A girl I went to high school with (Shereen) is entrepreneurial and she recently produced this frankly, pretty badass video interviewing another female entrepreneur. They have some pretty great advice (especially towards the end of the video) that I think is good for people who are thinking about doing something they love, related to their interest, and getting out of working for the corporate ladder.
One thing about this interview that immediately piqued my interest was when the interviewee mentioned the book Rich Dad, Poor Dad, which if you haven't read it yet -- please immediately run out and purchase it! Even if you are not able to put those concepts into use immediately, it's mind-opening to think about ways to leverage money to work for you, rather than you working for money all the time. Geoff was the person who had introduced me to this book, because he says that it aligns closely with his own investment philosophies. He also thinks that in general (and especially in Berlin), people our age do not talk enough about investment -- they're still on the mindset that the government will take care of us when we get old, which in the case of Americans, is simply not true (and I think the German socialist system will as well hit problems down the road). And when they do talk about investments, unfortunately for the most part, they're thinking in the wrong frame of mind about it.
Here is an example of the mindset difference:
My parents were incredible savers. They each worked in Taiwan for airlines for about 15 to 20 years, and bought a condo with their savings. When they sold the condo and moved to the States with my sis and me, they were about 40 years old and my parents put a cash down for $180,000 on our house. That's really incredible, because I doubt that in 10 years, at the moderate rate that I am saving (and I earn substantially more than they did), I'd have half of that cash, saved properly in the bank, to throw down on a house.
When I told this story to Geoff (who is very entrepreneurial and has been working for himself since he graduated from college... the road has not always been smooth, but even so, he wouldn't trade it for the world!), Geoff's response was that he would have tried to seek out as many loans as possible, and then leveraged that $180,000 to buy a two- or three- family unit house. Because if you crunch the numbers and make reasonable estimates of rental income, it is possible to rent out the remainder units and then to use that to cover most of the mortgage, so that essentially your living cost is free. Risky, yes, but that's what Rich Dad, Poor Dad recommends and that is what Geoff's always on the look out for when he makes his own investments -- finding ways to leverage his money, so that the investments bring in profits every month instead of him throwing more money into the investment every month. In fact, the whole premise of Rich Dad, Poor Dad can be summed up in saying that regardless of your day job, it's what you do with the money that you save that will really have a long-term impact on your income. And that is still a radical mindset shift, even for me as I hear Geoff talk about his strategies. Geoff's whole philosophy is that if you diversify, you would have some riskier investments that bring in higher profits, and then some safer investments that bring in minimal profits -- but note, none that would cost you money in the long run! -- and then if you accumulate the profits over time and re-invest them in other things, then sooner rather than later, you are making enough monthly investment income to gain financial independence. And that is the take-home message of Rich Dad, Poor Dad. In the end, if you invest properly, you should be free to work on anything that you choose and not be bound by whether you are making money, because simply the investments you have made could be generating enough income to sustain your living. (It's not that easy to do, obviously, because you have to be willing to risk your life-long savings, and you have to really do a lot of market research before plunging into any investment -- the first time Geoff bought a piece of high-risk property in Newark, he had gone around and looked at over 100 houses beforehand! He trained himself to become an expert at looking at the potential of a place and to crunch numbers to minimize risk of loss. But, if ever you were to make such risky investments, it's now when you're young and you can still recover from the losses...)
Instead of leveraging their money the way that Geoff would have done, what my parents did was the traditional American thing: They put down $180,000 on the house, bought a house that was worth $300,000, and then were drowning in mortgage payments until the housing bubble, at the peak of which they sold their house for double the price they had purchased it for and retired on that profit. Essentially, my parents got lucky (and my mom cannot stop being thankful for this), but our generation -- we can do better. And we can do so without changing our day jobs -- we can still be the teachers that we are, but become smarter with what we do with the money that we have saved.
I thought I'd throw it out there in case you have not yet come across this amazing book, Rich Dad, Poor Dad, which is every bit as impactful as the girl describes it in her video interview. I think it's a must-read for everyone in their 20s and 30s, right now, who lives in America, and (for those of you who don't already love your jobs) the girl being interviewed also makes a great point about starting off small, and how to apply that idea of ownership to something of your own interest!