Robert Kiyosaki Blog

Financial Education Portal inspired by Robert Kiyosaki

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What you don?t know can hurt your kids

~ by Pocahontas ~ I’m a teacher by trade…so let’s take it back to school for a second, ladies, shall we? Raise your hand if you were ever told any of these things growing up: “Get a good education and a college degree.” “Work hard and move up the ladder.” “Save your money in the bank because investing is too risky.” “Get a good job with benefits and a pension.” Now do any of you whose hands are up know people have done all these things but are still struggling financially? Here’s a better question…do you think this is what the Rockerfellers or the Rothschilds are teaching their children?  Since my sistahs are without question some of the most astute women in the world, obviously you can surmise the answer to that is a resounding, “No”. Granted we all believe in the value of a first-rate education, but just because you have X many degrees and/or letters after your name does that really guarantee your financial success? As I said, my sistahs today are savvy enough to recognize that the wealthy are giving their kids something most people are not…and that is the “REAL” keys to financial freedom (after all, aren’t “they” the ones able to play golf at 9 am on weekdays while the rest of us grit our teeth through rush hour to go to a J-O-B? Clearly, they know something many of us do not).   So what IS it that they teach their kids? They tell them to own their own business so they can be in total control of their time and their income. Easier said than done, you think? Well, ask yourself this, “Can you honestly say you’d want your little one to grown up and do the job you’re currently doing?” Actually, do you own your job to be able to pass it down to your kids even if you wanted to after your retire from it like you could a business? Truth be told, most people would rather be the boss than answer to one, but they just have no clue how to make that happen. So allow me to share a few books with you that might give your “entrepreneurial spirit” a prick. First, you may want to invest in “Rich Dad, Poor Dad” and “Cashflow Quadrant” both by Robert Kiyosaki. The former will certainly change your life and the latter will definitely shed some light on the common mistake novice entrepreneurs make in distinguishing between self-employed and business owner. One book I will highly recommend for your children if they are in middle or high school and you want to...

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Tips to a successful and wealthy life

We all want to have enough money to be happy from today until the day we leave this earth.  Enough, is a carefully used word. For some people, enough is the amount of money it takes to just have what is needed, for others it means being wealthy and making a LOT of money. In order to move from making money to wealthy, you will need to change your perception of life. These tips to a successful life of making money and becoming wealthy will surely help. Your mind and your money. It is important to think about money in a more organic way if you are going to become wealthy. Money will have to be something you save and not something you spend. Being thrifty today can save that wealth for the long run. The Smaller the Better.  Aiming at the smallest of savings and adding up those amounts over time can be the best choice for a person wanting to be wealthy. Those smalls savings will add up over the years and as long as they are left untouched they will grow to be the wealth you desire. The freedom of saving. All it takes to be freedom from the financial burdens of life is saving. Saving is what people who are wealthy essentially do. So the next time you drop $20.00 on coffee or $40.00 on lunch, remember that the money you save today will buy your financial freedom tomorrow. You are the one. The only person that can be held accountable for your financial placement in life is YOU! You are the one that needs to make making and save money, no one else. Think stock. The next time you want to buy that new product on the market, stop and think stock. The product will, more than likely, be something you will not use in 10 years, but a stock in the mother company will still be growing. Look to the champs. The people who have already traveled the path from making money to becoming wealthy are the best ones to learn from. When finding a mentor, make sure to look beyond the glitz and glamor of celebrity life and focus on the real people of the world. If your goal in life is to become wealthy, you can achieve that goal. All it takes is time, saving, investing, learning and more saving. Then, if you have a little more time lying around, you can save a little more. About the Author: The author, Elliott Roberts, is a writer at Becomng, a Personal Development blog, covering topics ranging from Productivity to Goal Setting, plus...

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Financial retirement plans: figured out sooner is better

~ By Lindley Press ~~ Are those “golden years” approaching, and if so, have you thought about your financial retirement plans? Robert Kiyosaki, world-famous author and financial advisor, said before you retire, if you want sell your home and move to greener pastures, you have to balance your books first. “Retirees are on fixed incomes , let’s say it’s $1,000 a month, last year in 2007. The value of a dollar dropped 15 percent last year and it was even more this year,” said Kiyosaki. “So that means that your $1,000 a month last year is now only worth $850 and this year it may go down to $600 a month.” According to Kiyosaki, if you follow a few simple rules, you will really be protecting yourself for the long haul. “It really becomes important to be able to differentiate good financial advice from bad financial advice.  Do you know what’s going to work for you and not work for you?” said Kiyosaki. “I think the biggest mistake is “Well, I’ve been with the same financial planner for 20 years,” and I say, ˜Well are you rich?” and they say ˜no.” Well, maybe you should change.” Consumer Reports recently found out what their retired readers wished they had done differently, so yet-to-be-retired readers could avoid similar mistakes. While 93 percent of their readers were satisfied with how they had prepared themselves, those who had some regrets said they wished they had saved more. Getting ready for retirement Are those “golden years” approaching, and if so, have you thought about your financial retirement plans? “Never count on your pension being enough, even a federal pension or a government pension,” said one retiree. Those with many years until retirement said they know this has to be a priority. Many others said they wished they had started saving younger, and that’s the advice they would give to others. “The more financial education you have, the better you’ll be able to tell is this advice good for me or bad for me. Does this advisor know what they’re talking about or not know what they’re talking about,” said...

