Robert Kiyosaki Blog

Financial Education Portal inspired by Robert Kiyosaki

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Integrity in the Workplace

Let me start off by saying I am “out of integrity.”  I am out of integrity with myself on too many occasions.  For example, I tell myself I will go to the gym today, and guess what?  The exercise to the refrigerator is a whole lot more enjoyable.  (However today I actually did make it to the gym!)   But I can tell you I had a task on my written to do list and I have not done it yet, I chose to write a blog post instead.  I’m supposed to call a client on their content and just don’t want to, it will require me to think about their content which I want to do but don’t want to actually have to think about it.  Now I know I can wait another day to do this but it just makes the flow of the project and the organization a little messier. My integrity in the workspace really has more to do with my personal integrity with self.  Because no-one knows about this other than me.  I do my best to follow through on my word all the time and every time weather it be personal or professional because I treat others differently than myself, I am kinder to them than to I.  I follow through with them than to I and I think you will hear that if you talk to friends and colleagues. But back to integrity in the work place.  It is these little types of things that break down communications, they then break down relationships both personal and professional.  A glaring example is Tiger Woods saying “I do,” but what he really did was something entirely different.  He was out of integtity with himself and his family and who knows who else.  How many times in the workplace have you had a boss or a client say I will call you tomorrow with the <fill in the blank> and the call never comes.  Guess what?  You are left hanging. There was probably some justification for not making the call but that person is out of integrity in the workplace as well as personally out of integrity.  S/he made a promise to call and did not follow through.  I can guarantee you that this happens ALL the time.  We tend to be blaze about it, and say “oh they are just that way.”  But at the end of the day weather it be a promise to your kid or a promise to your boss we get much better results in life by doing what we say and saying what we do. So I will make that...

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Skills You Need To Learn In Your Job

know most of us are working nowadays. Most of us start with the E-Employee Quadrant and the main source of our income are our jobs. Robert Kiyosaki suggested that if you are working, you need to be experienced in three essential skills to become financially free. These three skills are LEADERSHIP, MANAGEMENT and SALES AND MARKETING. Let’s discuss it one by one: Leadership: Leadership is one of the most critical skill that you need to learn in your job. Most businesses fail because of lack of good leadership. Leaders are instrumental to the success of a business. Every company is in search for the best CEO who will lead the business to success. One of the things that I learned is that the highest form of leadership is servanthood. We can distinguish a good leader vs. a bad leader: A good leader is the one who serves his people while a bad leader wants to be serve. A good leader is the one who empowers his people while a bad leader wants to have that power. A good leader wants his people to grow and become greater than him while a bad leader becomes insecure when someone grows because he always want to be the greatest one. Management: To become financially free, you also need to learn the skill of management. Management involves two things; management of cash flow and management of business systems. To manage a company’s cash flow properly, you have to know how to read financial statements. You need to take a deep thought on income statement. You have to analyze sales and accounts receivable and expenses and accounts payable. If you can learn to run a business on the basis of the numbers revealed on its financial statements, you’ll be positioning yourself for success. To manage business systems properly, you have to understand that a company is a complex network of interdependent systems, everything from product or service development to computer systems to human resources. For the business to grow, all systems have to operate with maximum efficiency—a leak in any single one can cause the entire ship to sink. Sales and Marketing: Sales and marketing is the last thing that you should need to learn in your job if you want to become financially free. To be good in sales and marketing, you have to learn how to communicate effectively. If you can’t speak or write well, you won’t convince people that your product or service is worth buying. Remember that you need to work to learn something and not just to earn. If you want to become financially free, these are the skills that you should learn from your job. Original...

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How Deep Must You Dig to Pay the Mortgage?

