Robert Kiyosaki Blog

Financial Education Portal inspired by Robert Kiyosaki


Robert T. Kiyosaki – Why Invest In Oil ?

Rich Dad , Robert T.Kiyosaki latest video about why we should invest commodities such as oil, gold, silver and other precious resources. Here in this video, Robert talks more on the reason why invest in oil as a long term financial success and how you can do it too in support with Rich Dad advisor , Tom Wheelright. Feel free to share the information worldwide and let them be educate by the financial education from Rich...

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Robert Kiyosaki – 4 Reasons Why I Don’t Use A Mortgage Broker

I can see the benefits of using a mortgage broker; buying a home is stressful enough without having to worry about visiting multiple lenders and trying to understand the different rates, terms and conditions of your mortgage. If the mortgage broker is doing their job, they will find you the best rate and terms according to your needs. That all sounds pretty good, so why aren’t more people using a mortgage broker when they buy a house?  Let me share 4 reasons why I don’t use a mortgage broker, and probably never will: 1. They Push the 5-Year Fixed Rate Most of the mortgage broker ads I’ve seen claim you will save money using their services because they can locate the lowest 5-year fixed rates in the market.  The problem is, home owners would have been better off opting for the variable rate instead of the 5-year fixed rate nearly 90 percent of the time. Using a mortgage broker to obtain the lowest 5-year fixed rate likely ensures that you will be worse off financially in 5 years while your broker and your lender make money. 2. I Had a Good Relationship With My Bank Even though I recently became fed up with my full service bank and switched to no fee banking, I actually had a pretty good relationship with my bank.  Walking into my branch and asking about mortgage rates was not an intimidating process for me as a first-time home buyer. Now that I’ve moved into my 3rd home and gone through several mortgage renewals and a mortgage refinancing I’ve received plenty of perks for staying with one lender, including waiving home appraisal fees and interest penalties.  And my variable interest rate mortgage has always been within 0.10% of the best available rate in the market. 3. Bad Reputation My first impression of a mortgage broker was not at all positive.  They send out flyer’s in the mail encouraging people to refinance and use the money to take a vacation, buy a new car, or increase their amortization and consolidate debt.  They post rates on their website claiming their mortgage rates are more than 2.00% lower than the big 5 bank rates, even though they are clearly displaying the banks’ posted rates and not the best available rate online. Mortgage brokers are also quick to spread fear over pending interest rate hikes while strongly encouraging home owners that they need to “lock-in” now.  Much like mutual fund sales people, mortgage brokers get paid (or get paid more) if you buy a particular product.  Yes, their services are free to you, but you need to understand how they are being compensated for your business. 4. Do It...

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Robert Kiyosaki – How To Lower Your Monthly Student Loan Payments

Imagine having over six figures in student loan debt, making less than $ 30,000 a year and supporting a spouse who is also in school.  The monthly payments alone could be well over $ 1,000 a month.  This was the case for a couple that I recently helped.  The good news is that they were able to cut their payments in half after I explained how income based repayment worked.  Unfortunately, they were struggling for months financially and thought that it was impossible to lower their student loan payments. According to a 2012 study by, 1.5% of all undergraduate and graduate students finished school with over six-figures of student loans.  The majority of students with high loan balances were graduate and professional students; yet, undergraduates still represented a slim portion of the statistic at 0.2% Before you stop making payments on your student loans and severely damage your credit score, consider applying for the Income Based Repayment (IBR) program. What is Income Based Repayment? Income Based Repayment is a way for you to manage your federal student loans by lowering the amount you pay each month.  In short, the IBR program extends your federal student loan from the typical 10-year repayment term to a 25-year repayment term.  Yes, a longer term means that you’ll end up paying more interest in the long run, but the program is based on income.  It’s designed to make your student loan payment more manageable during your lower income years and to increase the payments as you earn more. How Does IBR Work? For most eligible borrowers, the IBR loan payments will be less than 10% of your income.  The chart below shows how it considers family size and income when calculating eligibility.  A family of four making $ 60,000 would only have to pay 6.4% of their income towards their federal student loans.  If you earn below 150% of poverty level, your required loan payment would be $ 0. The IBR has an interesting feature called the 25-year loan forgiveness period.  If, after making qualified IBR payments for 25 years, you still have a balance on your federal student loans, they may be eligible for forgiveness.  Yes, the government will forgive your federal student loans, but in order to qualify, your income would need to remain below the limits for 25 years.  Reaching the 25-year loan forgiveness period shouldn’t be a goal since you would be better off trying to earn more and paying off your loans earlier. Loans Covered Under IBR Not every loan will be covered under the Income Based Repayment plan.  Only certain federal loans will qualify, so your private student loans are not...

