Robert Kiyosaki Blog

Financial Education Portal inspired by Robert Kiyosaki

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Need vs. Power

We just got out of a meeting with Robert and Kim where I learned a valuable lesson. The relationship between a person’s need and their power. So, here is how I understand it: when your need is high, such as you are in a position where you need the money, or need the job, or need a favor, you power is, as a result, low. *Geek Alert* I kept thinking about the scene in Star Wars Episode IV where Luke has to sell his land speeder because he is about to leave the planet forever and head off to Alderan with Obi Won Kanobi.He is disappointed at the price his speeder demands due to the fact that a new model was just released. His power in the negotiation was very low because his need was very high. I have experienced the same thing, but on the other side of the deal. When I walk into a car dealership, I am constantly talking to myself, saying “You don’t really need this car. It is just fine if you leave here driving the same car you did when you came in.” When I am in that frame of mind, my power shoots through the roof! There is no pressure. The sales person has nothing on me because I am more than willing to walk away. When you are negotiating a sale, or attempting to recruit someone into your business, being a low need gives you all the power. Here is the original: Need vs. Power Share and...

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The #1 Skill of an Entrepreneur…
Jun12

The #1 Skill of an Entrepreneur…

… is the ability to sell. Watch as Robert speaks with Sara Nelson of Publishers Weekly about the importance of learning how to sell. He talks about how he does not consider himself an author, but an entrepreneur whose responsibility it is to sell his books. Excerpt from:The #1 Skill of an Entrepreneur… Share and...

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5 Best Ways To Earn Passive Income
Jun11

5 Best Ways To Earn Passive Income

1. High Dividend Stocks There are a lot of stocks that paying quarterly or yearly dividends. Over time, the power of compounding (with a little help from inflation) can substantially increase the value of your dividends. My mother bought the Indian subsidiary of Unilever (Ticker: UL) called Hindustan Lever about 20 years ago. She’s being reinvesting most of her dividends and today her annual dividends are larger than the value of the original stock purchase. American Capital Strategies (ticker: ACAS) has been growing its dividends approximately 10% every year. According to The Dividend Investor, If we invested $100,000 in ACAS on December 31, 1997 we would have bought 6906 shares. Your first quarterly check would have been $1,726.50 in March 1998. If you kept reinvesting the dividends though instead of spending them, your quarterly dividend payment would have risen to $17,095 by December 2007. For a period of 10 years, the quarterly dividend has increased by 300 %. If you reinvested it though, your quarterly dividend income would have increased by 890%. Yes, reinvesting the dividends in companies that have historically kept increasing their dividends is key. Even though you might get only 2.5% return today, eventually with the increase in stock price and rise in dividends, your annual return should be greater than 12%. This concept is very well explained in Prof. Jeremy Siegel’s excellent book, The Future for Investors, which I highly recommend. 2. Oil & Gas Royalties While there is a lot of fraud and speculation in direct oil drilling programs, they can be very, very lucrative for investors. Charlie Munger invested about a $1,000 in such an oil drilling program in the 60s and he’s estimated that its paid out over $500,000 in royalty payments since then. Apparently it still pays out $2,000 a month. Of course, most people NEVER see these sort of returns, but for the average person, investing in Canadian Oil & Gas Royalty Funds (or Income Trusts) is the next best thing. I’ve invested quite a bit of money into both the direct oil wells and the Canadian Income Trusts (or Canroys) and the overall result has been pretty positive in both (which is in excess of 12%). 3. Royalties on Books and Patents Royalties on Books and Intellectual Property Rights can be even more lucrative. However writing a best-selling book or creating a something thats worth patenting can extremely time consuming and expensive. For most authors and inventors, its a labor of love – something that they would pursue even if there was no monetary reward to it. But many ebook writers who sell get-rich-quick books about “making money online”...

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Only Men Can Be Property Tycoons?
Jun07

Only Men Can Be Property Tycoons?