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What is Gearing?

Borrowing money to invest in shares is commonly referred to as ‘gearing’. Read on for a short guide to gearing, the pros and cons of borrowing to invest, and where you can find more information on borrowing to invest in shares. What is gearing? Investing in the stock market can be a great way to make money, period. However, not everyone has the capital they need to get started straight away, so more and more people are borrowing money from lenders to invest. Gearing has the potential to increase profits with your money as you have more to invest with, but it can also increase losses. The other type of gearing (with the aforementioned gearing being positive gearing) is negative gearing, which occurs when you borrow to invest in an income producing asset but the cost of borrowing is greater than the returns you receive from this particular asset. On a property, for example, negative gearing takes place if the interest you need to pay on the loan is bigger than the rental income you get from the property once other things such as maintenance are figured in. Advantages of gearing: increasing profits There are two oft-cited principal advantages of borrowing to invest: Increasing your profits – if the shares you buy with the money you borrow increase in value, you win when you sell on the shares. There is also the potential for dividends and bonus shares made by the company in question. Tax benefits of negative gearing – If the money you are making on your investment is working out to be less than the cost of borrowing in the first place, you are eligible for a tax deduction on the difference between the amounts. What are the risks of gearing? Interest rates, financial loss and fees The market changes a lot – conditions may change, and rising interest rates may mean you struggle to meet loan repayments, especially if you over-extend benefits. You may rely on the income the investment produces, before experiencing a period where there is no income. Your loss can be multiplied. There may be fees or penalties if paying the loan off earlier than planned. Assets simply may not provide the returns you hoped for. You may have to pay a ‘margin call’ if the value of your investment falls below the level that covers the lender’s loan. In short, a bad investment means little or no returns and a big debt that needs paying off too, so good financial advice is crucial. Originally posted here: What is...

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Types of Investment Risks

No investment is risk-free. Some investment risks may be particular to the investment itself or to the particular asset class. Others may be much broader, for example relating to the country of investment or the economy in general. Economic risk (also known as systemic risk): Risk inherent in the economy as a whole. In the event of an economic recession, the stock market, the interest rate market and the exchange rate market may all be adversely affected. Economic risk can arise due to recession, failure in prudential regulation or faults in the financial system. Economic risk affects the entire market. Market risk (also known as unsystemic risk): Risk of volatility in a market or market sector. The “tech boom” and subsequent “tech wreck” in the United States in the late 1990s was an example of the risk of a particular market sector.  Market risk doesn’t affect the entire market. Inflation risk: Risk that inflation will adversely affect the performance of your investment. Interest rate risk: Risk that the value of an investment will change due to a change in interest rates. Changes in interest rates directly affect the value of interest rate securities, such as bonds. Interest rates also have an indirect effect on other investments, such as property and shares. Exchange rate risk: Risk of fluctuations in exchange rates adversely affecting the value of an investment. A good way to diversify your investment portfolio is to invest overseas, but changes in the exchange rate of the Australian dollar against the currency of the country you invest in can affect the return of your investment. Liquidity risk: Risk that an investment can’t be easily and quickly converted into cash (bought or sold) at a fair price. Credit risk (also known as counterparty risk): Risk that the counterparty to a contract will not live up to its contractual obligations. Political risk (also known as geopolitical risk): Risk that a government will unexpectedly change its policies or implement new regulations, making an investment less attractive. Political risk can also refer to the uncertainty associated with investing in countries with a political climate less stable than our own. Sovereign risk: Risk that a central bank will alter its foreign exchange regulations and reduce or null the value of foreign exchange contracts. Country risk: Risk that a country won’t be able to meet its financial commitments. Company risk: Risk that the company you invest in fails and goes out of business. Institutional risk (also known as operational risk): Risk of insufficient internal controls, failures in risk management systems, insufficient capital to absorb unanticipated losses, or inadequate governance structures. Institutional risk also refers to...