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Robert Kiyosaki – 4 Hidden Costs When Buying And Selling Your House

After sellling our house last month we have been busy packing and getting ready to move.  Last week we met with our mortgage specialist and lawyer to finalize the sale of our house and finish the process of buying a house. As a careful money manager I was anxious to get all of the finances sorted out so that I could update our budget. Home buyers are advised to set aside 1 – 3% of the purchase price of their house for closing costs.  These fees are vaguely explained during the selling process, but it is helpful to ask questions so you fully understand how closing costs can impact your budget when buying and selling your house. Here’s a closer look at the 4 hidden costs of buying a house: Buying A House: Legal Fees and Disbursements You will need a lawyer to complete the purchase of your house.  Legal fees can vary but on average you should allow for $ 600 – $ 900 for legal fees and an additional $ 200 – $ 400 for disbursements, which include registering the mortgage, completing a tax certificate, and doing a title search on the property. Throw in the typical lawyer administrative fees for postage, faxing, photocopying and “file maintenance” and the costs quickly add up. Shop around for the best price.  Some law offices specialize in handling these mortgage disbursements and have cheaper rates.  Ask your bank or mortgage broker which law firm they recommend and then call at least 3 other lawyers for quotes. A few phone calls can save you hundreds of dollars.  I shopped around and ended up paying $ 810 for legal fees and disbursements when the next best quote was over $ 1000. 3 Month Interest Penalty Because we were in the middle of our 5-year closed term (variable interest rate) and since our new house won’t be ready until August 1st we have to pay a 3 month interest penalty to discharge our mortgage.  This interest penalty will cost us about $ 1,000 but our bank has promised to refund this amount when we apply for a mortgage on our new house in August. Even though we will have this amount refunded in a few months I am still including it as a hidden cost because we have to pay for it up front and if we moved our mortgage to another lender we would still incur the charges. If we were able to find an interest rate even 0.20% below what our bank is offering then we would have definitely considered paying the penalty, since we could make up those savings easily over the mortgage term. Property Tax...

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Robert Kiyosaki – Passive Income – Portfolio Investments

I am going to discuss the methods that you can earn a passive income here. I do not make any recommendations you should seek your own advice before investing from a professional. Passive Income – Bank Deposits Having your money in a bank and earning interest on it is one way of earning passive income. You are lending your money to the bank. Over the years interest rates have gone up and down depending on the current economy. I remember in the eighties in Australia you could earn double digits on your deposits. Those days are gone! I know there are countries in our current economy where the banks are paying zero interest. In Australia it is possible at the time of writing this to earn 5% on a bank deposit. People often felt safer having their money in the bank than choosing other methods of investment. That feeling of certainty was shattered with the Global Financial Crisis (GFC) and the collapse of some major institutions. Clearly even in Australia you need a lot of cash to earn a reasonable passive income at 5%. Passive Income – Stocks and Shares In Australia we tend to call stocks shares but for now I will refer to them as “stocks”. In more stable economic times it has been thought that if you held “blue chip” stocks you could not go wrong. This would be the most passive way you could earn an income from stocks. By holding the investment and receiving your dividends. There are more active ways people invest in stocks and there are many courses available to teach people various methods. If you are not a stock investor I recommend you only enter the market once you have done your research and taken professional advice. Stock markets go up and down and this means so does any money you put into the market. Passive Income – Mutual or Managed Funds In Australia we call Mutual Funds “Managed Funds”. I am not sure of the terminology in other countries but basically these are “collective investments”. There are mutual funds that invest into a specialized area and there are funds that have a spread of investments into various investment types. These investments are usually accessed through a financial planner. They can provide passive income and of course come with the same risks as the markets they invest into as we witnessed in the GFC. Passive Income – Portfolio Investments Conclusion For you to be able to live on a passive income choosing any of these methods mentioned here you must have capital. For the majority of people around the world this...

