Blissful Ignorance SUCK!!!!

Actually it is great… until you realize how clueless you’ve been… for decades in my case.

My wife and I were celebrating our anniversary in Morro Bay a few weeks ago. We scrounged thrift stores and consignment shops along Main Street. She likes shoes and hats. I like music instruments and books. While in a store, I came across some books by Robert Kiyosaki and bought “The Cash Flow Quadrant: Rich Dad’s Guide to Financial Freedom” for $2.95. Little did I know, that book was going to disrupt my blissful state of ignorance. Did you know that most people do not see money?

We think the things we see are all that we have to work with. However, most of the forces that influence money (both how much you make and how much you spend) are not in plain sight. Interest rates, hidden maintenance costs, confidence levels, a government decision, etc. have a huge effect on the deals you get into, and the long term effects the asset will have on your bottom line. I had a meager understanding of such things until I read that book! I felt a certain reluctance to get into a contract, and now I understand why. I was too ignorant, but was aware enough to know this fool was not quite ready to part with his money. So what did I do?

I dug deep into deal analysis so I could “see” the money. I played with Excel and learned how to set up a system for analyzing multi-unit purchase opportunities. I like to know and understand how things work: what influences Cap Rate? How does amortization really work? Things like that. I got really excited (and a little peeved) when I saw how much of a difference a tenth of a percent can have on both the monthly payment and the amount of interest you’d pay when the mortgage fully matures. I definitely know more than I did the day I bought Robert’s book. The worlds of money and real estate investing play their own games with a unique set of “rules.”

If you are starting out like I am, dig into deal analysis regardless of your chosen strategy. It is a great way to see money your eyes do not see right now. Deal analysis is part of doing your due diligence too. In the real estate and money worlds, either you play or you get played. Those who get played soon say “B ‘bye” to their dearly beloved money.

That’s my rumor, and I’m sticking to it!