This may be a simple question for you to answer but it’s one that’s plagued me ever since I got married 22 years ago.

The real difficulty answering this question came to light when my daughter and I bought tickets to see the Dodgers who will beat the Marlins this coming Saturday .  We aren’t big baseball fans….we don’t really care who wins…..but we have  fun when we go out to a game.  Usually, that’s only once a year at most.

This ticket purchase expedition confirmed that either my memory is fading or ticket prices have skyrocketed.  I was shocked at how high the prices were for decent seats.

In any event, when my daughter and I were looking for seats and she saw how high the prices were, she asked me if we could afford it.

I must tell you that I was very happy that she even thought of asking this question. I was relieved knowing that I had raised, in effect, a ‘frugal Frankle”!  A “Mini Me” if you will…..

But I digress…..

Truth be told, when my little darlin’ asked me this question, I really didn’t know how to anwer her.

I explained that we had enough money to buy tickets to the game even though they were expensive – $65 each.  I explained that we had money to send her to college and we had the money for my wife and youngest daughter  to visit family overseas.

But I went on to say that just because we had the money to do it, didn’t mean we could afford it.

It was at this point that my daughter started rolling her eyes – wishing she were back home watching re-runs of “Law and Order”.

Right or wrong, I saw this as a teachable moment so I forged ahead.

I told her the amount of money we need to save in order for my wife and I to retire someday.  I told her how far along the path we were and what we needed to save each year in order to reach those goals. Given the recent drop in the market and how that’s impacted everyone’s income and savings…..my wife and I will both be working for quite a few years to come.

So when she asked “can we afford those tickets” the answer seemed complicated to me.

We had the cash to buy the tickets – we wouldn’t go in debt in order to see the Dodgers trounce their Floridian foes.

But could we afford to spend $130 (plus parking and refreshments) for one night on entertainment?  Is it the best use of that money?  Wouldn’t it be better to use that money towards our bigger goals?

It’s a tough question to answer.  I’ve always focused on security – for my family and my clients.  I refuse to ignore the future and just “live for today” financially.  But I am trying hard not to be a slave to the future at the expense of  not being present and failing to enjoy life right now.

At that point, I think my daughter wanted to change the subject.  She told me she needed to go shopping for clothes.  I ignored the hint, tagged along and continued our discussion.

I asked her how she decides if she can afford something or not. She told me how simple that question was to answer.

If she had the money in her pocket – she could afford it. If not, she couldn’t.

I was starting to squirm a little at that point but fortunately, she redeemed herself by continuing.  She told me that if she has $30, she has to decide which was more important; two lunches out with friends or a nice outfit.  (A born economist. Milton Freedman would be proud.)

I explained that her process was approriate for her but not for me or her mother.  We have to think about the best use of the money and hope we make the right decision.

And that is the rub.  That is the juncture where the emotions fly.  The guilt.  The fear.  The shame.
When someone asks me if we can afford something……they might think the question is ” do we have money “.  The answer could be yes.  But I might be thinking the real question is ”do we have a budget for this”.  Unless we agree on our terms, we’re in trouble.
If I say, “no, we can’t afford this because we don’t have a budget for it” and my family sees that we have the money,dad comes out looking like a tight wad.  Then, dad defends himself, emotions start flying and it’s down hill from there.

The solution is to explain the difference between having the cash to do something and having the budget to do it. I never would have even thought about this subtle difference unless my daughter explained what she meant by being able to afford something.

I guess I should go shopping with her more often.

Excerpted from:
Can We Afford It?

We all need to have mentors if we have to reach some goals. Mentors are there to guide us along the way. They have achieved success in their endeavors and so they can teach us the do’s and don’ts that we should accomplish in order to mimic their success.

Now that you’ve chosen your business, it’s time to choose your business mentors and your team. If you were planning to climb Mount Everest next year, wouldn’t you want to speak with someone who had survived the journey to the top? You’d be surprised how many people, starting to climb up their own financial mountains, ask the advice of people who are languishing below sea level. It doesn’t occur to these climbers that their advisors have little or no firsthand experience.

