“Finding Your Way in Life Begins With Rediscovering Your Own ‘Orchard Canyon.’”
Now with a New Year in full bloom, I was introduced to a book entitled “Return to Orchard Canyon” (RDA Press, December 2019) by a friend in L.A. Despite her kind gesture, honestly my first thought was, “will I ever read this because novels are just not my thang.”
Well, I not only read it but DEVOURED IT!
In short, unlike most books about finance and business that drown you in esoteric jargon and ego-driven advice, “Return to Orchard Canyon” provided a non-conventional approach to financial education through powerful storytelling.
I loved the relatability of the book’s three main characters. Each of them is navigating a different stage of their life, in search of answers about money, careers, and dreams. These fictional teachers offer sound wisdom based on the obstacles they’ve faced and experienced.
The inspiration for the story is a real resort called Orchard Canyon on Oak Creek. Nestled in majestic Sedona, Arizona’s red rock country, just a few hours north of Phoenix, Arizona the book paints a picture of this “magical escape” featuring log cabins and a long history (think no TV, hiking by a babbling creek, wildlife, wood-burning fireplaces, apple cider, afternoon tea, and delicious four-course dinners). By way of the book’s narrative, it symbolizes the ideal locale for pondering one’s dreams and life reinvention aspirations.
Let me give you a brief overview of who the author is. His name is Ken McElroy and he is the CEO of MC Companies, a real estate company that today holds over $1 billion in real estate investments. Ken is a Rich Dad Advisor to Robert Kiyosaki (“Rich Dad Poor Dad”), and a Best-Selling Author of. A number of books including “The ABCs of Real Estate Investing”, “The ABCs of Property Management”, “The Advanced Guide to Real Estate Investing”, and the “The Sleeping Giant”).
One of my joys as an independent journalist and global book ambassador is the opportunity to talk candidly with the author after completing the book. Recently I had a chance to chat with Ken by phone from his office in Arizona and found him to be a blast to converse with.
Here are a set of excerpts from our conversation:
Can you share with us a brief overview of your early life?
My journey starts off probably like a lot of people. I was raised by a family that was below middle class, even in some cases, lower than that. My parents (Mom a hairdresser and Dad a contractor) were both hardworking. Neither of them finished high school. I got an opportunity through athletics to attend college, something that I failed to really appreciate at the time.
But it sounds like at some point you committed yourself to learn and grow as a person?
Yes. I read all the time, listened to podcasts and attended seminars. I just poured myself into personal development, particularly around concepts like financial freedom. I was constantly learning and unlearning.
So how did you end up in the real estate investment world?
I purchased some real estate as a young man and that grew into a fairly large company. Today we have about a billion dollars worth of investments along with about 250 employees. Basically we take investor money and purchase commercial type properties with the aim of making everyone wealthy. So I’ve been able to take what I’ve learned and help other people. I consider myself very, very fortunate.
And your involvement with Rich Dad, Poor Dad. Tell me a little about this?
I had the good fortune of meeting Robert and Kim Kiyosaki along the way. The book Rich Dad/Poor Dad just came out around the time I met them over 20 years ago. We found that we were super aligned. Robert and Kim are just wonderful people.
We found common ground around the importance of “cash flow” versus “capital gains.” So I just embraced them and started to give presentations and teach for them. And then I began writing books.
How has your own life journey informed your business philosophy?
That’s a great question. When I got out of college I gave my first $2,000 to a financial planner. Sadly about ten years later it was worth about that same amount [Laughter]. That left me scratching my head thinking, “what just happened here?” What I discovered from that experience is that we often give money to people to invest for us without the discipline of knowing what to ask. These supposed financial experts always spout out a bunch of projections like, “by investing at 6% compounded interest, you’re going to be a millionaire in 20 years or whatever.” So in trying to wrap my head around all of this, I invested in all kinds of things on my own trying to figure out investing.
Interesting. So what did you discover from that experience?
I discovered that real estate, honestly, was the only thing I felt like I had a lot of control over. Financial planners and wealth managers — they aren’t bad people — I just don’t have control over my stocks once I turn my money over. You meet with them once a quarter or once a year. And some people don’t even do that. So what made sense to me was to buy a $200,000 condo, rent it and create a cash flow of $2,000-$3,000 a month from it while the tenant pays down the mortgage. That made the most sense to me.
Are there other advantages to going this route?
Yes, Initially I didn’t even realize the massive benefits of real estate depreciation and cash out ReFi’s. And of course, there are some major tax advantages. Essentially the rent from your tenant or occupant is what pays the banknote. In other words, they pay you first and then you pay the bank. I’ve never found anything that would even match this.
So let’s talk about the book and your use of Orchard Canyon as the backdrop.
Sure. Orchard Canyon is a 100-year-old resort. It was created before Arizona was even a state. And it’s right near the Grand Canyon, a drop-dead gorgeous place.
Over the years I’ve talked with many legacy third, fourth, fifth-generation families and a lot of them have had land and real estate as their base. And they have had businesses on them. So I thought, “what a wonderful way to portray that to a reader.”
So what was your approach with Orchard Canyon given that this was your first novel?
I have found that business books can sometimes be super technical and sometimes dry. And oftentimes they read more like something you’d find in an academic classroom. So I took the actual business concepts that I wanted to have in the book and then I created a story around it.
One of your themes of the book is centered around the main character David and his career in the banking industry. Can you share a little about this?
The reason I picked on banking because if you look at what’s happening to that industry in real life, right before our very eyes it’s shrinking. No one goes into branches anymore and the brick and mortar locations are becoming extinct. Because everything is now electronic, changes are occurring very quickly. So that’s why I picked this particular topic to focus on in the book.
And as you share in the book, David eventually loses his job due to these shifts?
True. Here’s this guy who is highly experienced at looking at debt coverages and net operating income and all the things that a bank does to lend money or to partner either on the equity or debt side. My message here was that sometimes when you are in a corporate job, you don’t realize how much you’ve learned and how valuable you are and how massive your network is.
Sadly though, from having read your book, it appears that David didn’t seem to be paying attention to what was happening around him so that he could make some changes in his life.
That’s correct. He thought that each year was going to be as great as the previous year. So that’s what happens when people are unaware and fall into a corporate comfort zone. Personally, I don’t believe that corporate jobs are all that safe. I’ve seen entire teams of middle-management and departments cut. So this notion of, “let’s go to work in a secure job and get a safe paycheck” simply isn’t true anymore.