Not Many Know This About Kim and I
In 1985, my wife Kim and I were homeless. We were unemployed and had little money left in savings. Our credit cards were exhausted, and we lived in an old brown Toyota with reclining seats that served as beds. At the end of one week, the harsh reality of who we were, what we were doing, and where we were headed began to sink in.
Kim and I had a lot of debt when we started our lives together. We estimate we had a total debt of about $400,000 and growing, as interest accrued. Much of this debt came from a business I lost early on in my career. (The total business loss was almost a million dollars. Approximately $500,000 of the debt was paid off by the business.)
It’s hard enough building a business when there is not much money coming in, but it was even harder with $400,000 of debt hanging around our necks. It was not a fun way to start a life together.
This Journey Of Our Homelessness Began In December Of 1984
We left Hawaii with two suitcases and nothing more. I sold everything I had and shut down my manufacturing business and we moved to California. California was a hotbed for new models of education.
Many of the hippies had grown older and were teaching seminars on some very strange and interesting subjects. The common themes were: open your mind, change your paradigms, and breakthrough your limiting realities. Kim and I attended as many seminars as we could, gaining new ideas and observing different teaching techniques.
We ran out of what little money we had in about three months. It was the toughest time of our lives. To survive, we maxed out every credit card we could get our hands on, which meant debt was increasing again.
We Kept Our Situation Quiet
For the most part, Kim and I looked quite normal on the surface. When friends and family were informed of our plight, the first question was always, “Why don’t you get a job?” We knew we could always find safe, secure, high-paying jobs. Both of us were college graduates with good job skills and solid work ethics. But we weren’t after job security. We wanted to be free financially.
We did odd jobs occasionally and earned a few dollars here and there, but we did that only to keep food in our stomachs and gas in the car. Those few extra dollars were only fuel to keep us going toward our singular goal. I must admit that during moments of deep personal doubt, the idea of a safe, secure job with a paycheck was appealing.
As those of you who have fallen behind know, it is hard to get ahead with debt hanging over your head. It was tough just buying a car, which we did at an extremely high-interest rate. During this period of our lives, we worked at odd jobs after we worked on our business. So, we know what it’s like to be swimming in debt.
We know what it’s like to struggle financially as well as endure the stress and anguish it causes.
Being Homeless Was Not An Experience I Want To Repeat
Kim and I fought and argued often. Fear, uncertainty, and hunger shortens the human emotional fuse, and often we fight with the person who loves us the most. Yet love held the two of us together, and our bond as a couple grew stronger because of the adversity. We knew where we were going. We just didn’t know if we would ever get there.
That year tested our souls, our dreams, and our plans. It was December of 1985 before Kim and I received any money from our new education company. We survived from December of 1984 to December of 1985 on next to nothing. We took life one day at a time. All I know is we operated on faith. Always in the nick of time, something good would happen, and we would continue on, living on very little.
On several occasions, we considered declaring bankruptcy, but we did not. We thought it best that we learn our lessons and pay back the money. For us, paying the money back was a wise decision because it made us stronger as a couple, smarter as investors and business people, and more confident about our future.
By 1990, we were out of consumer debt and had paid back most of the $400,000 I owed investors. Today we are richer, not just because we have a lot of money—but richer from the experience and the lessons we learned digging our way out of debt.
Money Is Important, Yet I Didn’t Want To Spend My Life Working For It
When people ask why Kim and I were homeless, I tell them it was because of what my rich dad taught me about money. That is why I didn’t want a job. If we were going to be responsible citizens, Kim and I wanted to have our money work for us, rather than spend our lives physically working for money.
Because my rich dad had explained the quadrants to me, I was better able to see that small differences grow into large differences when measured over the years a person spends working. Because of the CASHFLOW® Quadrant, I knew it was better to decide, not so much what I wanted to do, but more who I wanted to become as my working years progressed. In the darkest hours, it was this deep knowledge, and the lessons from two powerful dads, that kept us going.
By 1989, we were millionaires. Although financially successful in some people’s eyes, we still hadn’t reached our goal of true financial freedom. That took until 1994. By then, we never had to work again for the rest of our lives. Barring any unforeseen financial disaster, we were both free financially. Kim was 37 and I was 47.
Editor, Rich Dad Poor Dad Daily