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The past: completely clueless and ignorant of finances

I started my journey to financial freedom a few years ago. It all started from Robert Kiyosaki’s TV show I came across one night. His book, “Rich Dad, Poor Dad”, truly inspired me and split my life into before and after. I was from Taiwan and new to the United States, taking a few courses in community college then, planning to go to the Chinese Medicine school. The plan was dropped since academic education won’t teach how to get rich as Robert said.

Jumped into real estate market

I convinced my American husband to invest in real estate. We were renting and struggling to make the ends meet, nonetheless we started to look at houses, and a few months later we found a good deal and went ahead to purchase it. The housing market was still hot, and credit was still easy. We borrowed all the money we needed to close the deal.

About a year later, with the equity from the house, we bought our second property and rent it out after a few months of advertising. About another year later we bought our third property, a major fixer-upper, which we spent 9 months renovating and then moved into. It took us several months to sell our first house. It was quite a stressful year.

Looking for other ways to make money

So with about $100,000 dollars from the proceeds of the sale, we took a break from real estate investment, and I explored other possibilities. First, I bought some jewelry from online auctions and set up an jewelry website. Then my husband wanted me to take Feng Shui course to go into Feng Shui consultation business. And then I learned about forex and shifted my focus to forex trading.

“I was rich!”

In the beginning, it was very stressful, but very soon I found a couple of systems that claim to be very profitable and involve no-guess work. There were a few months that I spent very little time in trading and yet I was making so much money. I felt I was rich for the first time of my life. Money doubles and triples so easily with so little work. I spent a lot of time shopping online or in stores. Strangely the feeling of richness did not come with happiness, but instead with emptiness. I guess because it came so easily that it was meaningless.

Then I got margin call and lost all my accumulated profit and most of my principal. By that time the money we had in the bank also has gone. Because I had accumulated about $100,000 in my trading account, I did not care about the amount of money remained in the saving account until I got margin call and lost most of money in my trading account. You can make a lot of money fast in forex, but you can lose it even faster.

So the $100,000 we had only lasted two, three years. To my own amazement, I was one of those people who had a windfall of money and lost it all in a few years. I used to think that it couldn’t be me. I used to think how stupid those people were.

Where did the money go?

What happened to our money? Beside loss in forex? I did a balance sheet of all our current necessary expenses, dismissing of all the luxuries we had spent, like trips to Las Vegas and Mexico, like dental implants, like business ventures, and it came about $30,000 short a year. Our housing payment of our new residence plus the increased negative cash flow from our rental due to the new adjusted interest rate are eating most of our monthly income. We like to sell the rental property but not sure if we can find a buyer at all. The housing market is in downtrend, and the foreclosure rate is extremely high.

I started to track our expenses closely and started to cut down budget. In about 6 months, I was able to cut down enough expenses to the point of breaking even. I started to broaden my reading into general investing and personal finance instead of limited to real estate.

Mindful living financially

At this point of my journey, I came to greatly appreciate the simple methods of achieving wealth–

Mindful living in all areas of life–especially what we ignore the most–the financial part.

Step 1. Track Expenses and Income

Step 2. Cut Expenses

Note: I started this blog on January 2008, and I plan to write 5 steps. Thank you for your visit. Don’t forget to bookmark it.

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