Robert Kiyosaki Blog

Financial Education Portal inspired by Robert Kiyosaki


Three Scenarios for the Economy’s Path

There is no doubt where the economy is now. “By any measure, this downturn represents by far the deepest global recession since the Great Depression,” the International Monetary Fund declared. But there’s more than the usual uncertainty about where it is going. The key is the U.S. Even though its slice of the world economy is smaller than it once was, it’s still huge. The U.S. led the world into the abyss, and it will lead the world economy out of it. But how fast and when? The alphabet can help to imagine the possibilities and the path of the economy. There’s the letter V: the kind of quick rebound that usually follows a deep recession. Or U: a longer recession and slow recovery. There is L: years of painfully slow growth. And W: a temporary upturn as the economy feels the jolt of fiscal stimulus that quickly wears off. Finally, there’s the big D, not the shape but another Great Depression. With history a guide, consider three starkly different scenarios. The V The late Victor Zarnowitz, a student of the business cycle, had a rule: “Deep recessions are almost always followed by steep recoveries.” The mild recession of the early 1990s and early 2000s were followed by mild recoveries. But the U.S. economy grew faster than a 6% pace in the four quarters after the deep 1973-75 recession and faster than a 7.75% pace after the even deeper 1980-82 downturn. “In deep recessions,” says Michael Mussa of the Peterson Institute for International Economics, “there is usually a growing sense of gloom as the recession deepens.” Then the forces that triggered recession — say, plunging home prices — abate. The adrenaline of tax cuts and government spending kicks in. With inventories so lean, the slightest uptick in demand prompts a sharp increase in production, and the natural dynamism of capitalism reasserts itself. “Experience suggests all of this should work, and I believe it will,” Mr. Mussa predicts. Governments have administered huge doses of fiscal and monetary stimulus. Home-building and car-buying are so low they can’t fall much further. Many consumers shy away from buying because they’re frightened, not broke, and that state of mind can change quickly and liberate pent-up demand. But the Federal Reserve caused the deep recessions of the 1970s and 1980s when it put its foot on the brake to stop inflation; it ended them when it let up. This time, Fed has its foot to the floor and the economy is still slowing. And so much stock-market and housing wealth has evaporated that a quick turn in consumer spirits seems unlikely. Plus, the repair of...

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Why the Cheap Will Never Get Rich

~ Robert Kiyosaki The other day a friend of mine approached me excitedly, saying, “I found the house of my dreams. It’s in foreclosure and the bank will sell it to me for a great price.” “How good is the price?” I asked.  “Just before the real estate market crashed, the seller was asking $780,000 for the property. Today, I can buy it from the bank for $215,000. What do you think?” she asked. “How would I know?” I replied. “All you’ve given me is the price.” “Yes!” she squealed. “Now my husband and I can afford it.” “Only cheap people buy on price,” I replied. “Just because something is cheap doesn’t mean it’s worth the cost.” I then explained to her one of my most basic money principles: I buy value. I will pay more for value. If I don’t like the price, I simply pass. If the seller wants to sell, he will come back with a better price. I let him tell me what he will accept. I know some people love to haggle; personally, I don’t. If a person wants to sell, they will sell. If I feel what I am buying is of value, I’ll pay the price. Value rather than price has made me rich. Against my advice, my friend sought financing for her “dream” home. Fortunately, the bank turned her down. The house was on a busy street in a deteriorating neighborhood. The high school four blocks away was one of the most dangerous schools in the city. Her son and daughter would either have to go to private school or take karate lessons. She is now looking for a cheaper house to buy and has asked her father, who is retired, for help with the down payment. If her past is a crystal ball to her future, she will likely always be cheap and poor, even though she is a good, kind, educated, hard-working person. My Point of View What follows are some thoughts on why my friend will probably never get ahead financially — especially in this market. 1. She and her husband have college degrees but zero financial education. Even worse, neither plans to attend any investment classes. Choosing to remain financially uneducated has caused them to miss out on the greatest bull and bear markets in history. As my rich dad often said, “What you don’t know keeps you poor.” 2. She is too emotional. In the world of money and investing, you must learn to control your emotions. When you think about it, three of our biggest financial decisions in life are made at times of peak emotional...

