? I think rich is $5M of wealth/equity and using around $5M of financial leaverage total $10M, with net income of 4% and average of 6% growth, my combined income and asset base and wealth would be growing at $1M year => this is rich (for me). $1M a year of wealth is more than I could spend and would offer a life of abundance for me and my family and also allow for me to expand upon my current charitable contributions.


From 2003

$1M of existing IP's investments
At least $500K in equity in the above IP's
Lowish 6 figure income.


Proposed to 2013

$10M of IP (or other investment class)
At least $5M in equity
High 6 figure income by combination of passive or capital gains


The Challenge
Basically multiply my present position by a factor 10 in ten years ($10M of assets and $5M of equity) Any ideas? Anyone done it or doing it? To be honest it is only to fire up my imagination of what is possible? If you have read "Think and Grow Rich" I am a saying "Dear Master Mind group, give me your ideas!"

Its just a bit of fun nothing serious! Let your imaginations run wild!

I will give a prize to the best idea! I have two copies (I purchased one and then my brother gave me one) of the "Magic of Thinking Big" by David J. Schwatz, I will send my spare copy to the person with the best idea!

[always_learning]

Picture of the book prize. Very good condition!

/forums/photopost/data/506/182motb.jpg

[ EDIT: moved image to photo gallery and replaced with image link - Sim' ]

[WillG]

Hi Always,

Good question - 'How to accelerate your wealth after $1mil net worth'

There is a saying that sums it up 'The first million is the hardest'.

Have you played the Rich Dad 'Cashflow' game ?

It goes something like this ..

1. Pick a profession Card ... tradesman, lawer, doctor ...
2. Each profession has $xx expenses per year that must come from passive income sources. Lawers & Doctors have higher expenses.
3. While you are in the 'rat race' you are buying / seling houses & shares known as 'small deals' that help build your passive income.
4. When you get out of the 'Rat Race' you move into the 'Fast Track section' where bigger deals become available. These may be factories, large commercial properties, companies ....

I believe the fast track is what you are taking about.

I can't give you any ideas about investing in the fast track except that when you enter the fast track you will have the knowledge, skills, equity & associates necessary to find the bigger deals. Based on some of the posts from 'Jak', I would say he is probably in the fast track.

Do I win the book ?

Cheers,
Will

[always_learning]

WillG,

Just to paraphrase what I think you are basically recommending, to take the "to be rich" path I should leaverage my existing capital�@and focus my resources (capital, learning, energy, imagination) towards more commercial style property developments ? Or are you recommend a more expansive "build a big business" type strategy?

Since you are the only responder, so far you are looking good for the book prize award!:)

( I have never played the Cashflow game)

[Peter B]

My suggestion is to be clear about your goal and start/continue to work towards it. It's not so important to know now how you'll get there, the answers will reveal themselves at the right time as long as you remain focused.
Regards, Peter

[always_learning]

Originally posted by Peter B
My suggestion is to be clear about your goal and start/continue to work towards it. It's not so important to know now how you'll get there, the answers will reveal themselves at the right time as long as you remain focused.
Regards, Peter

Just to paraphrase your suggestion is it basically:
Focus on where and what you want to be and by the principle of "When the student is ready the teacher will come" somehow/someday/somewhere the answers and people required for me to achieve my goals will reveal themselves to me. ?

This is very interesting, my present understanding of goal setting basically like this:

Sit down determine where you want to go, the person you need to be. Write it down.
Look for people who have done it. Ask how they did it.
Decide/believe that you can do it too.
Create a written plan to move from where you are today to where you want to be in the future.
Decide in advance to pay the price to achieve the goal
Work the plan everyday, pay the price (success is upstream not downstream) to achieving your goals

[Peter B]

Yes, I agree, it is about all those things too. Maybe I can summarise how I see it in three steps;

1. Vison: This is what you really really want to do or be or have. For example; "a life of abundance for me and my family " This shouldn't change.
2. Goal: This is the tangible objective and attainment of your vision. E.G. "$10M of IP (or other investment class) by 2013" This might change, what if you reach your goal in 2008? You'll have to set a new, higher goal.
3. Method: How are you going to acheive the goal. E.G. "Through property investment." The method needs to be worked on constantly. It's the very next thing that you do today or tomorrow that will take you one step closer to your goal and your vision. Remain flexible to allow for unforseen circumstances. What if the property market crashes, will you still have your vision? Sometimes people get caught up in the "How to" and forget "Why" they're doing it.

When you have decided on your vision and set on a path to acheive not only will the teacher appear as you say but, as many people in this forum have stated, opportunities will also appear.
Having said all that I reiterate that I agree with the points you raised but I would say they're not the goal or the vision, they're the tools you use to acheive them.

All the best.
Peter

[Macca]

Hi A L,

I think you are well on your way, in all forms of investing getting started is the hard bit. Even if you do no more than you are now, your income will be substantially more than the average non investor.

I believe that the current value surge must pause shortly, when this happens rental yields will try to play catch up to the new values. Market should consolidate for about 5-7 years and then start to move again.

We should use this pause to prepare for the next cycle.

I believe that the pause will give us time to be searching out future development sites at a price we can negotiate, not take or leave like now.

By selecting good sites, getting our approvals from councils and being ready to develop when the market starts to move I expect
to do very well in the next cycle. By then your equity will have increased, use this to leverage into larger projects to maintain the compouding effect and I would expect that in 10 to 12 years years things should look very nice:D

[agent007]

Hi all,

Always-learning, I wish I have the answer to your question but, I don't... though, I'm on the same boat... Before discovering this forum I thought I was alone with all these concerns, ideas and issues. It made me feel a little bit different that the rest of the people around me (including close friends & family). I'm glad I'm not the only X-mam in this world :D

Going back to your question, I think that part of the secret to achieve wealth in the less possible time is to make every single $ we have and/or control to work as much as possible for us. Also, if possible, to have as much people as possible to work for us too.

