Straight Path: Mental Shift

(Back to Intro)

Chapter 1 – The Crucial Mental Shift

Kris Krohn opens Chapter 1 of The Straight Path to Real Estate Wealth by quoting Robert Kiyosaki who noted in Rich Dad, Poor Dad that his “two fathers” had two different mindsets.

To reach financial freedom requires a willingness to embrace an uncommon way of thinking, and Kris makes it very plain that failure to do so will prevent success in applying his Straight Path approach. He bluntly states that “Straight Path real estate is intended for people with a specific worldview, much of which goes against the grain of popular culture and investment advice.”

Kris suggests that Americans have an “accumulation mindset” that has been promoted by the Industrial Age need for consumption. As a result, our ideas about retirement are tainted by a false idea of what is “safe” and what is “risky”.

We’ve been caught in “The 401(K) Trap”. We’ve been trained to believe that, if we work thirty years, contribute to a “qualified plan”, diversify our portfolio, and wait, “the market” will reward us with a large enough “nest egg” to allow us to live off the interest. Unfortunately, “the market” has not played nicely in recent years, cutting deeply into many people’s nest eggs even as the extremely low interest rates have made the size of nest egg required for retirement punishingly large. The average person now needs millions of dollars in their nest egg to retire comfortably.

Accumulation is not the answer

One of the misguided strategies encouraged by the “accumulation mindset” is that of making early payment of your home mortgage a top priority. While it’s important to reduce debt, early repayment of your mortgage can not only drain available cash. It can also create a negative return on investment. Taking inflation into consideration, the average return on home equity is a negative 3.6%. Why pay off your mortgage early just so you can lose more money?

Having $100,000 in home equity might look good on paper, but a better approach would be to invest that $100,000 into something that could produce a significant return, adding not only to your income, but to your “nest egg” as well. Eventually, you should pay off your mortgage, but don’t do it until after you have secured your retirement. That way, you can pass your house on to your kids rather than selling it to a finance company through a reverse mortgage.

Kris continues by saying that he believes in “disciplined saving and financial responsibility”, but he rejects the idea that “financial independence comes from handing our money off to institutions and praying that they’ll take good care of it.” We need “something more practical and likely to succeed”. “We need tools for outpacing inflation, beating burdensome taxation, transcending market volatility, and producing passive income.” Most of all, we need a fundamental shift in mind-set. We need to learn to create our own opportunity rather than waiting for “the market” to do it for us.

Because of the critical nature of this mental shift, Kris warns that real estate is not an “end-all, be-all wealth creation vehicle.” One can’t treat real estate as just a different kind of 401(K). It requires personal responsibility, innovation, and tenacity, but real estate can provide greater control, flexibility, and potential returns than most other methods of wealth creation. The alternative is to buy into the illusion that other vehicles are “safer”, but in the 2008 crash, “$1 trillion worth of stock value held in 401(K) and other ‘defined contribution’ plans was wiped out”, and if personal IRAs are included, that number reaches $2 trillion.

While others risk the whims of the stock market, Kris says that Straight Path investors are currently building safe, stable returns that will allow many to retire in ten years or less. He says, “The core difference between accumulators and investors is that accumulators try to create retirement from one or two household incomes, while investors create assets that work for them; the investors have multiple income streams to draw from and to leverage.”

Kris then goes on to share a case history of an investor who’s 401(K) went from $247,000 to $130,000 before he discovered the Straight Path. In the following three years, he added $250,000 to his net worth making more in three years than he had in the previous eighteen years of 401(K) investing.

What is an Investor?

Kris offers this definition, “A successful investor is someone who knows how to accomplish something that most people cannot do.” He sees investors as problem solvers possessing a different mindset than most. They see an abundance of options in situations where others struggle to see even a few. He believes it is a mindset that can be cultivated and provides another case study of a young mother of six who was feeling trapped in a less than desirable home. With the Straight Path approach, she was able to sell her current home, purchase a much nicer one, and generate enough additional income to cover it’s cost.

Kris recommends two concepts to help develop an investor mind-set:

  • A Possibility Attitude
    • Develop a positive, can-do attitude. It helps you see possibilities.
    • “You will become wealthy to the degree that you can see an abundance of options.” – Kris Krohn
  • The Law of Now
    • “Do not wait. The time will never be ‘just right.’ Start where you stand, and work with whatever tools you may have at your command, and better tools will be found as you go along.” – Napoleon Hill

Do What Works

Kris closes with this thought. “Do what works.” The old accumulation mindset has failed. Do the numbers yourself. How much will you need to accumulate to retire on your current income? The Social Security statistics are disheartening. Remember our earlier quote: “At age sixty-five, 75 percent of all Americans are dependent on relatives, family, and charity; 23 percent are still working; and only 2 percent are financially independent.” — You need a new plan.

Next week, I’ll be reviewing Chapter 2 – Overview of the Straight Path System.

If you want to read ahead, the entire book is available in hard copy at or as a free PDF download at

And if you want to learn about Kris Krohn’s “real estate done for you” program, check it out at

To Your Success,
Don Gibbons

Are you Limitless?

Breaking Free

Limitless people are those who know the truth…

The only limits we have are in our own mind.

Set yourself free by joining The Limitless Movement. Get free training and mentoring in any of several life skills. Push yourself to the next level, and then the next after that. There is no limit to what you can accomplish if surrounded by a community of positive, can-do people.

Sign up for free, or chose one of our paid subscriptions, but start today to release your Limitless Potential.

The Limitless Movement