By: Stefan Aarnio,
Real Estate Investor, Serial Entrepreneur and Artist
Originally published onjamestimothywhite.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)
The highest returns are always reserved for the most sophisticated investors and the only difference between me in 2008 and 2012 is my education, my experience and my skill set. Can you turn at $40 lunch into a $10,000, $20,000 or $25,000 return? It all depends on your education and your skills.