Jack M. Guttentag As the unemployment rate rises, more mortgage borrowers must choose between default and making the payment out of savings. That can be an agonizing decision. See the letter below: “I was laid off recently but am reasonably hopeful of finding another position soon… We have stayed current by drawing down our IRAs, but there is only about $4,000 left, enough to cover us for one more month…Our family is counseling us to keep the $4K left in our IRAs and not make the next monthly mortgage payments. Do you agree?” Not making the payment will hurt your credit, but if the choice is between missing the payment this month and missing it next month, I would miss it this month and keep the cash. I would only use the rest of your cash to make the payment if you manage to get a job before 30 days after the payment due date. In that event, you have a reasonable hope of being able to work your way out of the jam you are in, so using your remaining money to save your credit makes sense. This question is heavily value-laden, which is why I answered it in terms of what I would do, which is not necessarily what someone else with different values might elect to do. Some, especially investors, could take the position that a borrower is morally obliged to make the payment if there is any possible way to do it. This is a defensible argument, but it assumes that the borrower’s only duty is to the investor. The borrower in question has a family to consider as well. The issue of a borrower’s obligation to continue making payments out of savings after their income-generating capacity has been impaired arises in connection with the government’s Home Affordability Modification Program. See another letter from a reader: “I have applied to have my loan modified, and am in process of filling out the financial questionnaire that my servicer sent me. It asks for the amounts in my bank accounts. Although my income has dropped, I have enough money in the bank to cover the mortgage payment for three years. Should I take it out, and where should I put it?” To be eligible to have your payment reduced under this program, you must document not only that your income is insufficient to meet the payment but also that you do not have “sufficient liquid assets” to make the payment. I have scrutinized the specs for this program issued by Treasury, and could not find a definition of either “sufficient” or “liquid assets.” It is a thorny...

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Understanding Money

The Australian Government provides a money-management site that is useful to people around the world. Understanding Money encourages readers to adopt a three-point approach to their finances: Prepare a budget plan – work out how much you earn and what you spend it on, to help you see where you could make changes. Set some financial goals – they don’t have to be big, but they’ll help you see what you could gain by being better with your money. Get into the savings habit – once you’ve set some goals, try to save regularly and as much as you can to meet your goals. Understanding Money includes a free, downloadable budget planner in Excel format; a financial health check with links to financial literacy resources; and a free, downloadable money handbook in PDF format. Though some of the details (such as the types of retirement programs) are Australia-specific, the concepts are applicable to anyone, anywhere. View post:Understanding...

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Rent Out Your Home. Cut Your Taxes.

Cherie Kerr wants out of her home. The 65-year-old comedian and public speaking coach paid $590,000 for a 1,150-square-foot Los Angeles condo two and a half years ago–only to find the construction so flimsy that her upstairs neighbor woke her up by dropping a coin on the wooden floor. “A defect hell,” fumes Kerr of her newly built abode. She has moved back into a suburban home she still owns and would love to unload the apartment, but housing values have fallen so far that she figures such a move would lock in a $200,000 loss. The good news is that Kerr is anything but stuck. A real estate agent recently informed her that the condo can fetch $3,300 a month in rent. That’s enough to cover her mortgage and property taxes. So Kerr has decided to lease out her condo until values rebound. While she no longer harbors visions of becoming rich off the downtown L.A. property, things could be a lot worse. “It’ll be a tax writeoff,” she says. Kerr has lots of company these days. No less a financier (and former do-it-yourself tax preparer) than Treasury Secretary Timothy Geithner is leasing out his Mamaroneck, N.Y. home after failing to get for it a bid he was willing to accept. If you’re one of the horde suffering real estate buyer’s remorse, you too may be able to turn a modest profit renting out your albatross of a residence. How can that be? Thank the trove of tax breaks for residential landlords. The first step in figuring out whether renting makes sense is to find out how much your place is worth. A professional appraisal is best, but written statements from a few Realtors will do as long as they agree on the value and stipulate how much is attributable to land and how much to the building. (The appraisal, as you’ll see later, is essential for two separate tax calculations.) The next step is to see how much the property will fetch in monthly rent and weigh that against the costs and tax consequences. As a landlord, you can’t claim mortgage interest as an itemized deduction on Schedule A of your tax return. Instead, you deduct interest costs, plus property taxes, monthly condo fees, insurance and anything you pay to a property manager (most charge 10% of rent) against rental income on Schedule E. You can also expense travel and other costs you personally incur to look after the property. The other big tax deduction for landlords is depreciation. The tax code allows you to divide the value of your building (but not the land) by 27.5...

