Robert Kiyosaki Blog

Financial Education Portal inspired by Robert Kiyosaki

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Cost and Budgeting

If I want to become rich, then I need to invest in assets that generate passive income. This is what I have learned from reading the Rich Dad’s series by Robert Kiyosaki. One such asset that can generate passive income is real estate. And anyone who can afford to invest real estate will likely to do so. And they will rent their properties out in hope of earning passive income. But a lot of time, they miss out quite a number of costs in their calculation to decide whether they can afford to invest in their properties. Let imagine that I decide to buy a property that is priced at $200,000 for investment. It does not simply mean that I will be paying $200,000. In fact, I will be paying much more than $200,000. To understand why, there is a need to know more about the type of costs involved. There are two kinds of costs to look out for when doing any investment, namely fixed and variable costs. Fixed cost means that the cost is fixed. It will not change. Variable cost means that the cost is not fixed and it changes with time. Also, cost can also be classified into one time cost or regular cost. One time cost is something that I need to pay once only. Regular cost is something that I need to pay at regular interval such as once a month. Fixed cost is usually one time cost. Regular cost is usually variable cost. If I buy a $200,000 property, I will need to pay legal fees to the lawyer to transact the purchase. This is an additional one time fixed cost on top of my purchase price. Another example of one time fixed cost will be the stamp duty fee. I will also need to pay an accountant to manage and file the income tax for my rental income. This is an additional regular variable cost on top of my purchase price. Another example of regular variable cost will be maintenance fee for my property. And there are hidden costs too! Hidden costs exist in any kind of investments or businesses. They do not just exist in real estate investment. I am simply using real estate as illustration on hidden costs. Thus, one should always on a look out for hidden costs in any kind of investments. For example, I need to manage and maintain my own property by investing my time. Thus, time is a hidden cost. Also, I will need to find a valuator to perform a valuation on my property before the bank will loan me the money. When...

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Robert Kiyosaki TV Show

Introducing the new Robert Kiyosaki Show, with Robert Kiyosaki and Rich Dad Advisors. In this episode, Robert discusses why investing is better than saving for your retirement. Also, special Guest Garrett Sutton, explains why owning your own home can be more risking then you think! Watch the Robert Kiyosaki TV Show!...

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Opportunities During Economy Recession

Well guys, I think we still got opportunities creating wealth during economy downturn. Here are some ideas. 1. Investing real estate. Buy foreclosed properties as the price is at the rock bottom. Having a house/apartment to stay is necessity, tenants (ex-house owners) still need a place to live after being foreclosed. There is still demand for renting property during recession. Robert G. Allen is expert in buying foreclosed properties, please read his famous book ‘Nothing Down’. 2. Buying a business. Slow down sales will hurt business. Find a good prospect business and strike at the right price. Sell off the business when the time is right. 3. Buying undervalue stocks. Find strong fundamental companies and buy their stocks if they are undervalued. Remember Warren Buffet’s advice, buy when people are scare enter the market, sell when people rushing to buy. 4. Buying unit trust/mutual fund. If the 10 years cycle assumption is correct, shares price will rise again. So buy now as almost all are in low price, they might be increase few years later. Advice from Robert Kiyosaki, investment by hoping for capital gain is risky. So, it’s up to you to decide. 5. Investing in precious metals. Precious metals like gold price tend to rise during recession. Same case might happen to current situation, but it is reverse currently due to banks and investors converting gold to USD. But still a lot of analysis suggested us to buy gold. 6. Buying devalued currencies. Currencies like AUD, NZD, SGD, IDR and ISK are dropping their value against USD. Some countries offering high interest rate, eg. Indonesia (10%), Australia (3.5%), Iceland (18%) and Sri Lanka (23%). You can have two types of profit: high interest rate return and potential of that currency to rise against USD. Some bankers offer facilities to deposit your saving into foreign currencies, check them out. 7. Obtain loan from low interest rate countries. Guess what you gonna do with this loan? Of course put into higher return places eg. blue chip stocks with high return or saving in other countries banks offering higher interest rate. Countries offering low interest rate so far are Japan and USA. You gonna have your stable passive income guys. 8. Buy tax lien certificate. You can buy this at most states of USA. I think the chances of house owner late paying tax are higher during recession. You may make a small fortune there. 9. Blogging. Since your workload is less during recession. Find some of free time to blog. You maybe rich because of this. Please helping mine too. 10. Offering loan to needy people. Setup business to...

