SEARCH ENGINE KEYWORD RESULTS :

• how to make money with blogspot with paperclip
• the man that got rich with a paperclip
• the man who got ritch with an paperclip

Discover the advantages of accounting software from Microsoft Small Business. View a live demo of Accounting Express, a free financial management resource.

Read more:
Microsoft Accounting Express

Making money through property investing by generating a passive income is a sweet proposition for anyone.

It is a rich man who doesn’t dream of making money without having to lift a finger for it, and the poor man who fools himself into thinking it is possible.

Talk to any successful property investor and you are bound to get the same story; that in order to create a passive income, you’ll have to work damn hard to achieve it.

Lisa Dudson, co-author of Create Wealth, a bestselling book on property investment, says many who go into in real estate suffer from a delusion that there is easy money to be made in housing.

“The whole passive income thing is a bit over-used and under-estimated, really, because nothing is free in this world – you have to work for it,” Dudson says bluntly.

A successful property investor, financial planner and entrepreneur, Dudson knows of what she speaks.

The tough talking 40-year-old Aucklander has sweated her way to financial freedom, and along the way advised hundred of clients and readers how to do it right in real estate.

Dudson says very few ever get to the stage of achieving a genuinely passive income, where rental revenues are creating positive cashflow instead of being used to finance debt.

Why?

Time for one. “It doesn’t happen in five minutes; it sometimes takes 25 years,” she says.

Patience aside, making a profit in property takes sound planning, strategy, wise counsel and firm financial foundations.

These four areas are the focus of talks that Dudson gives to property investors when she is invited to speak on the subject. She’s a regular on the lecture circuit.

Dudson drives home the same message for clients, most of whom she sees after the damage has been done.

“I’ve seen a lot people this year that have $3 million to $4 million worth of property, but they also have 95 per cent debt on it. They’re just sitting on diddly- squat at the end of the day, because if they sold it all today, they’d probably have zero in this market.”

Dudson says investors who blunder into property without a proper game plan are setting themselves up for disaster.

“They’re building up all these properties and buying all these things, but it’s not actually delivering a hell of a lot to their bottom line. Then they say they’d like to retire in five years and I say, ‘Well, how the hell are you going to do that!’ They haven’t actually given it any thought. They’re not sure what they are trying to achieve.”

If property investment requires air- tight planning, clear thinking and foresight, it also requires the right kind of personality.

Dudson says some investors might actually be better suited to the stock market, but they’ve forged into property often for no other reason than “because everyone else was doing it at the time”.

She believes that is one of the main benefits of professional advice; getting guidance about investment options that take into consideration risk tolerance, interests, desired and required rate of returns and long-term goals.

Ironically, many are drawn to property because of the belief that it is one area of investment that doesn’t require professional advice.

Andrew King, Dudson’s co-author in Create Wealth, says many view it as a safe alternative to the stockmarket, given what’s happened with finance companies and more recently the stock market crash.

“A lot of people view it as a bit more secure. They see it as something they can do themselves and have control.”

And while Kiwis have a reputation for being property crazy, King says the numbers do not back it up.

“People say New Zealanders over- invest in property, but it’s just not true. There’s only about 7 per cent of the population that does buy investment property. And that’s because it requires more effort than simply giving your money to a fund manager,” he says.

Tangible or not, at the end of the day most investors just want some assurance they’ll make some money.

Dudson doesn’t believe one is better than the other by measure of return.

“But there is for an individual – one that is better than another,” she argues.

“It depends on how active or passive you want to be with your investments; it depends on how much risk you want to take on, it depends on where your interests lie, what your skills are, all of those things are really important when deciding which investment strategy to choose.”

King agrees property is not for everyone but he has a personal preference for property. He thinks there is more be gained from it.

“A lot of sharebrokers and financial planners love to pull out these charts that show shares outperforming property but I haven’t seen a decent one yet. A decent property, done properly, will always out- do the sharemarket, I believe.”

So what constitutes a decent property done properly?

King points to several factors including buying at the right time, buying in the right area, building up equity and being a good landlord. The importance of the latter should not be under-estimated as a key factor in boosting the bottomline.

