Robert Kiyosaki Blog

Financial Education Portal inspired by Robert Kiyosaki

#

How to Find Business Mentors

We all need to have mentors if we have to reach some goals. Mentors are there to guide us along the way. They have achieved success in their endeavors and so they can teach us the do’s and don’ts that we should accomplish in order to mimic their success. Now that you’ve chosen your business, it’s time to choose your business mentors and your team. If you were planning to climb Mount Everest next year, wouldn’t you want to speak with someone who had survived the journey to the top? You’d be surprised how many people, starting to climb up their own financial mountains, ask the advice of people who are languishing below sea level. It doesn’t occur to these climbers that their advisors have little or no firsthand experience. Kiyosaki said that the world is full of S- Self Employed quadrant types trying to tell others how to enter the B or I quadrant. Seek out a mentor who “walks the talk”—someone who has already achieved what you would like to achieve. For instance, you would not want someone who achieved his or her success in real estate to necessarily become your mentor for building a business to sell car supplies. As you begin, you’ll also need a team of business mentors and advisors. You should not risk the ordeals of building or investing in businesses without the expert help of others. Rich Dad Tip: “You don’t need to know every answer, but you do need to know who to call for the answer.” Find a Business Mentor Amateurs might not have mentors, but professionals do. One of the most important steps you can take upon entering the B- Big Business Owner quadrant is to set aside any discomfort you might have about asking for help. Seek out role models and learn from them. Fishing for prospects isn’t all that difficult. It’s a matter of swallowing your pride, working up your courage, and approaching people. Business people are busy but they are generally willing to share their success stories. Many talented folks in the B and I quadrants are willing to lend a helping hand. You can find them out through the following avenues: Successful business people that you know. They may know someone who has succeeded in the business you have chosen and be willing to introduce you. Your local civic and volunteer organizations. Join several organizations and you will meet others who may have experienced success in the very business you are starting. Your local newspaper and local TV news station. Start by looking for successful people in your own backyard. Which of them do you admire and would you like to...

Read More

Turning One Red Paper Clip into A House

Money is a Handicap Most people assume that one needs money in order to invest. Robert Kiyosaki and Wayne Palmer know that money can be a handicap because it limits your thinking. When money is involved, people focus on how much money something is worth. Without money in the equation, the entire focus moves to value. When we focus on value we can create exchanges where all parties come away feeling like they got more than they gave. The convenience of using money can also stop you from thinking creatively. Training your mind to solve problems without money is a skill that is truly priceless. Watch this video and be inspire by how one creative young man turned an ordinary red paperclip into a house: Source:Turning One Red Paper Clip into A...

Read More

How Do You Know Which Mortgage Prices Are Lower?

Consumers shopping for a mortgage are frequently confronted with having to make a choice between complex alternatives. For example, they can select an FRM on which the rate is fixed at 5 percent for 30 years, or an ARM on which the rate of 4.375 percent holds only for five years, after which it changes with the market. On both loans, furthermore, a lower rate is available if the borrower pays points, an upfront charge expressed as a percent of the loan amount. In addition, borrowers have to pay a variety of fixed-dollar fees to lenders, and other fees to third parties, such as title agents and appraisers. To deal with this problem, the federal government in the Truth in Lending Act decreed that lenders had to disclose one number designed to be a comprehensive measure of all costs, which borrowers could rely on in comparing one loan with another. They called it the annual percentage rate, or APR. By law, whenever a lender discloses an interest rate, they must disclose the APR alongside it. Developing a composite measure of all mortgages costs was a great idea, but APR is the wrong measure. For one thing, very few borrowers understand it. The APR is expressed as a percent, same as the interest rate, except that the APR is somehow a composite of the percentage rate and dollar costs. How they are combined is a mystery to most. The mystery is even deeper on ARMs because the ARM rate is subject to unknown change in the future. Few loan officers or mortgage brokers understand it either. Indeed, within most lender firms, the only ones who understand how the APR is calculated are the technologists responsible for having it programmed, and sometimes they get it wrong. Not a Comprehensive Measure A second problem is that, despite its intent, the APR has never been the comprehensive measure of cost it was supposed to be. A comprehensive measure would cover all costs that would not arise on an all-cash transaction, but in practice third-party charges are not covered. In principle, this is an easy problem to fix, and the Federal Reserve, in recent proposals to amend its Truth in Lending regulations, has proposed a fix. It has only taken them 30 years. The third problem is more difficult. Cost depends not only on the characteristics of the mortgage but also on the characteristics of the borrower. A given set of mortgage features may carry different costs to different borrowers, but this is not reflected in the APR. The most important difference between borrowers is in how long they expect to be in their...

