President Barack Obama’s campaign theme was “Change.” We’ve all seen plenty of change in the past year, specifically economically and financially. Much of this change most people would label as negative. If you take into account the banking crisis, the growing numbers of people facing unemployment, the double-digit losses in so many 401(k)s and retirement plans, and the number of cities and states whose budgets are upside-down, then it does paint a pretty dismal picture.

And some—those hoping the government will save them or those who are not willing to change what isn’t working—will face a very rough road ahead. No doubt most of us will have to do many things differently, regarding our money, our investments and our businesses, in order to not only survive but to thrive in this economic climate.

That being said, and being the optimist that I am, I have to look and ask, “Where’s the upside in all of this?” And I do believe that there is not just one diamond in this rough, but there are three positive gems that could manifest out of this turmoil.

1) A Wake-up Call for the World Sometimes things have to get bad before we take action. This time in history could very well be our fi nancial and economic wake-up call. There are many pieces of this puzzle that are broken, and it will take more than a new president, new rules for Wall Street and a few crooks going to jail to fix it all.

This is undoubtedly a global problem, and it will take resources from around the world to turn this one around. I trust this is a wake-up call for our political, business and financial leaders that real and tough changes have to be made, now.

There is an even more important wake-up call for the individual, if you’re willing to tell yourself the truth. That wake-up call is this: You can no longer be clueless about your money. It is the realization that turning your money over to the so-called fi nancial experts isn’t working. It is the light bulb that goes off when you see you have an absolute need for real financial education. No more disguising a sales pitch for sound fi nancial advice. No more taking the advice from fi nancial advisors who don’t practice what they preach, who tell you what to do but don’t do it themselves. And no more allowing ourselves to be ignorant enough to blindly follow their recommendations.

Fortunately, the message is spreading. Peter Applebome, a talented journalist, recently wrote in an article for The New York Times titled, “Contemplating the Boobs We Were,” “…a yearend toast to us all—the boobs and easy marks who from time immemorial have mastered the art of buying high and selling low, investing in bubbles as transparent as an open window….”

He goes on to say, “…is there anything we can learn from this latest round of financial catastrophe?… So, here’s a revolutionary idea: Maybe it’s time we even start thinking about ways to teach [people about money].”

Applebome ends with this: “One lesson of this year is that these days, no one, not even the most fi nancially secure, can afford to be stupid.”

What a novel idea—teaching people about money. I’ll be that optimist who says that maybe this is the wake-up call to the masses really taking hold. Is the general public fi nally recognizing the vital need for true fi nancial education? That would be a breakthrough and a positive result from this economic breakdown.

Sometimes it takes a wake-up call to bring us to our senses. I optimistically trust that these cataclysmic events unfolding will serve as one giant wake-up call so that we as individuals become aware, educated and in control of our money. And in the bigger picture, that the same holds true for our cities, states and nations. Ignorance is not bliss; it’s foolish, expensive and painful.

2) Adversity as a Gift
Most of us are taught, beginning in kindergarten, that mistakes are bad. How often did you hear, “Don’t make a mistake!” In reality, the way we learn is by making mistakes. A mistake simply shows you something you didn’t know. Once you make the mistake, then you know it. Think about the fi rst time you touched a hot stove (the mistake). From making that mistake, you learned that if you touch a hot stove you get burned. A mistake isn’t bad; it’s there to teach you something.

In the economic times ahead, most people will encounter adversities at one point or another. Most people view adversity the same way they view mistakes: They see it as bad and something they want to avoid. It’s time for a new outlook.

Donald Trump gave me an insight about success that I will not forget. He said that the No. 1 key to being a successful entrepreneur or businessperson is how you respond to adversity. When faced with a hardship, do you crumble and quit, or do you stand up, take action and push through? When confronting a tough problem, do you take it on, learn from it and grow, or do you let the problem beat you down?

Adversity has the power to build your character and strengthen your spirit. It also has the power to weaken you and cause you to contract. It’s all a matter of how you react to the situation. I have faced many tough times in my life, and although it was hell at the time, I can honestly say that each time I pushed through it I became stronger, smarter, more confi dent and more successful. For me, adversity is a great teacher.

One of my all-time favorite books is As a Man Thinketh by James Allen, published in 1902. The message throughout the book is that your thoughts create your reality. It’s a very small and simple book. One of the most memorable lines in the book for me was this: Circumstance does not make the man; it reveals him to himself.

I interpret this to mean that how you handle the different situations in your life—good, bad and indifferent—determines the quality of your character. It reveals who you are.

So how you and I respond to these unfolding economic times will be very revealing and, ideally, enlightening.

3) Opportunity Comes Knocking
The third benefit this financial dilemma presents is the abundance of opportunities surfacing. The only question is, do you know what to look for to take advantage of them?

Real estate prices are coming down—opportunity. Business needs are changing—opportunity. Stock prices are correcting—opportunity. Innovation and creativity will rule— opportunity. Small business is growing—opportunity. Etc., etc., etc.

Are you focusing on the potential opportunities ahead, or are you cutting back, clipping coupons and reverting to survival mode? In my opinion, this is the best time to get educated and to start seeking out the opportunities—opportunities that not only allow you to survive, but to thrive and prosper in the years ahead.

As Charles Dickens wrote, “It was the best of times. It was the worst of times.”

May these be your best of times.

Kim Kiyosaki is co-founder of the Rich Dad Company, a speaker and best-selling author of Rich Woman.

Originally posted here:
The Upside of a Downturn

Watch the video interview and read the feature article in TIME Magazine as Robert answers “10 Questions” from readers.  From Conspiracy of The Rich to how to find a rich dad, Robert answers your toughest questions as only he can.

Originally posted here:
Robert Answers “10 Questions” on TIME.com

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…

In these difficult economic times, everyone is seeking a better way to manage their personal finances. And at a time when even the newly elected president can’t be separated from his wireless device, two undergraduates from Rensselaer Polytechnic Institute have developed an open source solution that combines smart personal financial management with your smartphone.

The computer science students, who are part of the Rensselaer Center for Open Software (RCOS), have developed an application for Apple Inc.’s popular iPhone that allows users to log, track, and manage their personal spending.

The application is called Vault, and it is available for free to anyone around the world seeking a better way to manage their money. The code used to develop the software is open source, which means that there are no restrictions on distribution or modification.

Developers Amit Kumar and Devin Ross, juniors majoring in computer science, describe the application as “Quicken for the iPhone.” It seeks to replace the check register at the front of personal checkbooks, a financial relic that students like Kumar and Ross have never even owned.

“People are always carrying their phone everywhere already,” Ross said. “We saw the potential to centralize a task that many people could use daily.”

The software has a place to add expenses in different categories. Some categories, such as groceries, are automatically programmed in the system, while other categories can be added by the user. The application then logs the transaction and modifies the user’s account balance. The application also uses GPS to locate the closest bank branch, and then allows users to directly link to their bank’s Web site or place a call to the bank.

According to Kumar and Ross, one of the main benefits of the system is that no personal account information needs to be logged into the application. This protects the user from identity theft if the phone is stolen.

“Creating this application gave us really direct work experience that most undergraduates don’t get,” Kumar said. “It was the first opportunity that we had to go beyond just learning how to create good code to learning how to create a great user interface and build the code around that.”

Vault is currently available for free download from the iTunes Store. The project source is located on http://code.google.com/p/rpiiphone/source/browse/ and the development blog can be found at http://rpiiphoneproject.wordpress.com/ .

Source: Rensselaer Polytechnic Institute

See original here:
Student open-source software brings personal finance to the iPhone