My Story

My Story

If you work in corporate America the most important thing you can do for you and your family’s future is to follow this blog.  Whether this is your first step toward financial freedom or a supplement to an existing and successful program.  I am very excited to have the opportunity to assist you in the fulfillment of your goals.  Your decision to follow this blog has placed you in a select group of action oriented individuals who have chosen to achieve financial freedom rather than merely to dream about it.  I want to tell you that I am just like you.  I thought about starting a business of buying some real estate but my life was really good as it was and I really didn’t do anything about my thoughts of doing something in business.  I was working in corporate America.  I looked just like everybody that sits up and down the halls where you work.  I am an engineer with a Bachelors of Science in mechanical engineering and an MBA.  I work for a multinational corporation heading up a corporate department.  I make very good money at my job.

One day I noticed that nobody was retiring.  The building that I work in has between 400 and 500 employees of different age and experience levels.  It dawned on me and I challenge you to contradict me.  NOBODY retires anymore.  I remember that every so often the secretaries would reserve one of the conference rooms…one of the nice ones.  The secretaries would decorate it.  They would bring in a cake and ice cream.  Then this old guy would come in and bring his wife.  Sometime this was the first time she had ever been to his office.  She would be all dressed up in her Sunday best clothes.  Everybody would say nice things about him give him some gifts and then he was off into retirement.  That never happens anymore.  When was their last retirement party at your place of work?  This is the time when baby boomers are reaching retirement age.  There are more people eligible to retire now than ever before but nobody is retiring.  What happens now is they get this old guy and move him out of his nice office to some crappy office down the hall.  They take all his good projects and give them to other younger workers.  The old guy gets so upset that he quits.  Later you get a corporate announcement the following week about the old guy.  It says he retired last week wish him well.  I decided that I didn’t want to go out like that.  I was going to be too valuable for that to happen to me.  Then it happen to a guy that almost single handedly build one of our divisions.  I realized then that it could and was going to happened to us all.  We were not going to retire we were going to be thrown away.

I was in corporate America working sixty to eighty hours a week at a job that I really loved.  Although I was paid very well and I was under a pension system and had a 401k I was still trading time for money, I was too busy earning a living to have a life.

When I graduated with my bachelor’s degree in Mechanical Engineering, I was in my orientation with a major international chemical company.  There were people that came in to explain how the purchasing process worked, how project funds were approved, how to organize projects for successful monitoring of costs and completion, how to work with contractors and bids.  They even explained the difference between projects that were going to be capital versus expenses.  Then the session changed and the session came about human resources.  They told us about the progressive discipline process, hours of work and how the performance review process worked.  Then the benefits session came up and the director of human resources came in to do a section on retirement.  As a 23 year old newly minted engineer retirement was not even on the radar.  All I could think about was buying fast cars and chasing as many girls as I could.  But I did learn from him how to retire.  He told us that retirement was a 3 legged stool.  You can’t retire effectively without all 3 legs.  The 3 legs are company pension, social security and personal savings.   He said that social security is in place, and working for a good company like DuPont, Union Carbide or Enron your pension is secured, but the government realized the personal savings was too low in America.  Because of this they instituted a change to the tax code in section 401k.  This was intended to add incentive for people to save.  This was an adjunct to your retirement program.  As you know that now the 401k is THE retirement program.  They have taken an ancillary part of the retirement program and made it the only retirement program. We are looking to retire with only 1 leg under us.  And a leg that is awfully unprepared to withstand the stresses of a long and enjoyable retirement life.

The US census on 1970, 1980, 1990, 2000 and 2010 all show that 90% of the US population retires at or below poverty income levels.  Do you wonder why a nation of 300 million people would take a path that invariably ends in this result?  It is because most people know very well how to ply their trade.  Carpenters know how to miter corners, engineers know how to calculate stresses, and plumbers know how to make the joints leak proof, but nobody knows how money works…it just isn’t taught.  That is why I decided to start this blog.