Kiyosaki said that the world is full of S- Self Employed quadrant types trying to tell others how to enter the B or I quadrant. Seek out a mentor who “walks the talk”—someone who has already achieved what you would like to achieve. For instance, you would not want someone who achieved his or her success in real estate to necessarily become your mentor for building a business to sell car supplies.

As you begin, you’ll also need a team of business mentors and advisors. You should not risk the ordeals of building or investing in businesses without the expert help of others.

Rich Dad Tip:

“You don’t need to know every answer, but you do need to know who to call for the answer.”

Find a Business Mentor

Amateurs might not have mentors, but professionals do. One of the most important steps you can take upon entering the B- Big Business Owner quadrant is to set aside any discomfort you might have about asking for help. Seek out role models and learn from them.

Fishing for prospects isn’t all that difficult. It’s a matter of swallowing your pride, working up your courage, and approaching people. Business people are busy but they are generally willing to share their success stories. Many talented folks in the B and I quadrants are willing to lend a helping hand. You can find them out through the following avenues:

• Successful business people that you know. They may know someone who has succeeded in the business you have chosen and be willing to introduce you.
• Your local civic and volunteer organizations. Join several organizations and you will meet others who may have experienced success in the very business you are starting.
• Your local newspaper and local TV news station. Start by looking for successful people in your own backyard. Which of them do you admire and would you like to approach?
• Your local chamber of commerce. Your chamber of commerce and other local business organizations sponsor classes, seminars, and social events for you to meet potential mentors.
• The business department of a community college near you. Community colleges often offer mentoring programs in association with local businesses.

Perhaps the easiest way to convince someone to mentor you is the direct approach. Don’t hesitate to call or write. Be polite. State clearly what you want and why you’ve thought of this person. You may be surprised at the response. Chances are your candidate mentor will be flattered by your interest and, like most people, will enjoy talking about what he or she knows best. You might suggest having lunch together. If this pans out, go prepared, and pay the bill. You’re conducting an interview of sorts. Do what the professionals do and write your questions out beforehand.

Once you’ve found a business mentor. . .
You probably won’t get all the information you need after a single meeting. What you want to do is establish an ongoing relationship. You want a business mentor who will teach you everything, then be available for support once you’re on your own. The problem is, what’s in it for the mentor? Why should this person bother to take you under his or her wing? While it may be true that at this time your resources are limited, that doesn’t mean you have nothing to offer.

Rich Dad Tip:

“What are you willing to give in exchange for receiving guidance? Your relationship with your mentor is based on the simple concept of exchange.”

Find out what your mentor needs. Fortunately for you, it’s unlikely to be money, since this person is already financially successful. Feel out your mentor. In exchange for information and training, offer whatever you can in the way of help. The possibilities are endless, and of course depend on the nature of the business and your own field of expertise.

More:
How to Find Business Mentors

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• KIYOSAKI MENTOR

Have you realized that NOW is a GREAT time to invest in real estate, but you just don’t have the money to do it? Here are several ways you can generate cash for your next investment to make sure you can cash on the great opportunity that this market is providing.

One big Detroit Area investor, Darrick Scruggs, the owner of My First Michigan Homeand many other companies, said, “Most of your problems will disappear if you become world-class at raising money.”

Most people will read this and think that I am stating the obvious. Many of these same people will say that they don’t have any money. If they had money, they say, THEY would be raking in millions, too.

I’m here to tell you that you NEED money, but nobody said it had to be your own. I know! Many of us have heard that, too. So how do you use “other people’s” money?

Besides using your own cash, have you considered….

1. Make Money as a Middleman: You can wholesale properties until you get enough cash to do bigger, more profitable deals.

2. Borrow from a Lending Institution: Today this is not always so easy, but can be done, still. Use the money for your investments. Don’t get distracted using that borrowed money for other things.

3. Refinance Your Home: You can (a) get more money to invest, or (b) use the reduced monthly payment to make it easier to create a positive monthly cash flow from the property or other investment that you will buy.