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Never a bad time to invest in gold

Gold’s popularity over the centuries has endured wars, plagues, civil unrest and all sorts of other perils. But would gold prices hold up well in a prolonged deflationary spell? For the first time in several decades, we’re starting to find out. With the economy shrinking sharply over the past two quarters, inflation pressures have faded. The U.S. Consumer Price Index has dropped in four of the past six months, and the inflation rate for 2008, at 0.1 percent, was the lowest reading since 1954. Gold prices also have retreated, slumping from a 2008 peak of $1,011 an ounce to a current price of about $915. “Gold is unusual in that it’s an asset that likes inflation,” Natalie Dempster, head of North American investments for the World Gold Council, an industry group, said during a recent stop in Phoenix. Even so, gold has bounced back from a low near $700 an ounce in November. The metal has held up better than many other commodities amid the deflation headwinds. Demand for gold isn’t just a function of inflation and deflation, of course. More than anything, gold is used in jewelry, with 68 percent of the metal destined for this use, Dempster said. Industrial uses such as electronics take an additional 19 percent, leaving a fairly small remaining slice for coins, bars and the like. Much of the demand, especially from places such as India and China, isn’t directly tied to U.S. consumer-price levels. The supply side of the equation, meanwhile, is affected by mining activity and new discoveries, of which there haven’t been many lately. “Mine production has been in a downtrend since 2001,” Dempster said. Supplies also are influenced by the amount of gold recycled as people sell jewelry to raise cash. “A fair amount of scrap has been coming back onto the market,” she said. With the economy showing signs of life, some observers think we may be near a crossroads where inflation picks up. Diversification suggested Russell Biehl, a chartered financial analyst at Classic Investment Management in Scottsdale, sees higher inflation ahead as the economy works through its rough patch and government spending kicks in. He suggests investors diversify a slice of their holdings into inflation-sensitive assets, including gold. “Eventually, the Federal Reserve will gain traction (in inflating the economy) with all the money they’re printing,” he said. Jay R. Penney, a chartered financial analyst in Scottsdale, also sees an investment role for gold. ‘A compelling story’ “As a dollar hedge, it is a compelling story for a portion of a portfolio,” he said. “I do expect inflation to rise, and dramatically so in the future, if things...

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4 Last-Ditch Strategies If You Just Can’t Find a Job

With a record-high number of Americans collecting unemployment benefits, job seekers are being forced into heated competition for openings. Indeed, the number of people who have been unemployed for 27 weeks or longer has leapt to 3.2 million from 1.3 million at the start of the recession. The pressure is proving too much for some: Last month there were nearly 700,000 Americans that the Labor Department counted as discouraged workers–folks who have given up on looking for work because they don’t believe they’ll find it. If you are unemployed and you think you’ve tried everything–sent hundreds of resumes and gone to numerous networking events, talked to every person you know and lots of people you didn’t know. If you’ve worked on improving your resume, and cleaning up your cover letter — and you still haven’t been able to find work, then don’t count yourself out. You still may have some options. Here are some alternatives for the beleaguered job hunter: Start your own business. Economic downturns and lousy job markets can prompt some workers toward entrepreneurship. Tight credit is a hallmark of this downturn, however, so capital-intensive businesses will be more difficult to launch. Good news for the jobless: Some states offer help for the unemployed to become entrepreneurs. Residents of states including Maine, New Jersey, and Pennsylvania, may be able to enroll in their state’s self-employment assistance program. To qualify, you’ll need to be eligible for unemployment benefits, and you’ll likely need to meet a couple of additional criteria, such as being likely to exhaust your benefits. You’ll also need a viable business plan. These programs pay out the same amount of money as you would have received through traditional unemployment, but generally also provide help in developing a business plan and financial assistance for training courses. One note: A program may require that enrollees be collecting unemployment for a limited period of time. Pennsylvania limits it to those who have been receiving benefits for no more than 10 weeks. Do an unpaid internship. Most adults shake their heads at this option because they can’t afford to work for free. But if you’re already unemployed and your days are taken up with job searching, an internship can take up some of those hours without derailing your job applications. Katy Piotrowski, author of The Career Coward’s Guide to Career Advancement, recommends doing an internship at a smaller business that may be glad for your help. Approach the company with an offer to work a specific number of hours each week and arrange to split your time doing work that uses skills you already have–to their benefit–and work that trains...