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Robert Kiyosaki – Common Stock vs Preferred Stock

A lot of people do not know that there is an upper class when it comes to stock. There are two basic classes of stock offered by companies. Common stock and preferred stock. They are also known as common shares and preferred shares. Common stock is the stock that is offered to most investors. It’s the stock that you see traded each day on the various exchanges. Preferred stock is sold directly to investors by the company but is then later traded on the secondary exchange like common stock. Preferred Stock VS. Common Stock So let’s take a look at the features and benefits of the two types of stock. Ownership: Common Stock As part owners, common stockholders benefit from the stock price increasing in value. Stockholders with preferred shares will not see the same profit potential that common shareholders will have. Priority of Payment: Preferred Stock The stockholders of preferred stock have a higher claim on the earnings than the holders of common stock. If the company declares bankruptcy the preferred stock holders will be paid before common stock holders. Dividend Payments: Preferred Stock The dividends paid on a preferred stock are guaranteed and paid at regular periods. These stock holders will get a dividend from the company before other stockholders. Voting Rights: Common Stock Preferred stockholders will not have the right to vote in the business. Common stockholders have the right to vote on the leadership team and usually one stock equals one vote. Price Fluctuations: Preferred Stock The characteristics of a preferred stock are somewhat similar to a bond. The price of preferred stock will fluctuate with interest rate levels. Preferred stock is considered less risky because the price will not fluctuate as much as the price of common stock. Convertibility: Preferred Stock There is even a type of preferred stock that can be changed into common stock. Convertible Preferred Stock allows the investor to change their preferred stock into common stock. Common stock cannot move up to the upper crust of preferred stock though, sorry. And the winner is….. PREFERRED STOCK! Wisdom of Rich...

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Robert Kiyosaki – 4 Financial Lessons We’ve Learned From Traveling

My wife and I have learned a lot while traveling (we are currently on an extended trip) and we’d like to share some tips to make your next vacation, no matter how long in duration, as financially viable as possible. 1) Have a plan While this may seem like common sense, many people that travel lack a plan. What do you want to do on the trip? Are there certain activities you’d like to do? What level of comfort would you like while traveling? The plan should be flexible, you want to enjoy yourself on vacation and be able to adjust accordingly. When you are armed with a good plan everything else will fall into place! For example: Number of people: 2 Destination: France Time of year: Summer Duration: 1 week (7 days) Activities: 2 Shopping for souvenirs/gifts: Yes 2) Make a Budget To be honest, I am not a fan of overly detailed budgets. I like to have some flexibility and not get caught up in the details. The way I usually like to do things is to take a time period of a few days, 1 week, a month, etc  and find the costs associated with what I’d like to do on the trip. This references tip #1, have a plan! I then use that period of time to come up with a budget number for the duration of the trip. Using the example above, flights will cost $ 2400, a hotel costs $ 170 per night, meals should be around $ 100 per day (lunch and dinner, hotels may include breakfast) and there are many day trips available that cost $ 200 for two people. Most people also buy some souvenirs or gifts for friends or family so be sure to factor that in as well. Trip cost: $ 4,520 + gifts Does this number fit into your budget? If it’s too high, you can adjust the areas above by choosing a closer destination, a different time of year, a cheaper hotel, eat at less expensive restaurants, do fewer activities or buy fewer gifts. 3) Write Down All Costs Even though you’ve come up with a rough budget, you need to stay on target. This is especially hard while traveling as we are in spending mode. Another drink from the bar? Of course! It’s raining out side, let’s order room service! Skydiving was great, lets go bungee jumping today! By writing down all your expenditures for each day you force yourself to acknowledge that you have parted ways with many of your hard earned dollars. Remember to write down all expenses even if they are a...

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Robert Kiyosaki – 7 Of The Most Awkward Money Moments

Personal finance is a touchy topic. Some people are comfortable discussing all things financial while others would rather avoid the topic altogether. So I wasn’t surprised to see that there was a survey about consumers’ most awkward money moments. commissioned the online survey of more than 2,000 U.S. adults, asking consumers what their most awkward money moment was. 1. Having a credit card declined – 41 percent More than two out of five respondents said that having a credit card declined was the most awkward money moment, and I have to agree. I’ve been in line at the grocery store with a full cart of bagged groceries and I’ve had the cashier tell me, “It’s been declined.” I immediately flushed and got flustered. How could my debit card be declined? I have cash in the account! It turned out that in this specific case, there was a problem with this merchant and the bank and running it as a debit instead of a credit fixed the issue. For those few minutes though, I was dealing with a bit of internalized panic. 2. Feeling pressured to donate to a charity – 34 percent Years ago I always felt awkward when presented with a charity donation request, but today this is less of an issue for me. It seems that everywhere I go there is a charity donation opportunity; at the drug store, the pet store, etc. I am now desensitized to the sting of saying, ‘No, I don’t want to donate.’ This doesn’t mean I don’t donate to charity; that’s definitely not the case. Instead of donating $ 1 here or $ 5 there, my family chooses several charitable organizations to support and we make a donation directly to the organization. 3. Saying no to giving money to a panhandler – 29 percent I haven’t ran into a panhandler, face-to-face, in years but I do see them at stoplights and along freeway exits here in the metro-Phoenix area. It is easier to avoid the situation while in my car, but I still feel weird that I don’t offer up a $ 1 or $ 2. I admit that I’m a bit jaded, though. When I was in my early 20s, I gave a guy $ 5 and he went into the convenience store and bought a few beers — while I was still there pumping my gas. 4. Feeling pressured to chip in on a group gift at work – 25 percent I haven’t worked in an office in more than a decade, but I can see the awkwardness of this situation, especially for those on a tight budget....