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What Robert Kiyosaki had to say on Fox News

Recently, Robert Kiyosaki appeared on Fox News to promote his newest book, Increase Your Financial IQ. On Your World with Neil Cavuto, Robert talked about how his earlier predictions have come true and discussed the current real estate market, including explaining how he chooses where to invest.  His real estate investments follow the job market;  in other words, he buys properties where the job market is strong because workers need places to live.  He said: “We don’t have a real estate crisis, we’re having a financing crisis.” At the end of the interview, Neil Cavuto said: “Robert Kiyosaki – he has been right every step of the way.” When Robert appeared on Fox Business Network’s Happy Hour, he repeated that this is a great time to look for investment bargains. But, he cautioned, you need to be smart about it. “Financial intelligence is your greatest asset,” he said.  “Invest in your intelligence first before you go buy a stock or bond or gold or silver.” He was critical of financial “gurus” who tell people to cut up their credit cards. He pointed out that you need credit cards to function in today’s economy to rent a car, check into a hotel, purchase merchandise online, and so on. The key is to use credit cards responsibly. When people get into financial problems because of credit cards, the fault is not the credit cards, but the person using them. Read more here: What Robert Kiyosaki had to say on Fox...

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What are your motives for demanding money?

The increased easy access to credit in the commercial banks, mortgage institutions, and stock market and pension institutions in Nigeria promises enhanced growth for the economy. This is because consumer demand in a country drives economic growth. Effective demand they say is only possible when there is the ability to pay for the goods or services desired. Since demand can only be effective with money, it is therefore no surprise that as the economy begins to record modest growth, the demand for money is increasing at the national and personal levels. Money is therefore a tool for demand in the hands of all economic agents, be it households, companies or the government. Everybody including the wealthy people keeps seeking for more money to finance one form of expenditure or the other. With the budget of Nigeria increasing every year, proposed to be N2.7 trillion in 2008, it is evident that even the country is spending more money every year. Facts indicate that different individuals and governments have different motive for demanding and spending more money. Motives for demanding money are said by economists to be varied from transactional to precautionary to speculative. All three motives involve spending, but the type of demand expenditure makes the difference especially as it concerns wealth creation or capital accumulation. The expenditure on investment also known as the speculative demand for money usually brings in returns for the expender and it is usually from accumulated savings because, such expenditures involves large amounts that may not be easily accessible by a single individual except by means of borrowing. Companies expend in overhead costs, which complements their productive activities and therefore serves as an indirect investment while governments also spend on capital and recurrent fundamentals. The lifestyle of most people however prompts them to spend more money on food, more recharge cards reported to be high in Nigeria, education (children and wards), health care, transportation (fuel), health care, flamboyant weddings and parties amongst others. Tony Adache, a civil servant, spoke on the motive of his demand for money, to him money is for spending and spending is part of life; no human can live without spending on food, transportation, shelter, and so many other things. According to him, one is either spending or another person is spending on one. On whether he saves for investment purposes, he categorically said that he would only save after meeting his needs and those of his family and that his income is not even enough for his needs talk more of investing. Chuks Azu, a trader, said he does save for investing, but that most times one need or the other comes...

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Can?t save? Blame your brain

~ By Jason Zweig (Money Magazine) — Slow and steady wins the race, but a bird in the hand is worth two in the bush. Those dueling proverbs sum up the investing mind. When you imagine choosing between making a quick buck or growing rich later, you know the right answer: Be patient and hold out for the bigger gain. But as soon as you face a real rather than an imaginary choice, the fast money seems irresistible. New discoveries in neuroscience labs are helping to explain why it’s so hard to resist the allure of instant gratification. It turns out that your brain is much more aroused by $1 today than by $1 tomorrow. And $1 six months from now barely registers. Only the promise of a much bigger reward later can fire up your brain the way an immediate score does. No wonder it’s hard to save instead of spend and, when you do save, to think long term; the average holding period for a stock, among individual and professional investors alike, is just over 11 months. And the temptation to buy dotcom stocks in 1999, energy stocks in 2005, real estate in 2006, emerging markets in 2007 or gold right now — what’s hot when it’s hot — is overpowering for many people, no matter how often they’ve been burned before. A sip now or a slurp later? Recent experiments conducted independently by three teams of researchers at leading universities have focused on the battle in the brain between now and later. Tracking people’s choices and their brain activity, one group tested whether college kids would rather have a sip of fruit juice soon or a slurp later. They also tracked how folks decided between Amazon.com gift certificates redeemable the same day for a small amount and those redeemable up to four weeks later for a larger amount. A second team offered people the choice between $20 immediately and an array of alternatives ranging from $20.25 six hours later to $110 six months later. And a third group measured how individuals responded to the choice between various dollar amounts today and an extra 5 percent to 30 percent up to six months later. “When our emotions are charged, we have a hard time waiting for a reward,” says Carnegie Mellon University’s George Loewenstein, one of the first study’s authors. Even the chance of getting a slightly bigger reward tomorrow doesn’t have the same stimulating effect on your brain as a gain today does. It’s all downhill from there. A gain the day after tomorrow carries even less of an emotional kick, and so on. In fact,...