By Oonagh Montague The days when a woman’s place was in the home are long gone. Nowadays, she’s more likely to own the home, and perhaps a few more besides. Ria Lawlor, a qualified medical doctor, mother of two and full-time investor, is one of the founder members of the ICES Group, (Irish Complementary Education Systems), an extraordinary team of individuals determined to take the fear out of investing for the ordinary man, or woman. “It all started in 2002 with a game called Cashflow,” says Ria. Cashflow 101, a board game designed by Robert Kiyosaki, author of motivational book Rich Dad Poor Dad aims to teach players how to invest, focusing in particular on property investment. “When my husband Ian and I began playing the game with Tony Reid and Darrell O’Dea, we knew nothing about investment. We started as a small group playing in a kitchen. As more people joined, we moved to a hotel in Tallaght and, finally, on to Temple Bar.” The group grew to such an extent that the original four decided it was time to structure the evenings. “We started inviting guest speakers and holding question and answers sessions,” explains Ria. In 2003 the ICES Group was officially formed and, today, network meetings and events take place nationwide. Guest speakers at ICES meetings explore a range of subjects, such as gold investment, how to make money through property, stocks and shares, or the ever-crucial subject of tax. However, there is even more to learn when the speakers are finished. According to Ria, the questions and answers slot is often the most interesting aspect of an ICES Group event. “People will ask questions such as ‘I’m looking at a property in Dublin 6, is it a good investment?’ or ‘How do I go about renting my house?’ It’s about shared knowledge and shared information. You might meet someone who tells you about an investment that may not be right for them, but it might be right for you.” For Ria, this boils down to one simple lesson: “We’ve found that if you increase your network of people, you increase your net worth.” For Tina Suvanto, a former librarian, the contacts she made through the ICES Group have led to fruitful investments. “You can’t underestimate the power of meeting with like-minded people. I’ve made long-term friends from ICES Group,” she says. Education forms the cornerstone of the ICES Group approach. To this end, they run several programmes and master classes. One of these is the Property Discovery Programme (PDP). Clare Connolly was on a career break from her high-powered job with a pharmaceuticals company when...

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8 Qualities of a Wealthy Woman

Besides money, a wealthy woman has some qualities that serve as guideposts to make sure she’s always walking toward wealth rather than away from it. This month’s readers each had one or more of these traits out of alignment. Here are the eight qualities and how they can translate into financial success: Harmony and balance. Harmony is the agreement between what you think, say, and do. Balance is the state of stability in which you’re able to make sound judgments that will enhance your financial security. When you use a loan for in vitro fertilization that will leave you so deeply in debt that it would be difficult to care for your new child, you forsake harmony. Aligning your thoughts, words, and actions will put you on a path to balance—and emotional and financial well-being. Wisdom and courage. The ability to make (not just think about) sensible decisions that respect your needs takes wisdom, the voice of experience that’s inside each woman. Courage, the catalyst that creates harmony by uniting our thoughts with our actions, is what lets us assert our opinions confidently. To tell your mother that you love her but can’t ruin your financial life to save hers requires wisdom and courage. Generosity and happiness. True generosity must benefit both parties. No woman can control her destiny if she doesn’t give to herself as much as she gives of herself. That’s why I so often caution you not to cosign loans or deplete your emergency cash savings to bail out someone. While those acts seem helpful, they leave you financially at risk. Happiness manifests itself through generosity—when, for example, a woman makes donations that help others yet don’t deplete her. Cleanliness and beauty. Removing clutter and chaos from our lives brings clarity, which makes it easier to achieve what we want. From emptying closets of unused stuff to streamlining your wallet, cleanliness is a sign that you’re in control. And by bringing the first seven qualities into your life, you feel beautiful. When you commit to finding harmony and balance, you have the courage to make wise decisions that are as generous to you as they are to others. This leads to deep, unwavering happiness and brings beauty into your life. I wish this for the women who wrote to me this month, and I wish it for you. Adapted from Suze Orman’s latest book, Women & Money: Owning the Power to Control Your Destiny (Spiegel & Grau) Continued here: 8 Qualities of a Wealthy Woman Share and...