The Huffington Post 09/30/2014 stated …the median income of U.S. retirees is less than $16,000 compared to the median American worker’s income of $31,000. Retired workers received an average of $1,294 per month in Social Security benefits as of December 2013. That adds up to a paltry $15,528 per year

My story in financial freedom really started earlier than this but started being solidified when one day I was flying to Salt Lake City.  I was a frequent flyer so I was upgraded to first class.  I started talking to the guy sitting next to me.  I found out that he worked in my same building.  I was on the 18th floor and he was on the 25th floor.  He was a financial advisor and was flying on his own nickel with a first class ticket (needless to say he makes a lot of money).  The conversation naturally got around to him asking to invest some of my money.  I asked him my standard question of how good are you at what you do.  I though what does he do…then I came up with the basic duty as I saw it making people rich.  So I asked him how many people he had made rich.  He laughed it off and gave me some cute answer.  I laughed also and then came back to my original question.  How many people have you made rich.  He told me he could not make anybody rich.  That was something they had to do themselves by saving diversifying their investments and living responsibly etc.  I asked him then what is he going to do with my money.  He talked about determining my risk tolerance and expected retirement age and give me advice on diversification based on that.  I told him I can get that for free on the internet (what ever happened to stock brokers that analyzed company financials and made advice on which stocks were going up and which were going down?)  I remember on the movie Wall Street when the Gordon Gecko character played by Michael Douglas stated that he has stock brokers working for him that only picked stocks that went up.  I asked him if he could do that and he said nobody can…I know somebody can but I have no way to find them.  That pretty much turned me off of financial advisors.  So I was talking to some of the other guys I work with.  Some of them more senior and some at my level.  I asked them what they were doing about retirement.  Most of them had no idea what they were doing.  They were saving as much as fast as they could but most of them had an asset allocator model.  It says basically that if you take the amount of years you have to retire you put that amount in stocks and the rest in bonds.  They frequently paid large sums of money to some money manager and got not much more that you could get from a free online asset allocator website.


The typical asset allocator is just a report like below:

Asset Allocation by Investment Category
Your Profile
Age 45
Current assets $100,000
Savings per year $5,000
Income required 0%
Marginal tax rate 28%
Risk tolerance Balanced (5 scale of 0 to 10)
Economic outlook Moderate (5 scale of 0 to 10)
Suggested Asset Allocation
Stocks 65% $65,000
Bonds 15% $15,000
Cash 20% $20,000


One of the people I talked to was a Vice President at my company and he said he was investing in real estate.  I asked him what he did.  He told me that he buys as much house as he can afford for him and his family to live in.  Then when he retires he will sell the house and live off the money.  He expected to end up buying a house worth $1million and when he retires he is planning to sell that $1million house and buy something smaller and live on the money.  I thought about that and decided that was not a good strategy because you still needed to live somewhere and your wife is used to living in $1million houses.  She is not going to take well to living in a $100,000 house again.  What that VP did was he bought a weekend house at the lake that he was going to use to inflate the money he had in real estate so that when he retired he could sell his primary house and live in his vacation house.  I thought that was a good idea so I bought a vacation house.

At my lake house I stumbled onto this guy that lived next door to me on vacation.  He had a large house and drove nice cars and he was always home.  All the other neighbors were doctors, lawyers, engineers and they either left early in the morning to get to their offices or only came down on the weekends.  This neighbor and I were the same age.  It turned out that I learned later on that he was born on my birthday…not just the day but the year.  He and I were the exact same age.  This guy was home all the time and didn’t ever seem to work.  I asked him what he did and he said nothing.  I said, what do you mean nothing?  He said that he owns real estate.  I was intrigued.  My old thoughts about owning real estate came back.  I realized I was standing in front of a man that did what those late night real estate gurus like Dave Del Dado, Robert Allen, Carlton Sheets etc were talking about but he was actually doing it.  We started talking and he had done his real estate a while ago and basically owned 2,000 units of apartments and was making passively $50,000/month.  He told me how he did what he did and I basically did it.  I am now blogging about what I did.  You don’t have to luck up and end up with a house next to a rich guy to get the advantages of a rich guy’s knowledge.  This put me on the path to learn how to do this.  Once you are on the path you can always do it in any market anytime.

Currently I own 10 rental houses.  The rents from these houses makes my life really comfortable.  I live in a 5,000 sqft house with a movie theater and a pool.  My wife drives a European convertible sports car and my high school aged son drives a new convertible.  Why do I talk about this?  Because you can have this too and you should.  Unlike the late night gurus that tell you that you can do this with no cash or credit, I am telling you how to do this in a realistic manner.  I am talking about real estate INVESTING.  You can’t invest what you don’t have so I am talking to people with money to invest, I will just help you invest in a manner that will have you rich.

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