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Review of Robert Kiyosaki?s latest book

MillionDollarJourney.com has this to say about Robert Kiyosaki’s latest book:  For those of you who aren’t familiar with the Rich Dad series, it’s a financial education series which teaches you how to THINK like the rich, but it’s a little light on specific details on how to actually make extra money. Rich Dad’s Increase Your Financial IQ is no different.  The premise behind the book is about financial IQ and how to be like the rich.  Robert Kiyosaki believes that the rich get richer while the poor get poorer because of the differences in their IQ.  No, not regular IQ, but financial IQ.  Who is Robert Kiyosaki?  I think the biggest claim to fame for Mr. Kiyosaki is that he is the author and creator of the Rich Dad franchise.  Along with being a successful author, he is also a real estate mogul owning millions of dollars in real estate assets. The Topics Covered? Financial IQ #1: Make More Money (the more the better) Financial IQ #2: Protecting your money (pay less taxes) Financial IQ #3: Budgeting your money (budget for surplus) Financial IQ #4: Leveraging your money (the higher you returns, the better) Financial IQ #5: Improving your financial information (problem solving is the key to wealth) What I liked about the book? In Financial IQ #1, the author explains why the rich are rich and why the middle class and poor stay that way.  Kiyosaki explains that the rich use their money to build assets which creates an ever building passive income stream (unlimited potential).  The middle class, on the other hand, use their limited TIME to bring home income.   In Financial IQ #3, Kiyosaki explains to budget for a surplus.  Basically, this means to put your savings as a FIRST priority before everything else.  What he believes that if you are short on money to pay the bills after savings, you’ll need to go out and make more money. In Financial IQ #4, Kiyosaki explains that if you have control of your leveraged asset, then there is no risk involved.  That’s why he invests most of his money in real estate and very little in the stock market. Maybe there is a lot of truth in the old saying “invest in what you know”. I enjoyed the Financial IQ #5 chapter which explained the different parts of the brain and how each part affects decision making.  Kiyosaki emphasizes that the best way to learn is through “doing” and “making mistakes”.  I agree with this point as I have the tendency to get “analysis paralysis”.  What I didn’t like? Throughout the book, Kiyosaki has the message of NOT...

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Financial Learning Curve: Overcoming Frustration

The first step to taking control of and improving our finances is education. For many people, this involves suddenly paying attention to a subject which they perceive as boring, foreign and possibly intimidating. Most people begin by trying to wade through the financial section of the daily paper and/or going to the library and taking out books on finances. While this ‘plunge in’ approach to learning can be a great way to start, because it is so intense it can often be daunting, and cause people to feel overwhelmed and give up. Fear not, as these feelings are normal, and things actually WILL get better and more clear. In fact, the more you learn about the financial world, the more FUN you will have dealing with your finances. As with anything you feel you are good at, what now seems like a chore will become a pleasure, especially as you begin to see the results of your efforts. Below are some of the more common feelings which accompany a woman/person starting out on the journey to financial knowledge and empowerment. Read them and take heart knowing that you are not alone; far from it. Many women have blazed this path before you, and many more are travelling it along with you, feeling the same frustrations and overcoming similar challenges. Embarassment/intimidation: ‘I don’t know much about finances, but I don’t want anyone else to know.’ We pretend we know and we don’t ask questions. After all, it’s easier to be ignorant with no one knowing (maybe they’ll think we know) than to admit we don’t have the answers. We may not even have the brightest of questions. SO WHAT? Asking questions is how we learn, and life is short. If we always take the long way in our learning – struggling through books and articles full of terms we don’t understand – then it will take us far longer than necessary. A few questions asked can make a huge difference in your understanding. Swallow your pride and remember that you’re doing this for YOURSELF. Your financial freedom awaits, and the fastest way to get there is to learn faster and put your money to work sooner. No other person’s opinion is more important than that. Frustration/demotivation: You are extremely motivated to improve your financial future and you dive right in. You read the financials every day and they begin to seem somewhat familiar. Somewhere along the line, you begin to care less, to let things slide. You skip a day or two, and you begin to ask yourself why you’re really bothering anyway – can this really make that much...

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