Read More

Free online money management software: moneyStrands

The newest ways to manage your money don’t require expensive software. They are web-based—you can log into them anywhere—even on your phone. And, best of all, there are many free options to help keep your budget in check. One of them is moneyStrands (moneyStrands.com). moneyStrands.com is easy to use. You enter your account information and moneyStrands breaks every expense and deposit in each of your accounts into different categories (home, insurance, auto, shopping, groceries, etc). Clicking on the details tab allows you to see your account broken up in a color-coded pie chart. Each “pie piece” is a different category and you can easily change the time period you are looking at (anywhere from the current month to “ever”).  If you feel that you are spending too much in one category you can set up budgets and have moneyStrands.com track your progress. You can also schedule alerts—no more overdraft surprises! But what makes moneyStrands.com really stand out is the ability to anonymously compare your investing and spending habits to other people within your demographic, or with similar traits. Answer a few easy questions and the program compares your income and spending habits with relevant sub-groups (e.g. students) within the community to see how your expenses match your peers. moneyStrands.com uses social recommendation technology to help you find the best ways to invest and save money and to recommend things for you to buy. You can view your comparisons by category in either a bar graph or bubble chart. moneyStrands.com offers a variety of widgets that you can activate, including: recommend financial products, tips, favorites and what to buy.  Another neat widget is the “financial condition” widget. It’s an easy-to-read graphical representation of your financial situation. If you hover over the graphic it offers an explanation: “Your financial condition is excellent when your average monthly expenses amount to less than 30% of your monthly income.” Web-based means immediate access to all of your accounts: bank, credit cards, and investing accounts. You can log in at home, at work, or anywhere you have Internet access. moneyStrands promises that their site is just as secure at any other banking or investment site. Their website promises that security is a top priority. moneyStrands.com is free. They also offer a free mobile app for the iPhone. See more here: Free online money management software:...

Read More

Combining Money With Your Honey

Can a couple where both participants have different attitudes towards money and different incomes survive in a relationship with combined finances?  A differing philosophy or income is not an automatic problem. What’s really important is the goal. If two people agree on some basic principles, there is room for differences in habits. In a partnership, there are ways each individual keeps the other in check and offers compromises. Don’t go into the fusing of your finances with the intent on changing the other person’s philosophy. It’s true that he or she will have to be willing to compromise on some issues, but most likely, if you’re reading this, you will be leading the charge. In compromising, you may also have to be willing to loosen your grip, but just a little bit. Consolidating your finances can be accomplished, but varying philosophies and major differences in income can make the transition difficult. Focus on these thoughts: What are your goals? Are you looking towards retirement with each other? If so, then saving for retirement must be a priority for both of you. Do you plan on having children? The two of you may not be able to contribute equally towards these goals. Your investment actions, including asset allocation and risk tolerance, should support your goals. Which accounts should be combined? Any accounts you pay bills from can be combined, with each contributing the amount or percentage of their income that you decide is fair together. Any savings accounts for future couple-related goals, like purchasing a house, can be combined. Do you want to keep separate accounts for some fun money? Some couples do this and use their fun money to “surprise” the other with gifts or spend on singular indulgences. Who will manage the money? It’s best when only one individual in the couple tends to the details. The family money manager should keep the other periodically (and briefly) informed of the financial state of the union. Even with one money manager, major financial decisions should be discussed together. Be prepared for sacrifices and compromises. That probably goes without saying, as any relationship requires this. Money tends to amplify the issue. How will you handle disagreements? What are your obligations? Mortgages or rent, phone bills, cable, and insurance are only the start. Will you be expected to take care of an aging relative? Does your partner have outstanding student loan debt, or will you be supporting him through medical school? Working together as a team towards shared goals can help to overcome other differences, allowing spenders to work together with savers and high-earners to work together with low-earners. Accept the...

Read More

Allowance: How much is too much?

