I was in the bookshop of the departure lounge at Sydney airport with my husband, waiting for the next flight on our belated (but extended) honeymoon. We were heading to Fiji after revisiting New Zealand (the country where we had met) and a short pit-stop to visit relatives in Brisbane.
We knew we were lucky; not everyone could afford to take a month out, but we had worked hard for it. We were both self-employed, 'working in IT', and were well paid and in demand. In our youth (26 and 30), we could not imagine it would ever be any different.
We were over halfway through our trip, finally heading back towards England and the rest of our life and there was definitely the sense of endings and new beginnings. I guess that was why, instead of browsing through fiction, I ended up in the personal development section of the store. "Rich Dad, Poor Dad" by Robert Kiyosaki caught my eye. I bought it. On the plane, I nudged my husband every few minutes to share the stories and advice. I was transfixed. How come I didn't know this stuff already? I was an intelligent, curious young person - I'm sure I would have remembered someone telling me what I needed to do in order to become financially free.
The book changed my viewpoint on money, income and my financial goals. I recommended it to anyone who seemed interested. I learnt the theory. I knew I had the advantage over others that were on the hamster wheel. We tried to create our own asset; an IT software business. We worked hard to grow it and train others to take it over so we wouldn't have to work in it every day. We were financially successful, and had an enviable work-life balance. We had two young children by this point. How many fathers could get home in time for tea and bath time every night, and how many mothers could choose their own hours (3 days a week, term time, with holidays off) and still get paid for full time?
Once it was done, we were able to take stock of our situation. Fortunately we had been frugal and had savings and investments put away. We hadn't gone on lots of expensive holidays. We hadn't bought the bigger house despite being offered a crazily large mortgage. We hadn't splashed out on new cars. We had no debts other than our mortgage. This was the legacy of our Rich Dad, Poor Dad learnings and we were grateful to have a financial cushion on which to plan what we were going to do with the next 25 years of our working life.
But what we had failed to do was create assets. We had no income other than that which we went out to physically earn. We had no second homes that we could rent out (despite many conversations while the market was rising about how we should invest in buy-to-let). Our stocks and shares were falling in value. Bank interest was minimal. We needed to increase our income, but how?
Our first step was to look at what we had learnt. Along the way we had realised that the only way to make real money was to have either people working for you or money working for you. We were not experienced at investing money, but our previous approach of building a business where people worked for us had failed.
We looked more closely at why our business had failed. It was an uncomfortable experience. We decided that if we started another business we would:
- not hire staff unless we absolutely had to and instead outsource work to freelancers.
- sell a product or service that was in demand whatever the economic climate.
- rely on excellent, ethical products that reputable businesses were developing and promoting. This would ensure that we didn't have to invest in branding and research and development but could concentrate on delivering the product or service.
- Select a product or service that had a long product life-cycle. Software product life-cycles are getting increasingly short, so it was at this point that we realised that the software and technology industry was no longer for us.
My husband was the quickest off the mark. He researched and researched and came up with a few options. They were (and still are) excellent opportunities and I'll discuss those another time. I was supportive but distracted by children, and the need to get some immediate, regular and secure income. I became a secondary school teacher, which absorbed all my non-family time, while he worked from home on new enterprises and got jobs when necessary.
It is now four years since we liquidated the business and I am about the hit 40. We are still not financially free, but we are working towards it and not giving up. We have learnt a lot from our mistakes and at times it has been hard to keep going, to keep believing that we can achieve financial freedom. At times it seems that we've not come very far along the path towards our goal since I read 'Rich Dad, Poor Dad' on the plane to Fiji. Why is this? Why haven't we been successful?
I've been thinking about this a lot recently. It might be the landmark birthday coming up, or it might be that my children are now grown enough to not need constant attention and I now have some mental space to reflect and take action. Whatever the reason, I now realise that I need to go back to basics and to re-educate myself again. I need to work with my husband, make some goals, and commit to taking some risks that I was too scared to take before. I don't want to look back in another 14 years and realise that I've not moved closer to financial freedom.
Today I am drawing a line in the sand. All that came before was preparation and from now on every day counts. We are going to build assets that bring in income that means we don't have to go out to work. We are going to have to make some short term sacrifices to do this. Wish me luck. No, scratch that, don't wish me luck. What I need is strength to not get distracted, a clear mind, more financial education and the ability to take calculated risks without fear.