“You’ve got to treat tenants like customers, and if you treat them well, they tend to treat you well. If you manage a property well, maintain it, treat the budget well, spend money on maintenance, know the residential tenancy acts and know your rights and responsibilities – all those sorts of things – you save yourself a lot of time, a lot of grief, and you will maximise your income return.”

It is a formula that has served Rotorua’s Debbie Van Den Broek well. Last week, she was named Landlord of the Year by the New Zealand Property Investors’ Federation.

She started with one property 20 years ago and worked her way up to “less than 20″ with her husband.

Van Den Broek says persistence, hard- work and high standards as a landlord have landed her in good stead financially.

“No matter what area, lower or mid class, I like to have a house that is of a good standard of repair with unstained carpets, vinyl that is not all chipped to pieces, a stove that looks clean and you want to cook on and good quality thermal drapes. At least when your tenant moves in they don’t need to clean it immediately and you’re inclined to have people look at the house more if they move in when it’s in good condition.”

She demands as much from her tenants in return and is vigilant about screening.

“I do face-to-face interviews, reference checks, credit checks . . . I will try to go around to their existing house to see how they’ve kept it, I’ll pass by their car and if it’s full of empty McDonalds wrappers and rubbish, well, I think my house is going to look like that fairly soon, too.”

Getting to where she is today, didn’t come by chance or without mistakes. Van Den Broek credits a good friend and mentor in Wellington for inspiring and advising her. She also counts financial guru Robert Kiyosaki (of Rich Dad, Poor Dad fame) and real estate tycoon Dolf De Roos as key influences.

Dudson, also an avid reader, says personal interest is another driver of success. “You’ve got to have some kind of interest in it because you’re going to have some s . . . . . experiences.”

Read the original post:
How to make money from property

SEARCH ENGINE KEYWORD RESULTS :

• robert kiyosaki on property investment

It’s graduation season, and time for commencement speakers to offer a few words of wisdom. The class of 2009 has had more than its share of challenges. It began college in one of the most competitive pools ever and is graduating into one of the worst economies in decades.

But it’s not the first to face these challenges. We asked several prominent individuals about the best and worst financial advice they received—and their guidance for this year’s grads.

David Bach, author of the best-selling FinishRich books:

Mr. Bach says one of the most important financial decisions of his life was buying a home with a friend shortly after college. “It made me a financial adult in my early 20s,” he says. He had to get a crash course in mortgages, taxes and insurance.

Best advice: To buy the house and work hard. Working hard in your 20s and 30s could determine how successful you are later in life.

Worst advice: Selling the house too soon before home values soared in California.

Advice to grads: Mr. Bach graduated in 1990 when the economy was horrible and “California was a mess.” Don’t give up if you’re not finding a job. Ask someone for an informational interview. At the meeting, get three more names of professionals to meet. That’s how he eventually landed a job.

Paula Deen, restaurant owner, author and Food ­Network host:

Ms. Deen learned about life and Southern cooking from her grandmother. Years later, she launched a catering business with $200 and her family recipes. The catering evolved into restaurants, cookbooks, television shows and even furniture.

Best advice: A lot of great advice, she says, came from her aunt and uncle. Among other things, her uncle told her not to complain about paying taxes because “if you’re paying taxes you’re making a living.”

Worst advice: To not repay a note she had co-signed. (She didn’t take the advice.)

Advice to grads: Get all the experience you can and be persistent.

Robert Kiyosaki, businessman and author of the best-selling “Rich Dad, Poor Dad” books:

Mr. Kiyosaki writes and speaks about his rich and poor dads, “both of whom were good men.” He bases his poor dad on his own father, who was highly educated but not business savvy, and his rich dad on his best friend’s father, a successful commercial real-estate investor.

Best advice: From his rich dad, who recognized that Robert had the potential to be a successful business owner. He told him to learn how to make sales if he wanted to be a successful entrepreneur.

Worst advice: From his poor dad, who told him to take the safe path and “to go to school and get a job” when he returned from serving as a pilot in Vietnam. He didn’t recognize that Robert would “never be a corporate guy.”

Advice to grads: “If you’re going to be an entrepreneur, find a successful one who will teach you.”

