Last Friday I wrote about Casey Serin, the young man who is deep in debt because of risky real-estate investments. He’s blogging about his predicament at iamfacingforeclosure.com. Casey stopped by Get Rich Slowly yesterday and had this to say:
I don’t see why a person CANNOT get rich quick… but still do it in an honest and safe way. Whenever you hear “Get Rich Quick” you think somethhing bad.
And yes, if you read my story, it DOES sound like i’m just a big screw-up. AND YES.. I did do some stuff that I am NOT proud of (liar loans). However, I am learning my lessons and hoping to make a comeback.
I am determined to find a way to make an honest buck in real estate in a down market. My mentor “Rich Dad” did it. It took him only about 10 years. Now he has 20K+/mo in PASSIVE income from REAL ESTATE.
Is 10 years too quick? What about 5 years?
That’s an interesting question. How quick is too quick?
It’s not impossible to get rich quickly — the day before I wrote about Casey, I shared advice on how to handle sudden wealth — but it’s dangerous to focus on quick wealth as a goal. I’m convinced that people get rich quickly by chance, not by intention. If get rich quick schemes worked, more people would do them. You’d read and hear documented tales of success. But they don’t work. They’re mostly scams designed to transfer money from saps like Casey into the hands of others.
My advice for Casey is this:
If you have a burning passion to make these sorts of plans succeed, then pursue them with only a portion of your finances. Follow tried and true personal finance wisdom with most of your money. Take 90% of what you earn, and do the boring stuff with it: pay off debt, start an emergency fund, invest for retirement. You are so young right now, that if you would invest just $5000 each year until you’re 50, you could retire then as a millionaire. (Assuming 10% returns.) This is with almost no risk. Why try to get rich all at once? Why not ride it out?
If you’re dead-set on trying to get rich quickly, then don’t use all of your capital to do so. Do the safe stuff with 90% of your money. Save the remaining 10% to make real estate purchases. If you strike it rich, great. But if you don’t, then at least you haven’t mortgaged your future. This isn’t ideal for most people, but you have the drive and desire, so it gives you something to play with. But this means that you’ll have to work in order to meet your goals.
I don’t want to kick Casey’s dreams. Dreams are good, and I think people should pursue them with gusto. Too many people make a practice of telling others why their plans won’t work instead of lending support. But when your dreams are at odds with reality, you need to re-evaluate.
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This article is about Odds and Ends