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3 Free Financial-Planning Tools

These new interactive Web sites give you advice — some better than others — to help you reach goals. Online financial-planning tools are getting more personal. Plenty of Web sites crank out cookie-cutter plans, but three recent entrants give users more detailed advice. Voyant, SimpliFi and ESPlannerBasic provide something more than a quick-and-dirty look at your financial state of affairs — for free. These three sites cannot replace the personalized service of a financial planner, but they are helpful to most investors. You can use them to get a general idea of your finances and benchmark your progress without shelling out thousands of dollars for a session with an adviser. Those who use an adviser can treat the sites as a way to double-check their adviser’s plans. Voyant Pros: Voyant is the best of the bunch. Its slick interface lets you map your financial goals, such as buying a home or saving for your kids’ college, along an interactive timeline. It takes less than five minutes to enter the information needed to create a graphic display of your expected income and retirement savings. You can test what-if scenarios quickly without entering much new information. For example, you can easily adjust the growth-rate assumptions of your investment portfolio with a sliding bar on the right side of the planning tool. Most calculators make you plug in a different rate each time you want to test a new scenario. Voyant also supplies a menu of events, such as starting a business or having a child, to see how those decisions will affect your finances. Cons: But some of Voyant’s premade options are a little too cute. For instance, you click on an icon of a sports car to “plan” a midlife crisis. (If you could prepare for such a scenario, it wouldn’t be a crisis.) No Web site would be complete nowadays without an attempt at social networking — in this case, a feeble one. Voyant lets you communicate with other users on the site’s forums. A button on the tool lets you contact financial advisers who use Voyant’s planning software. (The site is still struggling to sign up advisers. When I pushed the button, I was told “financial professionals” in my area — Washington D.C. — were not available for an online chat.) Simplifi Pros: As the name suggests, SimpliFi is not complicated. The site does a decent job at the broad strokes of financial planning. Spend a couple of minutes entering your data and you get a snapshot of how your goals match up with your savings and investments. An animated guide named Sophie grades your financial well-being from...

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Top two fears for people wanting to become entrepreneurs

In a survey I conducted of 200 individuals, who stated they wanted to make the transition from corporate to business owner, the top two things they indicated stopped them were: Inability to replace current income Not having a stable income What can you do to counter these top two fears? How can you make it possible to have a stable income that replaces your current corporate salary? Below are the four areas to focus on in order to set these fears aside: What do you really want to do with your income: replace, upgrade or down grade? There are many people who would be content earning less if it meant they could do what they loved. Others may want to keep their current level of income or even gain more. Getting specific with what you truly want and need is essential to be able to create your customized financial plan. Based on what you want to do, how much money can you make? This includes considering tax breaks that may yield you more income than you thought. Even if you can generate enough money to give you what you need, I highly suggest you find other ways to supplement your income. There are many ways of increasing your income streams, the key here is to increase your financial IQ and then find the investment(s) that will work for you. Put together your personal financial plan. Consider things like the consistency of your business and make sure that you are accounting for any fluctuation. What are your short and long term expenses? Talk to someone who’s got a similar business to determine what these might be for you. Once you’ve got this figured out it will help you see what changes need to be made to your business plan in order to pay yourself the salary you desire while investing in your business. This is also an area that supplemental income streams can come in handy. Invest in your nest egg. As your business grows, and other income streams grow, the more money you can put away as a nest egg and the more income you can be generating. The number one piece of advice the most successful entrepreneurs suggest, think Donald Trump, Sir Richard Branson and Robert Kiyosaki, make your money work for you. Build up your nest egg and then have it work for you by providing you the passive income you need to live. The financial fears you may have now, will dissipate once you develop and execute on a plan to create the income you need. The important thing is to think through what you really...

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Ask the Dolans: Tips for unemployed seniors

According to the Labor Department, the June unemployment rate for those 55 and older hit 7%–the highest on record. That’s bad news for seniors who are out of work or being forced to re-enter the work force to make ends meet. The Dolans have some job hunting tips for the 55+ crowd, including good news about some advantages you may have over the younger competition. Dear Ken and Daria: Thanks to the investment losses I’ve suffered, I have to come out of retirement and go back to work. Do you have some job hunting tips for seniors? –Maureen See the original post: Ask the Dolans: Tips for unemployed...