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Robert Kiyosaki – When To Hire A Personal Finance Coach

We’ve all been at that point in our lives where our finances just don’t seem to be working out, for whatever reason. Whether it is all about having to try and get out of a debt that you’ve created and set for yourself, or something more in line with dealing with issues related to poor credit or other problems, financial problems can take a toll on your life and greatly affect how you live and what you are able to do in the future and over time. But financial coaching is one significant and effective way that you can get out of these financial problems and issues (or stay out of them in the first place), while learning the tools and abilities needed to maintain and manage strong finances for the rest of your life. In fact, there are a few direct benefits to financial coaching that you can use and employ as you deal with a talented and experienced financial coach that will create a game plan for your needs. Learn the ins and outs of accounting Unfortunately, school just doesn’t teach basic home accounting and bookkeeping any more, and it’s a shame because a generation of people are likely in your shoes: good intentions, great ideas, hardworking, but with little recourse for how and why to balance budget and use their finances properly. A financial coach, though, can create all that learning and education you missed out on in a relatively short period of time, as they teach you about investing, savings, accounts, and other basic and complex ideas in a way that is designed specifically to meet your needs. Whether you’re in the market for a coach to help you with major purchases (more on that below), or you just need some advice when it comes to creating a plan to save money and move forward, financial coaches are there to help over time. Receive advice on major purchases and savings Thinking about buying a car or a house in the near future? Are you ready for the investment and commitment? And, most importantly, can your finances and savings handle an investment like that? Financial coaches work to advise you on major purchases, while helping to prepare your assets for whatever may come your way when it comes to financial futures and outlooks for your life. No matter the need itself, financial coaches are critical when it comes to figuring out whether or not you can make that big purchase in the first place, and if you can, how you can use that big purchase to your advantage as you seek to improve your own life...

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Robert Kiyosaki – 6 Ways To Finance Your Startup

If you just started a business, your chances of getting a loan from a bank are very slim. This is because you still represent a high risk for most financial institutions since your business has not yet generated any major revenue. Few institutions have a startup department and financing criteria are typically very strict. However depending on the industry, there are several other options available to you: Borrow money from friends or relatives: This is a very common way of funding startups. People you know may lend you money or invest in your company to encourage you and because they trust you. Plus, you can be flexible on the interest you will be paying back or the amount of equity you will grant in return. Make sure however that you formalize your agreements to limit future legal issues. Apply for a personal line of credit: Getting a personal loan or a line of credit from a bank will generally require you to provide collateral such as a property or cash. However it is a decent option if you are able to generate revenue shortly after you launch your company. Join accelerator programs or incubator events: Those programs gather several entrepreneurs with a common profile and are a good way to improve your product, meet future business partners and private investors. Crowdfunding: Crowdfunding is a collective effort from several individuals who donate funds to support a project, generally through the internet. This option allows you to evaluate the popularity of your business idea based on peoples’ interest to finance it. In several jurisdictions donors cannot actually get equity in exchange, but in the particular case of the United States, the Jumpstart Our Business Startups (JOBS) Act will soon allow businesses to be able to raise capital online with small investors. Microfinance: Some non-profit institutions specialize in services to empower small business owners in their community. If your business qualifies for these types of financing, you could receive a loan that could help you jump start your operations. Peer-to-peer lending: Websites like Prosper or Lendingclub are interesting ways to raise money. The concept is to bring lenders and borrowers together, in order for everyone to benefit from better interest rates. When you get approved for a personal loan, the underlying amount is being repackaged with other loans into fixed-income instruments called notes which are then classified by risk category. Borrowers then buy the notes, and you pay them a fixed amount of money until maturity. Wisdom of Rich...

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