John W. Rogers Jr., chairman and CEO of Ariel Investments:

Mr. Rogers, who graduated from Princeton, launched Ariel Investments in 1983 when he was 24.

Best advice:“To come home to Chicago.” A lot of friends went to New York but he returned home. “My family knew people who could open doors,” he says. “Friends and family became my first clients.”

Worst advice: “I was getting a lot of advice to go to law school. That would have been unnecessary. I wasn’t interested in it, and I was eager to get started as an investor.”

Advice to grads: “You want to be known as the best teammate in whatever organization you join. Look out for your teammates every step of the way. Be a good listener, teammate and friend, and live up to the commitments you make. Whatever you promise you’re going to do, you’ve got to do that.”

Mary L. Schapiro, chairman of the U.S. Securities and Exchange Commission:

Ms. Schapiro is the first woman to serve as the agency’s permanent chairman.

Best advice: From her parents: “Be careful abut getting into debt.”

Worst advice: When she got out of law school, friends advised her to delay saving until her salary was higher. “That ignores the value of saving even small amounts over a long time,” she says. “It also ignores the importance of getting into the habit of saving.”

Advice to grads: “Live within your means.” People need to know how to manage debt so don’t borrow without understanding the implications of the debt and how you’ll repay it.
 
Carrie Schwab-Pomerantz, ­president of the Charles Schwab Foundation:

Ms Schwab-Pomerantz learned a lot about investing and saving from her famous father, Charles Schwab.

Best advice: “Live frugally and save for a rainy day.” “Saving for a rainy day is in my DNA,” she says. “I’m also judicious about credit cards. I’ve always had one or two cards and use them for convenience, not to extend my income.”

Worst advice: “Buy any mutual fund.” Fortunately, she didn’t listen. She opened an IRA and built a diverse portfolio.

Advice to grads: “Live off 90% of your income.” Save the other 10%, first as a cash cushion. “When you’re young you don’t need all the bells and whistles in life,” she says.

–Ms. Mincer is a Dow Jones Newswires reporter in Jersey City, N.J. She can be reached at jilian.mincer@dowjones.com.

See more here:
When I Was Your Age…

Flexo takes issue with Robert Kiyosaki’s definitions of asset and liability:

An asset is something that puts money in my pocket.

A liability is something that takes money out of my pocket.

I can see Flexo’s point in that Kiyosaki is recasting the definition of the words.  The proper financial terminology would say that:

An asset is something that is owned, while

a liability is something that is owed.

I live in a house which has a mortgage against it.  I don’t really own the house yet, because I still owe tens of thousands of dollars on my mortgage.  (Even after that, I can readily find out who the real owner is if I fail to pay my property taxes.)  The home itself has some value.  I can sell it to someone for money.  It’s an asset in the financial sense of the word.  The mortgage loan is owed to the bank.  It’s a liability in the financial sense.

At the same time, though, I can see the merit in Kiyosaki’s definitions, as they’re more practical.  The financial definitions deal with cash value, while Kiyosaki’s deal with cash flow.

In terms of cash flow, my mortgage is of course still a liability for me.  But, my house itself is also a liability.  Maintaining it, removing mold, keeping it warm, keeping it clean, keeping it looking pretty, keeping it dry, etc., take a lot of money.  A house deteriorates just like anything else if it’s left alone.

Going back to the financial definition for a second, I can rephrase this statement by saying that the value of my asset, my house, will go down if I don’t take care of it.  It costs me each month so that the value of the asset isn’t affected by my carelessness.

In the cash flow sense, the house would be an asset only if I were renting it out for more than it cost me to maintain it.  That is, only if it put money in my pocket.

I’m not sure that clears things up at all.  If anything, it makes things more confusing.  If so, then I’ve accomplished something.   Seriously, though, I do like Kiyosaki’s definitions because they bring the focus to the cash flow.  If you buy a boat, you have an asset, but while you own it it’s a huge liability — unless you get the credentials to boat people around for hire, in which case it becomes an asset.  Thinking about purchases this way brings the spotlight to the lifetime cost (or lifetime earning potential) of an item.  Maybe fewer people would buy boats if they knew that BOAT stands for “bring on another thousand.”

Anyway, what are your thoughts?

Source:
Asset or liability?