Thursday, June 21, 2007

Lessons from June 16th

Last Saturday, playing Cashflow 101, I was the Business Manager. With the not insubstantial monthly cash flow of this occupation, I could afford to finance some big deals. Problem was, I took the first one that came my way. I'll explain.

The lowest priced limited partnership was the card I drew. Because of the starting cash that I had, the cash flow I already had monthly and the cash flow from the LP, I could do the deal. This left me about $330 (I don't recall the exact figure) monthly in cash flow. This could be okay still, as long as I didn't run into a lot of expenses.

I did though. 3 babies, seemingly a couple of doodads each time around and ever increasing bank loans. Thank God, I didn't buy the boat!

This also dropped me into small deals which meant stock and real estate, where real estate covered the down payment with the cash flow. Careful control of bank loans, including some for stock at $5 and $10 per share, and slow going in the small deals (everyone else was on to big deals!), and eventually I was able to sell stock.

Before being able to sell, careful cash management and tight investing, like a tight poker player, allowed me to get back to about $700 per month cash flow despite the additional loans and the kids. At $700 per month, I could accumulate cash and pay down loans to add $100 per month cash flow or get into a deal.

Eventually selling the stock allowed me to pay off loans sufficiently to bring my cash flow up to $1500. Within a few turns, it was up to $2000. So I really was back into big deals and pretty quickly put myself out of the Rat Race.

So what did I learn? I should have passed on the LP and taken a smaller big deal, even if it took quite a few turns. Because I took this, I had to pass on the widget company (I almost always try to start a business in the basement). Too bad, because I drew both cash flow increase cards AND had the $50K buyer come by. There were additional deals that I could have done that wouldn't have strapped my cash so severely. And put money in my pocket every single month.

What did it cost me? Well, I still got out of the Rat Race as well as the fast track, but I'd have done it at least an hour sooner, it not two. That's a long time. And a lot of hard work.

Game from June 16th 2007

This past Saturday was the most recent Twin Cities Rich Dads and Moms Cashflow Club get together. We had a little bit smaller crowd totaling 8 people including myself. But, hey, that's still boards with 4 people each!

Those in attendance included James Greelish, Terry Fairley, Herb, Rich, Judy, Susan Sudhalter and Bill Holmund. Rich, Judy and Bill were here for the first time. Rich and Judy were playing Cashflow for the second time. Bill is an experienced player and hosts a weekly game in Worcester. Bill is a realtor/broker, Bill is in financial services and, I'm sorry to say, I don't know what Judy does. But I expect them all to be back so I'm sure I'll learn more.

James, Terry, Bill and Sue played Cashflow 202. I believe this was the first time for Terry, Bill and Sue. And if I recall correctly, after a long struggle, all got out of the Rat Race! And a couple of them achieved a $50K increase in cash flow and either 3 dreams or their own dream.

The table I played Cashflow 101 on included Herb, Rich, Judy and of course myself. Judy got out of the Rat Race first, followed by Rich, myself and Herb. Yes, all escaped the Rat Race. Rich achieved $50K in increased cash flow first and he and Judy headed to dinner. Herb and I continued, I achieved $50K increased cash flow and Herb was well on his way.

I'm looking forward to the next game Sunday, July 21, 2007. Until then, look for deals, educate yourself and make progress to escape the Rat Race.

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