Investor Lesson 7 - How Can You Find The Plan That Is Right For You

“How do I find the plan that is right for me?” is a question I am asked often. My standard answer is that it comes in steps:

1. Take your time. Think quietly about your life up to this point. Take days to think quietly. Take weeks if you need to.

2. Ask yourself in these moments of quiet, “What do I want from this gift called my life?”

3. Don't talk to anyone else for a while, at least until you are certain you know what you think you want. All too often, people either innocently or aggressively want to impose what they want for you instead of what you want for yourself. The biggest killers of deep inner dreams are your friends and family members who say, “Oh don't be silly,” or “You can't do that,” or “What about me?

Remember Bill Gates was in his 20s when he started with $50, 000 and became the richest man in the world with $90 billion. It's a good thing he did not ask too many people for their ideas on what they thought was possible for his life.

4. Call a financial advisor . All investment plans begin with a financial plan. If you do not like what the financial advisor says, find another one. You would ask for a second opinion for a medical problem , so why not ask for many opinions for financial challenges? Financial advisors come in many forms; a reference list is provided later in this chapter. Choose an advisor equipped to assist you in developing a written financial plan.

Many financial advisors sell different types of products. One such product is insurance. Insurance is a very important product and needs to be considered as part of your financial plan, especially when you are first starting out. For example, if you have no money but have three children, insurance is important in case you die, are injured, or for whatever reason are unable to complete your investment plan. Insurance is a safety net, or a hedge against financial liabilities and weak spots. Also, as you become rich, the role of insurance and type of insurance in your financial plan may change as your financial position and needs change. So keep that part of your plan up to date.

Two years ago, a tenant in one of my apartment buildings left his Christmas tree lights on and went out for the day. A fire broke out. Immediately, the fire crews were there to put out the fire. I was never so grateful to a bunch of men and women. The next people on the scene were my insurance agent and his assistant. They were the second most important group of people I was grateful to see that day.

Rich dad always said, “Insurance is a very important product in anyone's life plan. The trouble with insurance is that you can never buy it when you need it. So you have to anticipate what you need and buy it hoping you'll never need it. Insurance is simply peace of mind.”

IMPORTANT NOTE: Some financial advisors specialize in helping people at different financial levels. In other words, some advisors work only with rich people. Regardless of whether or not you have money, find an advisor you like and who is willing to work with you. If your advisor has done a good job, you may find yourself outgrowing your advisor. My wife Kim and I have often changed our professional advisors, which include doctors, attorneys, accountants, etc. If the person is professional, he or she will understand. But even if you change advisors, be sure you stick to your plan.

I had a goal of being a multi-millionaire before I was 30 years old. That was the end result of my plan. The problem was, I made it and then immediately lost all my money. So while I found out that there were flaws in my plan, my overall plan did not change. After losing my money after reaching my goal, I simply needed to refine my plan by what I had learned from that experience. I then had to reset my goal, which was to be financially free and a millionaire by age 45. It took me to age 47 to reach the new goal.

The point is, my plan remains the same. It just gets improved upon as I learn more and more.

So how do you find your own plan? The answer is to begin with a financial advisor. Ask the advisors to provide their qualifications to you and interview several. If you have never had a financial plan done for you, it is an eye-opening experience for most people.

Set realistic goals. I set a goal of becoming a multi-millionaire in five years because it was realistic for me. It was realistic because I had my rich dad guiding me. Yet, even though he guided me, it did not mean I was free from making mistakes . . . and I made many of them, which is why I lost my money so quickly. As I said, life would have been easier if I had just followed rich dad's plan. Being young, however , I had to do things my way.

So start with realistic goals, and then improve upon or add to the goals as your education and experience increase. Always remember that it is best to start by walking before you begin to run in a marathon.

You find your own plan first by taking action. Begin by calling an advisor, set realistic goals, knowing the goals will change as you change…but stick to the plan. For most people, the ultimate plan is to find a sense of financial freedom, freedom from the day-to-day drudgery of working for money.

The second step is to realize that investing is a team sport. In this book, I will go into the importance of my financial team. I have noticed that too many people think they need to do things on their own. Well, there are definitely things you need to do on your own, but sometimes you need a team. Financial intelligence helps you know when to do things on your own and when to ask for help.

When it comes to money, many people often suffer alone and in silence. Chances are, their parents did the same thing. As your plan evolves, you will begin to meet the new members of your team, which will assist you in helping make your financial dreams come true. Members of your financial team may include:

You may want to hold meetings over lunch with all these people on a regular basis. That is what rich dad did, and it was at these meetings that I learned the most about business, investing, and the process of becoming very rich.

Remember, that finding a team member is much like finding a business partner, because that is what team members are in many ways. They are partners in minding the most important business of all—the business of your life. Always remember what rich dad said: “Regardless of if you work for someone else or for yourself, if you want to be rich, you've got to mind your own business.” And in minding your own business, the plan that works best for you will slowly appear. So take your time, yet keep taking one step a day and you will have a good chance of getting everything you want in your life.

My plan has not really changed, yet in many ways, it has changed dramatically. What has not changed about my plan is where I started and what I ultimately want for my life. Through many of the mistakes, the learning experiences, the wins, the losses, the highs, and the lows, I have grown up and gained knowledge and wisdom along the way. Therefore, my plan is constantly under revision because I am under revision.

As someone once said, “Life is a cruel teacher. It punishes you first, and then gives you the lesson.” Yet like it or not, that is the process of true learning. Most of us have said, “If I knew back then what I knew today, life would be different.” Well, for me, that is exactly what has happened as I traveled along my plan. So my plan is basically the same, yet it is very different since I am different. I would not do today what I did 20 years ago. However, if I had not done what I did 20 years ago, I would not be where I am and know what I know today. For example, I would not run my business today the way I ran my business 20 years ago. Yet, it was losing my first major business and digging myself out from under the rubble and wreckage that helped me become a better businessperson. So although I did reach my goal of becoming a millionaire by age 30, it was losing the money that made me a millionaire today . . . all according to plan. It just took a little longer than I wanted.

And when it comes to investing, I learned more from my bad investments, investments where I lost money, than I learned from the investments that went smoothly. My rich dad said, if I have ten investments, three of them will go smoothly and be financial home runs. Five will probably be dogs and do nothing, and two would be disasters. Yet, I would learn more from the two financial disasters than I would from the three home runs . . . In fact, those two disasters are what make it easier to hit the home runs the next time I am up to bat. And that is all part of the plan.

1. Are you willing to start with a simple plan, keep the plan simple, but keep learning and improving as the plan reveals to you what you need to learn along the way? In other words, the plan doesn't really change, but are you willing to allow the plan to change you?