4. Use Credit Cards: Obviously, you have to be careful with this since most credit cards charge a high interest rate. However, if you can make a quick $20,000 profit within six (6) months, would you be willing to pay around $4,000 in interest payments? (This figure comes form borrowing $30,000 @ 30% for 6 months. Most people can get better terms on their credit cards than this.)

5. Obtain a Second Mortgage: Tap into your home equity, and use that money for a killer investment.

6. Borrow from Your Retirement (401K, 403b, Roth, SEP, etc.) Account: You can use this as collateral for a loan and use this money for investments.

7. Solicit Other Active Investors: These people are always looking for ways either to have their money work for them harder or make good money without them having to do any work.

8. Use Money from Passive Investors: How many people do you know complain about their 401K shrinking? They have less control over the bigwigs at the companies overseeing mutual funds than they do you. If you know how to make them money and can show them how you are going to make them money, many of these people will feel safer investing with you. Many of these people would be delighted if you could promise them a return of 8% – 10%.

9. Team with Other Investors: Sometimes, there will be a project where you have some expertise but missing another piece of it. Other times, you might have the idea but not the money or vice versa. Find a another person who has your “missing piece.”

10. Friends and Family: This is a possible source, but be careful with this one! Really!!!

11. Borrow from a Hard Money Lender: This is similar to a credit card, but while they are expensive, they often are cheaper than a credit card; however, the repayment terms are usually shorter. This is suggested more for quick turning than it is for rentals. You can use their money to gain quick chunks of money for only a small price compared to your quick profit.

12. Buy on Land Contract: Usually the price will be higher, but you do not have to use as much of your own money. Run the numbers to make sure it works for you, but several investors got started this way.

Use these techniques responsibly. These are great ideas, but if they are used improperly, you can create some tough situations for yourself. Do your due diligence on the investment opportunity. Make sure that you have a backup plan in case your main plan backfires. These are the two (2) most common investing mistakes.

Make sure that you have a plan and that you thoroughly thought out that plan. You do not want to make a habit of using borrowed money just to lose it. We all make mistakes, but make sure you do your due diligence to reduce your chance of making them. Calculate your risk.

No matter your investment, remember this! NEVER “invest” more than you can afford to lose. That’s called GAMBLING on the Hope-n-Pray method. Save this for your fun money. Feel free to ask me more questions about that.

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Robert Kiyosaki is an investor, author, and motivational speaker.  You probably have heard of his Rich Dad Poor Dad books.

Here are some of my favorite Robert Kiyosaki quotes:

• Your business revolves around your asset column, as opposed to your income column. The rich focus on their asset columns while the poor and middle class focus on their income columns
• Remember to dream big, think long-term, underachieve on a daily basis, and take baby steps.  That is the key to long-term success
• You need to understand the difference between an asset and a liability. An asset puts money in your pocket and a liability takes money from your pocket. The rich understand the difference and buy assets, not liabilities
• Your future is created by what you do today, not tomorrow
  The size of your success is measured by the strength of your desire; the size of your dream; and how you handle disappointment along the way
• Your mentors in life are important, so choose them wisely
  The only difference between a rich person and poor person is how they use their time
• Academic qualifications are important and so is financial education. They’re both important and schools are forgetting one of them
• The poor, the unsuccessful, the unhappy, the unhealthy are the ones who use the word tomorrow the most

• Most people never get wealthy simply because they are not trained financially to recognize opportunities right in front of them. The rich have learned to recognize opportunities as well as how to create them
• The rich invent money
• Tomorrows only exist in the minds of dreamers and losers
• Inside of every problem lies an opportunity
• Remember, your mind is your greatest asset, so be careful what you put into it
• Face your fears and doubts, and new worlds will open to you
• If you want to go somewhere, it is best to find someone who has already been there
• Today is the word for winners and tomorrow is the word for losers
• When people are lame, they love to blame
• He said, ‘Raise your price. Make it ridiculous. ‘That would make people perceive it as a value
• Great opportunities are not seen with your eyes. They are seen with your mind
• The poor and middle class work for money. The rich have money work for them
• You have to be smart. The easy days are over

 The last one is my favorite of this batch of quotes.

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Words of Wisdom: Robert Kiyosaki