You mentioned you have some equity ($500K). That's a lot of money to have it seating doing nothing (if that is the case). Leverage and gearing are powerful tools for wealth creation. Of course there are risks like in all sort of things in life. However, I'm coming to the conclusion that the risk of every investment is proportional to our own degree of knowledge and experience in the matter. e.g Something that I may consider risky could be preceived as low risk for you 'cose you do it every day... Thus, education and networking are the key for financial success (IMHO). I believe that education and networking would allow us to do more with less resources and in less time and with less efford (sounds like a company cliche).

So, in summary:

1/ To make every $ to work all the time for us.
2/ (if possible) To have as much people to work for us
3/ To do more with less resources, in less time and with less efford.

Keep on thinking,

Regards,
James.

PS. I have read the book (it's an excellent one!)

[Bill.L]

Hi Always_Learning

Contrary to popular wisdom, the way to make great gains in a relatively short time is to concentrate your efforts and not diversify. According to Warren Buffet, you put all your eggs in one basket and then watch that basket like a hawk. Or according to Rupert Murdoch, in terms of property, you always bite off more than you can chew, then chew like crazy.

To get where you want to be in 10 years you will have to take on an increased level of risk. One example would be to use the equity you have to develop a few acres in a seaside town for residential or commercial or both. You may have to find a partner. The risks are obvious, the town doesn't grow in population, cap growth stalls, interest rates rise and cripple you, the partner flies to Rio with the cash etc. However if all goes to plan the rewards can be great. You could keep 1 or 2 of the houses/units and when the rest are sold repeat the process.


The key to success is educating yourself in all the aspects of the tasks.

The above is not how I would go myself as I am less tolerant of the risks involved, but it also means that I won't make the most money possible either.

If I win you can give the book to somebody else as I already have a copy.

bye

[WillG]

Some practical ideas summarised from this thread so far ...

* Identify $$ not working for me and put them to work

* Take on a higher level of perceived risk given new skills learned (Break out of current comfort zone and learn to manage a higher risk comfort zone)

* Have more people working for us - hire better more specialised advisors (accounting, investment)

* Do the numbers on property development deals with new team of specialists

* Do the numbers on commercial properties with new team of specialists

[Peter B]

"Whatever you can do or dream you can do, begin it. Boldness has genius, power and magic to it." - Goethe.

Peter B

[bagg]

Hi AL,

Obviously if you stay where you are you will have a nice nest egg in 10-15 years. Infact I reckon you will have more than you can spend. I think there is some comfort in that fact!

However, if you want to have a shot at the really big time you need to change what you are doing now. You can nibble around getting better developments here and there and so on but it seems you want to crack the big stuff and to do that there are a few avenues I can think of.

1) Gear yourself heavily and search out two 500% increase investments. Say you have 250K - gear it to 500K. *500% = 2.5M. *500%= 12.5M Bingo. There are stocks that do 500% in 1-2 years all the time - but its a big gamble. I personally know of someone who did this very thing. He says that he would not do it again though because the risk he took (in retrospect) was too high!

2) Invent (or develop) something. There are big $'s in this for a bright young fellow.

3) Start a business. This is where big $'s can be made also because you can combine property with selling/servicing.

OR

Just chill out. Is there really a difference between 5M and 10M at retirement? If you do this, you also get to put your energy into other pursuits which might bring you a whole lot more joy on your death bed.

Setting the right goals is real important because you will probably achieve them.

bagg

[dtraeger2k]

Would u not get some satisfaction and profit out of teaching beginners to reach the point you are currently at?

Could be achieved thru:
1) published book(s)
2) Seminar(s)/course(s)

[always_learning]

Thanks everyone so far, there are some good ideas here. Remember I am only considering a plan its only 1/2 serious 1/2 fun.

I will choose a winner on Wednesday night. ( 2 days more)

Thinking about some answers for the posts, I have had some new ideas, building assisted care developments (not nursing homes) ie. smaller elderly assisted care developments. Self storage and/or low rent smaller style flexible format warehouses/factories in growth towns. Naturally I know the huge gap between having a idea and acting upon it to completion. Ideas however are the start of anything worthwhile.

[always_learning]

Thank you everyone for your responses.

I will post my "rich plan" latter to this thread and respond to dtraeger2k request about how I got to where I am today (luck!).

I enjoyed/gained most WillG's response, he is the winner of my spare "Magic of Thinking Big" book.

[alwayscurious]

Curious to know whether it's working..

[np2003]

If you had invested $1million in Google shares last year, and you sold today you would have 5,000,000. :)

[dtraeger2k]

NP,

If you had bought 500k worth of homes in the Mandurah region of WA 4 years ago they'd be worth 1mil last year, therefore acquiring your google shares hehe.

:p :eek: :p

[Twitch]

Curious to know whether it's working..
I'd say this later thread indicates at least one major speed bump on the way http://www.somersoft.com/forums/showthread.php?t=7959

I really wonder how AL is going, he hasn't posted for 6+ months..... too busy on share investments, Mrs AL won the day on not doing any investing .... who knows....

[beech]

I see AL still checks in on the forum but hasnt posted for some time.

[BillC]

I suggest you invest in things that are on the nose at the moment.

How about property you can make some good deals as all the media is
doing the usual to scare people in property

The share market would have been good in 2002 but I would be carefull and
always use stops

Study cycles and work out where the next investment opportunities will occur
There is a great book about the future called (The Next Great Bubble Boom) by Harry S Dent JR

Buy Books Use The Internet and be positive and dont let people talk you out of something you believe in