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Don?t be too smart
Jun03

Don?t be too smart

Most of us think about our finances in terms of our top line — in other words, how much money we earn.  We pursue big incomes and then we spend those incomes on the right clothes, the right cars, the right home. Isn’t that what wealth is all about? Not at all. What really matters in building net worth isn’t how much we make, but how much we keep. That’s the bottom line on a financial statement. It’s also the key to accumulating wealth. Self-made millionaires know the importance of the bottom line. Thomas Stanley and William Danko, a pair of business professors, spent years studying households that had net worths of more than $1 million. Their research, outlined in their landmark work, “The Millionaire Next Door”, contradicts nearly all the stereotypes surrounding wealth. Most millionaires, it turns out, accumulate wealth by living below their means.  They avoid status objects such as big cars, huge homes and designer clothes.  They do their own yard work, drink beer instead of champagne, and stock up whenever laundry detergent goes on sale.  They put the emphasis on building up their bottom lines: the amount of money they have left over after taxes and living expenses. You don’t have to be a genius to adopt the same lifestyle.  Jay Zagorsky, an economist at Ohio State University, tracked down 7,000 American baby boomers who wrote a standard IQ test in 1980. He caught up to them in 2004 and asked them about their financial status.  Much as you might expect, the people who had higher IQs tended to earn more. But — and this is a shocker — there was no correlation between higher IQs and higher net worth. Smart people may earn more, but they appear to be just as vulnerable as anyone else to spending as much as they make and neglecting their bottom lines. One reason we get dazzled by a high income is that we forget the bite that taxes take.  If you’re a middle-class Canadian, you’re probably losing close to half of each additional dollar you make to income taxes, GST and PST. Think about what that means: the latte that costs you $4 in after-tax dollars costs you $8 in pre-tax dollars. (Makes you think twice about that morning treat, doesn’t it?)  The dinner at a fancy restaurant that costs you $250 in after-tax dollars costs you $500 in pre-tax dollars. (Gee, and the chateaubriand wasn’t even that good) Of course, the positive way to look at this is that if you pass up the latte and the dinner, you’re giving yourself the equivalent of a $508 raise...

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Hanging With Mike Dillard

This weekend I was invited to be a student at the MLM Traffic Formula 101 Live event in Austin, Texas, USA. Mike Dillard, who wrote MLM Traffic Formula (and many other books), has become a great friend and mentor over the past few months. He has provided extremely valuable lessons, feedback and advice that have changed the way we think about internet marketing at Rich Dad. Being here as a student has been eye opening, to say the least. I have an entirely new appreciation for how effective internet marketing is done. And how much I don’t know! Here are a few of the basics: * Your list… is everything. * Establish a relationship with the people on your list – Speak to your contacts as individuals, not as a group * Provide overwhelming value and education * Be real – People can spot BS from a mile away * Create systems that leverage your content I am extremely excited about what I have learned so far and I am working very hard to implement it. John p.s. The photo above is of Mike’s 2006 Aston Martin Vantage. He was gracious enough to let me sit down and fire it up last night at his house. Amazing! See more here: Hanging With Mike Dillard Share and...

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Rich Dad?s Other Cash Flow Quadrants

In his third or fourth “Rich Dad Poor Dad” book, Robert Kiyosaki expresses the advantages of investing in real estate by describing another type of cash flow quadrant. This cash flow quadrant describes the four ways to generate money through investing in real estate. They are: depreciation, tax benefits, rental-income, and appreciation. I like this model as it is simple to understand and remember. Let’s define each one a little bit more clearly: Depreciation – This is, thanks to Alan Greenspan, the amount structure loses in value over time, assuming no improvements have been done to it. Residential real estate, for example, is considered to fully depreciate its value in 27 1/2 years. So, for the purpose of taxes, an investor may choose to take that depreciation as a deduction. If the structure is worth $200,000, it’s depreciation for the year is $7273. Tax benefits – Anyone who holds a mortgage for property knows that all that mortgage interest is tax deductible. Similarly, when acquiring additional properties, the mortgage interest from those properties are also deductible, as well as improvements made to that real estate. Rental income – When we put a tenant into a property, be it residential, commercial or industrial, we usually receive an amount of rent associated with that occupancy. Hopefully that rent will cover the mortgage payment with some money left over. Appreciation – We all know that although we take depreciation at tax time, the property itself is actually appreciating in value as cities and populations grow. Typically, unless a major economic or whether related disaster occurs, real estate only increases in value. That is why banks and other lending institutions are willing to lend most, if not all the money to purchase properties.   Credit:Rich Dad?s Other Cash Flow Quadrants Share and...