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Developing Wealth Creation Skills

Wealth creation is probably a new term for most people. It is hard enough to create something useful for ourselves. Yet, do people really think that creating wealth is possible? As we can see, in today’s educational system it is rare for universities to teach wealth creation even in business schools. Thus, it might as well be an abstract idea as world peace. However, inspirational giants and self-made millionaires like Robert Kiyosaki, Tony Robbins and Jamie McIntyre are people who have perfected wealth creation skills. As the term implies, skill is an action to produce tangible results. One cannot say that he has the skill to do something if he cannot demonstrate it. Thus, developing wealth creation skills is not only a tangible part of reality, but also something that people can develop and enhance. Following a path towards developing wealth creation skills will definitely help you achieve financial freedom. Do not Sell Yourself Short The first step in developing your wealth creation skills is acknowledging your value.  Having the self-confidence to move forward with your strengths will allow you to be valuable to other people. When this happens, do not undervalue yourself. When you undervalue yourself you project an image where people can manipulate you. Feeling that you do not get equal value for your work is the biggest individual letdown. In order to develop your wealth creation skills, you must design your launch pad to success by feeling good with your work. By pushing yourself to live up to your perceived value, you also give yourself the incentive to become a better person and raise your value even higher. Then you can become a critical creator of your wealth. Millionaires are not cheap Most successful people will tell you that success comes with a price. Sometimes the price tag for success is something that we can afford. However, we still don’t have the will to spend it anyway. Self-made millionaire’s spends on things that they can’t afford because they know that they can be better off with it. Remember that the world millionaire and cheap will not come together. If you want to be a millionaire someday, start getting rid of the word cheap. Remember that every benefit always comes with a cost. Go for things that you feel will benefit you the most and be daring enough to supply the necessary effort for it. Finding your craft – then get paid for it People find confidence if they do what they really love doing. However, people tend to leave the things that they love in order to work hard for money. When this happens, one finds...

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Living beyond means

Recently released numbers from the U.S. Bureau of Economic Analysis show that the US once again has an increasing personal savings rate. Unfortunately, this rate has been declining for decades as Americans began living increasingly beyond their means. On more than one occasion the savings rate even dipped into negative territory, meaning that America’s population in aggregate was borrowing more than it was saving. This high consumption rate in turn has led to excessive borrowing, which was the ultimate cause of the financial crisis that occurred last year. Generation Y, my generation, seems to have particular difficulty saving money. First off, we’re still relatively young, and young people in general are less inclined to think long term. However, young adults today are worse than previous generations in that they see disposable income and no need to save a portion. This inability to save is partially the fault of parents. Many simply never taught their kids to save. Mine was the generation of the allowance. Parents thought they were teaching us a lesson and that by giving us a defined amount for any given period, we would learn to budget. Instead, kids got their allowance and viewed every cent as spending money. To people who never think about the benefits of saving, allow me to introduce the 8th Wonder of the World: Compound Interest. Consider the following examples: 1. Let’s say that at age 25 a person had accumulated $10,000 to invest. If they can earn, say 10% per year for round numbers, on average, how much will he have at age 60, assuming he never contributes another dollar? 2. What if that same person waited until age 30? How much would they have at 60 then? 3. And if they waited until age 35, what’s there at 60? The answers can be found at the end of the blog. Keep in mind that those results reflect growth with no additional savings. To see even more phenomenal results, consider the following: 4. Let’s say I have a friend who’s 25 years old and has little or no savings to date. Realizing the predicament he may face in the future, he has decided to adjust his spending habits to start saving $100 per week. While this is no large sum, let’s say he continues this pattern of saving for the next 35 years. Assuming 52 weeks per year and an average annual return of 10%, how much will my friend have when he’s 60? The real concept here is to let your money work for you. For continued reading on the subject, we strongly recommend Rich Dad, Poor Dad by Robert...

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