Allowance: do you give one, if so how much and why? There are so many questions regarding allowance it’s difficult to know what to do. Do you give your teenager a credit card? Some parents do. Do you give your teenager an allowance based on the chores they do? Most do. Do you give your teenager an allowance even after they get an outside job? Some still do. What’s right and what’s wrong? Well, if you ask me there is no right or wrong in this question, merely what serves your family and what will not. How much? It’s hard to know how much to give your teen and there are many different philosophies. One common rule of thumb is to give them one dollar for every year of the child per week. At that rate I’d be giving out $42 per week which is larger than my monthly gas and electric bill – I’d soon be broke myself! Some parent give a credit card to their children that the parent pay off – if this works for you fine. Some suggest to provide pre-loaded money cards so the amount is limited. To read about different levels of allowance NewYorkMagazine.com has an article where teens themselves explain their personal situation. A very strong argument for giving an allowance to teens is they are at the stage of child development where they are struggling for their independence and identity. Giving them some financial independence may support this very normal development. Why? What is it that determines whether or not we give an allowance to our teens? Money for chores: this is an age old argument. For every expert that touts giving money for chores to teach financial responsibility and management, there is one that will argue that point. Robert Kiyosaki, author of “Rich Dad, Poor Dad” writes, “Allowance and chores are a dangerous combination. Gratitude in children doesn’t depend on whether kids have to do chores in order to get an allowance.” The trick with giving an allowance as a reward base for chores is you had better make sure that the reward is good enough, or the chores will never get done. And what happens when your kids “go on strike?” Our children don’t generally learn from us (including money management) by those things we say to them. They learn from those things they see us doing and they learn from their own mistakes. What works for me and my family may not work your family. The bottom line is giving an allowance is part of your own personal financial budget. Working this out with your children is showing...

Read More

4 Types Of People

Kim Kiyosaki (wife of Robert of Rich Dad Poor Dad fame) shares an interesting insight about what she calls: 4 kinds of people, grouping them by their mantras: I must be right — people who love to be validated and proven correct. I must be comfortable — people who like settling in their comfort zones and not push boundaries. I must be liked — people who live to please others and patronize. I must win — people who will do anything to succeed. Although doubtless there are more archetypes than Kiyosaki claims (depending on whatever typology you subscribe to), the thing I find interesting about the 4 types above is how they would react and utilize critical thinking. Critical thinking seeks to clarify, not simply validate. It is often uncomfortable and involves challenging the status quo. It is not patronizing, and is often deprecating. It seeks to achieve its end goals. Of the 4 types above, only those who seek to win would push criticism to its limit. Kim says know who you’re dealing with and that will bring you success. In critical thinking it’s the same: it’s important to know who your talking to, who your audience is, and who you’re criticizing. Original post: 4 Types Of...

Read More

Employee Or Entrepreneur

Being an employee or an entrepreneur isn’t so much a measure of what you do for a living as it is a statement about your mindset. There’s a huge difference not only between how they make money, but in how they think about themselves. Many self-employed entrepreneurs say that when they wake up every morning, they are unemployed. They know that unless they go out and make something happen, they won’t have any income that day. Employees on the other hand have no such fears—provided of course that they still have a job. Running a little late? No problem, you’ll still get paid. Feeling a little under the weather? No problem, stay at home and collect a personal day. Sometimes it gets to the point where employees are more concerned about their benefits—which they begin to consider as entitlements—than about actually providing value to their employer. And this is fine, as long as the employer tolerates it. But make no mistake about it—an employee who forsakes value in favor of the entitlement mentality is ultimately at risk of losing that precious job. So back to that statement about entrepreneurs waking up unemployed. Yes, they realize that unless they accomplish something meaningful during the upcoming day—by somehow adding value to society—they won’t have any money coming in. But they also know—and here is their motivation—that if they create massive value during the day, they will reap massive rewards. Every day that Bill Gates woke up “unemployed” while he was starting Microsoft carried him one day closer to becoming the richest man in the world. That’s how the entrepreneur’s mentality works. If you are in any way concerned about building long term wealth, but think about your income through the lens of an employee, you have a problem. You need to recast your approach and adopt an entrepreneurial spirit. And this doesn’t mean quitting your job and starting a little craft boutique at the local flea market. That’s a hobby and maybe a small business, but it isn’t an entrepreneurial approach. What you need to do is to find a way that you can start an enterprise which will allow you to generate a huge cash flow. Then you need to invest your profits wisely—in other words, by doing it yourself instead of relying on a purported “financial advisor.” If financial freedom and tremendous wealth are goals you’re serious about, lose the employee mindset and start thinking like an entrepreneur. In his ground breaking book Rich Dad’s Cash Flow Quadrant, wealth creation guru Robert Kiyosaki teaches that there are four quadrants for creating cash flow—Employee, Self-Employed, Business Owner, and Investor. Long-term...