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What you don?t know can hurt your kids
May31

What you don?t know can hurt your kids

~ by Pocahontas ~ I’m a teacher by trade…so let’s take it back to school for a second, ladies, shall we? Raise your hand if you were ever told any of these things growing up: “Get a good education and a college degree.” “Work hard and move up the ladder.” “Save your money in the bank because investing is too risky.” “Get a good job with benefits and a pension.” Now do any of you whose hands are up know people have done all these things but are still struggling financially? Here’s a better question…do you think this is what the Rockerfellers or the Rothschilds are teaching their children?  Since my sistahs are without question some of the most astute women in the world, obviously you can surmise the answer to that is a resounding, “No”. Granted we all believe in the value of a first-rate education, but just because you have X many degrees and/or letters after your name does that really guarantee your financial success? As I said, my sistahs today are savvy enough to recognize that the wealthy are giving their kids something most people are not…and that is the “REAL” keys to financial freedom (after all, aren’t “they” the ones able to play golf at 9 am on weekdays while the rest of us grit our teeth through rush hour to go to a J-O-B? Clearly, they know something many of us do not).   So what IS it that they teach their kids? They tell them to own their own business so they can be in total control of their time and their income. Easier said than done, you think? Well, ask yourself this, “Can you honestly say you’d want your little one to grown up and do the job you’re currently doing?” Actually, do you own your job to be able to pass it down to your kids even if you wanted to after your retire from it like you could a business? Truth be told, most people would rather be the boss than answer to one, but they just have no clue how to make that happen. So allow me to share a few books with you that might give your “entrepreneurial spirit” a prick. First, you may want to invest in “Rich Dad, Poor Dad” and “Cashflow Quadrant” both by Robert Kiyosaki. The former will certainly change your life and the latter will definitely shed some light on the common mistake novice entrepreneurs make in distinguishing between self-employed and business owner. One book I will highly recommend for your children if they are in middle or high school and you want to...

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REOs Open! a big success!
May30

REOs Open! a big success!

The first REOs Open! for Worcester Real Estate Investors and the Northern Worcester County Real Estate Investors was a success! With 8 people in attendance, including Jeff Landry and Tina Miller of J.A. Landry Carpentry. Jeff is not only carpenter but he’s also a general contractor. Jeff and Tina helped with ballpark repair prices on each property that helped with analysis. Jeff and Tina are both board members of the Northern Worcester County Landlord Association. We visited 4 properties, 3 in Leominster and 1 in Fitchburg. 2 properties were SFH and 2 were multi-families. There was a lot of interest in the 3-family REO in Fitchburg. It’s not currently listed and needed some repairs and some asbestos remediation in the basement. The Duplex in Leominster was the worst house in a great neighborhood. The lot value alone is more than the current price! We analyzed the Fitchburg property to determine what the likely repair costs would be, carrying costs, etc., what the maximum amount that could profitably offered if performing the full repairs and remediation as well as will a more modest rehab. In other word, what needed to be done to know how the property would perform. We also discussed the types of financing that would be available and the cash down requirements for those loan products. So a lot of information was discussed and shared! The next REOs Open in Gardner is tentatively scheduled for June 22nd. Check your mailboxes! We look forward to another successful outing. More here: REOs Open! a big success! Share and...

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