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Robert Kiyosaki on Network Marketing

From : YouTube :: Tag // homebusinessAuthor: MarkGallowayNetwork Keywords: Robert Kiyosaki network marketing law of attraction business building entrepreneur lifepath Added: May 6, 2009 Go here to see the original: Robert Kiyosaki on Network...

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Big Lessons from the Big Three

~Robert Kiyosaki The other day, my wife and I were shopping for a new car. We stopped by the Cadillac dealership because we wanted to see the new Escalade Hybrid. The lot was filled with new cars. There were at least 10 salespeople ready to help us, but there were only two customers: us. I felt bad for those salespeople and the staff. I wish I could say we purchased a new car, but we didn’t. Many people blame the automakers for the problems that they are facing–and they are to blame, but not completely. As entrepreneurs, we can all learn at least three big lessons from the auto industry mess: Leaders should be on the same compensation plan as the sales staff. If Detroit’s leaders were paid only for the number of cars sold, they might be better businesspeople. Instead, the leaders have megasalaries, private jets, midweek golf outings and benefits suited for royalty–all unrelated to sales or company health. These corporate leaders have been stealing from the company, workers and investors who gave them so much. To be a great entrepreneur, be a leader who works for those who work for you. As the head of my company, I work for my customers and my workers. If my company is not profitable, I should not get paid.  Leaders listen to the customer. Never forget: It was the customer that wanted the big SUVs and trucks. An entrepreneur needs to have a crystal ball and prepare for changes in the customer before the customer changes. As my company’s leader, I have been preparing for this economic downturn for years. As some of you know, I have spoken out against the financial planning industry, mutual funds and the financial gurus who recommend them. Instead, I have been an advocate of personal financial education and have built my company around it. Today, my company’s sales have increased as more and more people realize that a well-diversified portfolio of mutual funds is not a safe investment and investing in a financial education might offer a better return. Politicians reward incompetence. Many of the politicians the Big Three automakers were begging for money are the very politicians who protected the inefficient industry. It was the politicians who protected the unions and high wages. Most entrepreneurs do not have the benefits of high-paid lobbyists and friends in high places. I realize President Obama promises change. But never forget: He is a politician, not an entrepreneur. Getting elected takes more than just money. That is why entrepreneurs need to watch what politicians do–more than what they say. Big Lessons from the Big...

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Quickplan D.I.Y

Quickplan D.I.Y, a free on-line business plan course, is launched. It brings the tools, support and knowledge needed to design and launch new businesses. When used by existing firms, it will provide new insights. “Everybody needs a new set of skills,” says Peter Mehit, co-founder. “The changes to our economy will be structural. It’s critical that people learn how to evaluate a business idea and then launch and run it, because the world is going to look very different a few years from now.” The company believes that acquiring these business skills is a prerequisite for prosperity in the new reality. The course contains eight instructional videos, a MS Word business plan template and a MS Excel financial model template, available at the company’s web site. The program is also offered on DVD at a nominal charge for those living in low bandwidth areas, having limited computer access or who just want to have the program in video format. The program, which has been taught to hundreds of students, business owners and entreprenuers, takes users through how to figure out if a business idea will be profitable, the reasons for a business plan, building pro forma cash flow models, doing market research and pulling the written narrative together. The company also offers support for the D.I.Y. course as well as guided development courses. “Whether the program is used to write a complete business plan or not, the fundamentals discussed are important for anyone that needs to create their livelihood,” says Mehit. “I heard someone say ‘this is bad as it’s going to be’. The fact is, nobody knows what’s next. You have to become your own rainmaker” For more information about Quickplan D.I.Y., visit Source:Quickplan...