Read More

5 Strategies to Lower Your Rent Now

When it comes to lowering their monthly housing payments in the down economy, renters have homeowners beat. Refinancing a mortgage requires plenty of paperwork, a stellar credit score and weeks of effort. But property owners faced with profit-sucking vacancies and cash-strapped tenants are increasingly willing to negotiate. According to a recent survey from rental property marketplace Rent.com, 68% of landlords reported lowering rents or giving one or more months free to retain tenants. Try these five strategies to cut your bill: Research the market Learning what other people in your building and neighborhood are paying for comparable properties can help you figure out whether you’re overpaying, and how much room you have to negotiate, says Steven Cohen, the president of consulting firm The Negotiation Skills Company, which helps clients negotiate for better deals. Ask other renters what they pay, check similar property listings on Craigslist, and get a local comparison on RentoMeter.com. Cohen’s daughter Abigail tried that tip and found that others in her neighborhood on New York’s Upper West Side were paying an average 20% less than she was for a studio apartment. She brought those figures to her landlord and ended up with a new lease this summer for $1,550 instead of $1,850 — an 18% discount. Play up qualifications “If you aren’t a good tenant, you won’t have a strong case,” says Peggy Abkemeier, the president of Rent.com. “The landlord may not want to make concessions to get you or keep you in the unit.” Point out that you’ve always paid on time, have kept the property in great shape and haven’t had any complaints from neighbors. Renters hunting for a new place have less leverage here, but they can benefit from a reference from a previous landlord. Take on a roommate Obviously, the more people sharing your space the less rent you’ll pay. But landlords may also offer a break to fill under-housed units. When Eric Woodbury and two friends were apartment hunting in Medford, Mass., in July, one property manager offered them a three-bedroom unit for $2,000, or roughly $667 apiece. Or they could move into a $2,200 four-bedroom where one tenant was already in place, cutting the per-person rent to $550. “That was a big selling point for us,” he says. Look beyond rent If your landlord stands firm on the monthly rent, ask about other possibilities to cut costs. For example, you might negotiate for more utilities to be included or a discount on extras like storage space or parking. Rent.com found 38% of landlords were willing to reduce security deposits, and 8% relaxed pet policies (which typically include an extra security...

Read More

Is the worst over?

A recent article by Robert Kiyosaki entitled Preparing for the Worst caught my eye.  After all, isn’t this sound financial advice for all of us?  That’s why we Fools have things like emergency funds. The article, however, wasn’t about wills, life insurance, or anything like that (which is what I was expecting based on the title), but rather a list of reasons why Kiyosaki thinks that “The worst is yet to come” in the stock market.  Unfortunately, however, Kiyosaki doesn’t tell us how to go about preparing for it. I’ll have to admit that while some of his reasoning as to why we may have more tough times ahead in the market (and I don’t profess to know one way or the other the way the market’s headed over the short or even intermediate term) seems plausible on the surface, I think he misses the mark in a few places. 1. I believe the stock market is being manipulated. I suspect the government, banks, and Wall Street are doing everything they can to keep the market from crashing. Our leaders know that nothing makes the world feel better than a raging bull market. Government’s hand has been a very heavy one in the economy lately.  Everything from bailouts of companies like AIG and GM to the Cash for Clunkers program is evidence of this.  Maniplating the stock market?  I’m not so sure.  Manipulating the economy (which has an impact on the stock market)?  Absolutely.  I wish the manipulation were related only to the stock market and not to the economy as a whole, because I fear that the long-term ramififications of many of the government’s recent actions may place an unnecessary drag on the economy for a long time to come. 2. In my view, this global crisis has been caused by the Federal Reserve Bank, the U.S. Treasury, Wall Street, and the central banks of the world. They caused the problem, profited excessively in doing so, and now profit by being asked to fix the problem. While each of the above entities certainly had a hand in creating the mess, laying this problem solely at the feet of financial istitutions is a bit like blaming McDonald’s and Burger King for America’s growing obesity problem.  We gladly borrowed all that money and took out loans for all kinds of stuff despite a lot of good financial advice that’s readily available to us that urged us not to take on too much debt (you know, at places like this Fool.com outfit I keep hearing about) just like we gladly and willingly wolf down Big Macs and Whoppers despite all of the information out...

Read More
Page 2 of 14123...10...Last »