Robert Kiyosaki Blog

Financial Education Portal inspired by Robert Kiyosaki


Book Review: Increase Your Financial IQ by Robert Kiyosaki

~ Justin McHenry ~   Robert Kiyosaki is back with another in his “Rich Dad” line of books; this one’s called Chicken Soup for the Rich Dad’s Soul. Just kidding. But the Rich Dad theme has been beaten about as often as the Chicken Soup horse at this point, so if you’ve read Kiyosaki’s other books, you can expect about 50% new material and 50% recycled ideas. And if you expect more than that, you need to learn a thing or two about brand extension. Anyway, the new book is titled Increase Your Financial IQ, and from this point forward I will discuss it on its own merits, regardless of what may have come before. Increase Your Financial IQ has at its core Kiyosaki’s 5 main aspects of financial genius: 1. Making More Money 2. Protecting Your Money 3. Budgeting Your Money 4. Leveraging Your Money 5. Improving Your Financial Information This core section is pretty good; Kiyosaki has a lot of words of wisdom here. In terms of making money, his biggest advice is to get yourself to a place where your income is not entirely predicated on trading hours for money, i.e., only getting a paycheck for hours worked. Whether that means you’re a full-time entrepreneur or you use your extra money to create passive income (owning rental property for instance) is up to you. Protecting Your Income covers everything from taxes to estate planning to prenuptial agreements. Thinking about who might put their hand in your pocket is important, although I think Kiyosaki goes off the rails a bit through his tired tirades against 401(K) investing (or really against any investing that isn’t real estate or gold). One piece of advice I heartily agree with is that railing against the tax system is a waste of time: “I am not trying to change the system. My personal philosophy is that it is easier to change myself than to change the system.” Budgeting Your Money is the strongest chapter in the book. Despite the name, this chapter isn’t really about listing your income and all your expenses and figuring out how to make it all work. It’s more about a way of thinking, a philosophy that forces you to pay yourself first and put the money you’ve paid yourself into assets that make you more money. It’s sort of a “no excuses” budget in that Kiyosaki says if your income isn’t enough to finance your expenses, you’d better make some more income. Your budget should demand that you take some of your capital and put it to work, regardless of which bill collector may be coming after you....

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Financial advice: buyer beware

Diana Clement ~ NZ Herald Not everyone can be a financial expert. And in the same way you might go to a doctor for medical advice or a careers coach for guidance on how to climb the corporate ladder, many people choose to get professional financial advice from someone qualified and experienced. A number of professions offer advice and some overlap. These include accountants, lawyers, financial advisers (also called financial planners), insurance advisers, stockbrokers, and mortgage brokers. You can also get free advice from budget advisers associated with the Federation of Family Budgeting Services. If you’re in debt, this can be a very good place to start because it costs nothing. Or, if you need a kick up the pants as well as advice, you might consider employing a financial coach or mentor. Their role is to keep you on the straight and narrow and focused on achieving your financial goals. Seeing your coach is like getting a weekly or monthly financial reality check. Have you done what you said you would do? Are you fooling yourself with myths and excuses? Banks and life insurance companies also employ people who can give you “advice”. But only about the products that their particular company sells, which may not be best suited to your circumstances. Before you choose an adviser it’s important to understand the way your adviser gets paid. In the case of accountants and lawyers it’s usually on a per-hour basis, which should, unless you’re really unlucky, mean that you’ll get advice best suited to your needs. A small number of financial planners charge by the hour and either don’t take commissions, or reinvest them for you. Many Kiwis aren’t prepared to pay up front for financial advice. If you do, however it will save you wondering if you’re getting the best advice. Typically, financial advisers get a commission or cut from products you invest in and sometimes charge an ongoing annual management fee. In some cases this has led financial planners to recommend inappropriate products to clients. However, most are professional in their dealings with clients and offer best practice advice. Most advisers use what is known as modern portfolio theory, which uses diversification to optimise the return from investors’ portfolios. Usually investors will be given a portfolio containing a mixture of cash, shares, bonds and property, weighted according to their risk and return. Because of the way most advisers are paid, they tend only to recommend those investments that pay commission and residential property investment is often left out of the mix. They will, however, include commercial property syndicates, which do give investors exposure to property. In...

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