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Investors need to overcome fear factor

Ever been on a roller coaster? It’s scary to even see it tumbling down from a height, scarier still to be in it. Most people scream, close their eyes tightly shut, with hands tightly clenched over the support beams till their knuckles are white. Some pray and even wonder at their own wisdom of taking a roller coaster ride. At the end of it, when it comes to a stop, most agree that it was one hell of an exhilarating ride that they had ever experienced. Similar is a stock market. In the middle of the ride, you’ll find lots of faces drained of their life blood—people who seem to be cursing their luck and the guy who had asked them to invest in the stock market. There are others who are throwing up, many who are crying and some who seem to be enjoying it. If you were to talk to such people from the investment community, you’ll know that they are worried about the turmoil, but have chosen to keep their faith in the markets. They are in it for the long-term. They have chosen investments carefully and are not bothered about the turmoil that is shaking the world at the very foundations. If there is one person who deserves a prize for sheer guts, it has to be American investor Warren Buffett. He has infused $5 billion into Goldman Sachs and another $3 billion to GE in the past 15 days. It’s not charity either. Buffett is acknowledged as one of the savviest investors of our time, maybe of all times. He sniffed out a fabulous bargain. He got preferred stock from these companies that pay him a dividend of 10%, with the option of investing in the common stock to the same extent, within five years at a predetermined price. It’s a win-win deal he has brokered for it is a vote of confidence on the company. Coming from Buffett, it’s like an investment grade rating or better than that as he is actually putting the money compared to rating agencies’ grades. That’s a good deal, isn’t it? Is there no risk at all here for Buffett? Of course, there is. These companies are still vulnerable. That is the reason they required the cash infusion in the first place. But with Buffett’s backing , they will have access to more funds and have a shot at becoming healthy again. The price that these companies paid was the fat dividend that they had to fork out—a small price to pay if the alternative was to go belly up. There are others who are scouring the wreckage...

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BMV ebook download

Graham Brown provides insight into how the recent developments in the US (the credit crunch) will affect the BMV industry and change the face of investing irrevocably. He also provides a roadmap for future investment. Download & share the Full BMV Ebook now (PDF) Originally posted here: BMV ebook...

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Economy rescue – Adding up the dollars

The  US government is engaged in an unprecedented – and expensive – effort to rescue the economy. Here are all the elements of the bailouts as of 2 Jan 2009 1Daily average 2Fed increased amount from $620 billion to an unlimited cap, spending unknown 3Includes $40 billion under TARP 4Part of Commercial Paper Funding Facility, not included in bailout total Sources: Federal Reserve, Treasury, FDIC Note: Figures as of Jan. 2, 2009 Continued here: Economy rescue – Adding up the...

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How much did Madoff scheme cost?

Madoff’s claim to have defrauded investors out of $50 billion may have been exaggerated, attorneys say, and it could take years to unravel the true cost. January 2, 2009 NEW YORK (CNN) — The Bernard Madoff scandal will certainly end up as the most expensive Ponzi scheme in U.S. history, but the $50 billion price tag claimed by the disgraced financier may end up as fictitious as the returns that he had promised investors. Madoff, charged in December with defrauding investors by as much as $50 billion, may have calculated the figure based on double-digit returns he had promised but never delivered. “Taking Bernard Madoff’s word for the total number is probably not an accurate way of accounting for the losses,” said Jonathan Levitt, an attorney representing individuals who lost money in the Madoff scandal. “I don’t think there’s any way to know the total amount yet,” said Greg Blue, an attorney with Morgenstern, Jacobs & Blue. “Everything we’ve heard is that his books and records are in disarray. There’s no official tally yet.” The task for investigators poring over Madoff’s muddled books is to figure out the scope of the losses. A Ponzi, or pyramid scheme, is an investment fraud in which high profits are promised to investors from fictitious sources. Early investors, and those who take early returns, are paid off with funds raised from later ones. Say an investor put $100,000 with Madoff in 1990 and saw that figure rise on paper to $1 million this year. Is the investor out his $100,000 principal or a total figure that never actually existed? For example, Yeshiva University announced this week that of its $110 million in Madoff investment losses, only $14 million came from principal. These questions are complicated distributions taken by many investors on their investments. For example, if an investor withdrew 10 percent per year in returns, and made back all his principal, could he be accused of profiting from the Madoff’s system of repaying old money with new, and subject to lawsuits from other defrauded investors? A further question that some may be asking would involve the “opportunity cost.” An investment placed with Madoff could have been made elsewhere and realized actual returns. A court-appointed trustee, Irving Picard of the law firm Baker and Hostetler, is currently working through Madoff’s investments for the eventual distribution to defrauded investors. Madoff complied with a court order to supply a list of his assets to the Securities and Exchange Commission by Dec. 31, 2008. Attorney Levitt said the process of untangling Madoff’s web of financial dealings could take years and a team of 500 accountants, lawyers and...

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The Rich Dad Difference Videos (#9 – #11)

Video #9 – Life’s 4 Quarters Video #10 – The CashFlow Game Video #11 – The Cone of Learning (Last...

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The Rich Dad Difference Videos (#5 – #8)

Video #5 – Bad Debt vs Good Debt Video #6 – Live Above Your Means Video #7 – 3 Types of Income Video #8 – Investing isn’t...

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The Rich Dad Difference Videos (#1 – #4)

Video #1 – 3 Types of education Video #2 – The Cashflow Quadrant Video #3 – Savers Are Losers Video #4 – Assets and...

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