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Raise Your Income Using Robert Kiyosaki’s Formula of Investing With Controls

First, think like an investor, not an accountant or an attorney. That simply means seeing the true value of something rather than just considering the original price. If you can see what someone else can’t — like how existing zoning will limit or expand what can be done with acreage – you can identify low or no risk investments. Also, you must have an entrepreneurial spirit and a love for that lifestyle. Investing isn’t for those with a “saver’s” mentality as making money and attaining wealth are about mind control — how you view an opportunity and what you are willing to spend in order to step up the value are key. So says Robert Kiyosaki, author of The New York Times best seller Rich Dad, Poor Dad. He explains that the more you invest with control, the more profits go up and risk goes down. In large part, this is a matter of ownership and power over outcome, something you can’t get by participating in a mutual fund or buying stocks and bonds. Six Critical Controls According to Kiyosaki there are six critical controls to help you manage your financial statement for an investment; they are: • income • expenses • assets • liabilities • financial training or management • insurance Financial Training Although listed as number five, the most important of these is financial training as without it you can’t control the other five elements. Unfortunately, this is not something we learn at school but, luckily, in today’s global and web-based world there are many options for gaining the learning you need to become an expert at investing with control. Controlling Income With respect to the other critical areas Kiyosaki identified, controlling income is about making sure there is some and that you have a say on how much that will be. Think about owning rental properties where you can set the monthly fees versus opening a savings account where the bank controls how much interest you’ll receive. Controlling Expenses With expenses, the old adage is definitely true; you often have to spend money to make money. The point is to do it as necessary and wisely, whether it’s upgrading rental property by painting the apartments or increasing the advertising budget to see more of a product you make. Controlling Assets To do this, you need to be able to shift the gears in your head so that you’re seeing all the possibilities for making money and measuring them against expenses. Kiyosaki again uses real estate as an example: consider a piece of land that could be used for varied purposes, some at no additional cost. However,...

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See Robert Kiyosaki Live

From : recent posts tagged financial – (beta) See Robert Kiyosaki Live Robert reveals new and not yet published ideas for financial success and learn the real secrets from the master. Original post: See Robert Kiyosaki...

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Staying Aware Of Finances Is Vital For Recent College Graduates Entering The Workforce

With all that’s going on in the economy nowadays, many new graduates are finding that the current state of the financial markets is one more challenge they have to face coming out of school. Staying on top of your finances is key to getting ahead, regardless of the economy. That’s why budgeting is so important. Here are some tips for creating and maintaining a hassle-free budget that enables you to easily manage your dough. Make a budget. While following a budget after school sounds like more work, it’s vital to ensure that you stay on track of finances after college. With loans to pay and probably not much income coming in, a budget gives you a good idea of where you stand. Even if you scratch down your monthly bills and expenditures on a piece of paper, you’ll still see where you need to put your money and where you can cut back spending. Many recent college graduates are intimidated by making a budget—the truth is that you don’t have to keep track of everything using the latest financial software…something simple will do. Review your budget regularly. The budget won’t work unless you repeatedly review it. For example, if you’re not making your minimum credit card payment month after month, there’s a problem and you’ll need to see where you can take money from to make the payment. Looking at the budget helps you remember where funds need to be allocated so you don’t wind up doing something like getting extra money one month and blowing it all on something frivolous because you think you have “extra” spending cash. Even if you’re a savvy spender, knowing what your expenses are will help you be more aware of your financial status. Adjust your budget as necessary. The great thing about a budget is that it can be amended. For example, if you’re just out of school, you may not be paying off student loans for the first six months. But when that payment is added to your expenditures, it can hurt! So you’ll need to constantly re-evaluate where money is coming and going. Think of your budget as a living document—you have the power to revise it at any time and doing so can keep you on top of finances. You’re in control of your financial future when you take time to become aware of it. Integrate your budget into your long-term goals. There will come a time when you’re not just getting by and you’ll want to think about what you want out of things on a long-term basis. If you’re planning on getting a promotion next year, don’t...

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