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The College-Fund Investment

Rich Dad Poor Dad

This subplot traces a friend’s effort to turn a modest property purchase into a growing source of college funding and retirement income.

increasingupBearing stren­gth in each eventdowndecreasing
A Savings ShortfallA Savings Shortfall from "Rich Dad Poor Dad". A Large Goal The Family’s Concern A friend saves monthly in a mutual fund but sees little progress toward the estimated cost of educating four children.
A Large Goal The Family’s Concern A friend saves monthly in a mutual fund but sees little progress toward the estimated cost of educating four children. The gap between savings and the goal makes the problem seem overwhelming. An Alternative Is Considered Robert proposes using part of the existing savings to acquire a rental house. The suggestion shifts the question from how much the family can save to what an asset might produce.
The Discounted HouseThe Discounted House from "Rich Dad Poor Dad". A Modest Down Payment A Purchase Under Pressure The friends find a three-bedroom house whose seller needs to move quickly.
A Modest Down Payment A Purchase Under Pressure The friends find a three-bedroom house whose seller needs to move quickly. They offer less than the asking price, and the seller accepts. Financing Beyond the Bank An existing non-qualifying loan allows the friend to buy by covering the difference between the sale price and the outstanding debt. The account presents the purchase as a specific solution, not a universal financing formula.
Rental Cash FlowRental Cash Flow from "Rich Dad Poor Dad". Income Begins Tenant Occupancy The owner rents the house and receives a modest monthly amount after expenses, including the mortgage.
Income Begins Tenant Occupancy The owner rents the house and receives a modest monthly amount after expenses, including the mortgage. The cash flow is small but positive. A Patient Plan He intends to use the income to pay down the mortgage and hold the property. The family’s college goal now has an asset and a timeline attached to it.
The Exchange and ReinvestmentThe Exchange and Reinvestment from "Rich Dad Poor Dad". Capital Redirected A Tenant’s Offer The tenant offers substantially more than the original purchase price.
Capital Redirected A Tenant’s Offer The tenant offers substantially more than the original purchase price. Robert recommends a tax-deferred exchange rather than simply treating the sale as a finish line. A New Asset The proceeds are moved into a mini-storage facility, which begins producing greater monthly income. The sequence illustrates how one asset can be exchanged for another with a different cash-flow profile.
A Growing Education FundA Growing Education Fund from "Rich Dad Poor Dad". The Goal Expands Reinvestment Continues After the mini-storage facility is sold, proceeds are placed into another project with still higher projected monthly…
The Goal Expands Reinvestment Continues After the mini-storage facility is sold, proceeds are placed into another project with still higher projected monthly income. That income is directed toward the college fund. More Than Tuition The friend becomes confident that the education target is within reach and sees the underlying asset as a possible retirement resource. The episode closes on financial planning through connected investments rather than savings alone.
1991, when the children are young
After two weeks of searching in 1991
Soon after the house changes hands
1994, after the Phoenix market changes
By 1996