When I was in my twenties, I was like a lot of other people just getting started in life. I graduated from college and worked for awhile. Then I went to law school, and ended up owing over $64,000 in student loans. I had tons of debt, few assets, and no formal financial education.
Then something happened that profoundly changed my life. I read three books that transformed my understanding of money. The books were:
- Rich Dad, Poor Dad by Robert Kiyosaki
- The Millionaire Next Door by Dr. Thomas Stanley & William Danko
- The 9 Steps to Financial Freedom by Suze Orman
I started managing my money according to three distinct principles inspired by those books. I didn’t recognize at the time, but I now see them as the Three Guiding Principles of Financial Freedom. By following these principles, here’s what happened:
- First, I began investing in TRUE assets. I don’t count my home, my car, or any of my personal stuff (electronics, bicycles, clothes, etc.) as assets. You’ll see why when you read the First Guiding Principle.
- Second, I paid off all of my student loans early. I had the option to pay them off over a 30-year period. Instead, I paid off my student loans in 9 years, which saved me 21 years of payments and over $50,000 in interest. I made this choice because I followed the Second Guiding Principle.
- Third, I have no consumer debt: no credit card debt, no student loan, no personal loans, no home equity lines of credit, no car loans. I’ve amassed enough real estate, cash flow, and retirement savings so that I’m not forced to go to a job I hate. I don’t consider myself rich, but I don’t have to do work that I don’t want to. I reached this point by age 40 due to the Third Guiding Principle.
But, I am not and have never been perfect when it came to money. I’ve made HUGE, crippling, financially-debilitating mistakes along the way. At times in my life, I’ve had almost every kind of debt, including:
- $100,000 in personal loans from family and friends
- $64,000 in student loans
- $35,000 in credit card debt
- $25,000 in a Home Equity Line of Credit loan
- $7,000 in a car loan
Yup – that’s over $230,000 in consumer debt that I racked up! If I hadn’t gotten back on track with the Three Guiding Principles, I very likely would have lost my retirement accounts, my savings, and both my building and condo. Thankfully, I followed the Three Guiding Principles and paid off all of my debts and began building wealth.
It’s embarrassing to share with you how I’ve massively failed with money. Why do I do it? Because I want you to know that even if you mess things up as badly as I did, you CAN turn things around. It doesn’t matter what stage of life you’re in. I achieved financial freedom, and you can too.
Ready to learn more? Click below to learn about the Three Guiding Principles.
May you choose to be financially free,
Let’s get this party started! Here comes the First Guiding Principle of Financial Freedom, Part 1
Love Letter to Robert Kiyosaki