Originally published on jamestimothywhite.com
Years, ago at the ripe young age of 22, I read the book "Rich Dad Poor Dad" by Robert Kiyosaki for the first time and it changed my life. At the time, I was a university student studying English and Music and had no financial education. One of the most intriguing questions in the book that I have pondered for years were " what would you do with $10,000".
Kiyosaki explains that most people would consume the $10,000 and have nothing to show for it. A minority of people would be able to grow a small return on their money and a very small portion of people would be able to grow the money into infinity. At the time, I didn't understand what Robert meant by growing money into "infinity".
As a student, I was able to save up $1,000 to invest. Following the advice of the book, I began to look for an investment to grow my money in.
In 2008, as a brand new investor, I invested my money into a "High interest savings account" with a return of 2.5%. I thought I was a genius. At the time I had a much unsophisticated view of investing and went for the easiest, highest interest rate advertised.
2008 was the time of the big financial downturn and everything was on sale. I could have bought silver for $11/oz (today trading for $25-35 an ounce), I could have bought a rental property in Winnipeg (my home town) for $50,000. The same property today is selling for $150,000. I also could have bought apple stocks for $70 a share (today trading at around $600).
My financial ignorance cost me a lot of money in 2008 and since then I have made leaps and bounds in my investment career:
- With $10,000 in 2008 I would have bought a GIC (2% returns)
- With $10,000 in 2009 I bought silver and doubled my money in a year to cash out and keep the original investment. (100% annual return)
- With $10,000 in 2010 I bought small rental properties (Annual 40-75% cash on cash return plus equity over time)
- With $10,000 in 2011 I paid interest on a monster loan to build a larger cash flowing asset. (High dollar amount invested, Infinite Return over time)
- With $10,000 in 2012 I invest in my brand, my business, my education and my relationships to get infinite returns. (Low dollar amount invested, Infinite Returns over time)