Robert Kiyosaki Blog

Financial Education Portal inspired by Robert Kiyosaki

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Does the End Justify the Means?

I’ve read my fair share of financial books but there are a couple which really stick out in my mind as having a major impact on my outlook. One of these is Rich Dad, Poor Dad by Robert Kiyosaki. There are many things I have been able to take away from this book which have challenged my thinking. The greatest challenge however is Kiyosaki’s idea of “good” debt and “bad” debt. Kiyosaki believes that you should leverage other people’s money to make money for yourself. How you leverage other people’s money is by borrowing from them, another way to say you have to go into debt. Although I understand his outlook and it does make sense to me I really had to stop and match up this concept with concepts from the Bible. The logic behind leveraging debt makes sense. If you buy an apartment complex with borrowed money from the bank and turn a profit on that regularly, a profit that more than pays for the monthly payment you now have to the bank, then this processes will gain you money in the short term and probably in the long term. Mathematically it’s sound. Another example is leveraging 0% offers to make money. It is argued that you should take 0% offers on credit cards or other debt opportunities because this can also make mathematical sense. If you have $2,000 on a credit card with 0% interest it would make more sense to put $2,000 in an interest bearing account than to pay off that $2,000 credit card. I tend to be a very logical person who likes to run the numbers on everything. I think that’s why it was so hard for me to see the truth in this instance. The truth is, the end doesn’t justify the means. Just because going into debt could earn you more money or because it makes mathematical sense when you run the numbers, doesn’t make it right. This was, and sometimes still is, a very hard concept for me to grasp. God is very clear about his stance on debt in the bible, just check it out for yourself (Romans 13:8, Proverbs 22:7). Although it never says going into debt is a sin, it makes a very clear case for why you don’t want to do it. It doesn’t make any concession for debt that makes you money or for debt that doesn’t have an interest rate. The really tricky part in all of this is truly applying it to my life. What does that mean about buying a house? It can’t possibly mean that you shouldn’t buy a house...

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Experian stops selling FICO scores to consumers
Feb18

Experian stops selling FICO scores to consumers

On February 9, 2009, Experian stopped selling consumers their own score. They will of course continue selling them to creditors. Apparently, we as consumers no longer have access to FICO scores at all from them. The sell Vantage and Plus scores, which aren’t the same as FICO scores. FICO score are the ones that matter; they are what lenders use. It’s not clear what, other than score, you’ll have access to when you apply for a loan. There is a serious drawback for consumers here: you have to have a pull on your credit now to get a real score and you still may not have access to the information in your file. That makes it very difficult if not impossible to correct errors. It also makes it nearly impossible to enforce your rights under the fair credit laws and I suspect that that is the reason why Experian went this route. We have the right to see the reports on which the scores are based but currently not the scores. I think we should. One of the things I find to be sleazy about this industry is that they don’t have to show you what they share with lenders. Read the rest here: Experian stops selling FICO scores to...

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How will you get the money for a down payment in this real estate market?
Feb13

How will you get the money for a down payment in this real estate market?

Think about this question for a moment. Really think about it. Many people are interested in investing in real estate now because prices are the lowest they’ve been in years. But did you know that you need more cash/equity now to do the deal than you did at the height of the boom? It’s true! For example 3 years ago, I bought two properties one month apart for a combined purchase price of $1.09M. After closing, I actually had about $30K IN MY POCKET! I was only required to have 30 days reserves and the cash out counted towards it and exceeded the amount required. Talk about easy access to money! And you only needed about a 650 credit score, sometimes less. Today, those same properties would still be about the same price because of location but today, I’d need at least $273K cash for just the down payment plus nearly $80K in reserves. That’s not what I’d call ideal especially when you’ll need at least a 740 score. And we ain’t talking about no stinkin’ Plus score! You need a real FICO score. You can get all 3 real bureau scores at that link. A Plus score, which is what most sites give you is a sham. It’s not what the bureaus and it’s designed to blow sunshine you know where! There’s a reason they cost so little. You should alway know what your score is BEFORE applying with a mortgage broker. Aside from looking like a novice, you a decidedly unprepared because you don’t know what to expect. Buying real estate is a business and if you aren’t prepared to spend a little under $50 to be better prepared, you are in the wrong business! Besides, how much did you spend on mentoring or a boot camp and you still weren’t prepared? 3 years ago, you also could sometimes refinance a newly purchased property THE SAME DAY or within 6 months! Ask me how I know! Let’s take a representative bank-owned 3-family property in Fitchburg or Worcester today that only needs minimal work. Okay, so you are probably looking at $120K to buy and $20K for repairs or perhaps $60K to buy and $100K for repairs. If it’s a typical property with 2 or 3 bedrooms, active sales comps put this at about $200K after repaired value (ARV). Your best case scenario for purchase is likely to be on a $120K purchase, about $30K down plus another $20K in repairs? Where will you get $50K? Where will you get the additional $20K reserves? 3 years ago, you could have bought that property when it was in a...

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Great post on marketing by a Worcester County business owner
Jan28

Great post on marketing by a Worcester County business owner

Laura Briere is someone I’ve come across because of posts we both belong to the Rich Dad Followers group on LinkedIn. If you aren’t a member, you should be (it’s free) and if you do join, connect with me! Anyway, anyone who follows anything to do with Robert Kiyosaki want to own a business, real estate and or other investments. That means you should be marketing (hear that real estate investors?!?). Check out Laura’s post below. I’m going to invite her to join us for a game. Robert Kiyosaki Knows His Marketing | Vision Advertising Robert Kiyosaki, Laura Briere, LinkedIn, social networking, real estate, investing, business, marketing Powered by ScribeFire. Here is the original: Great post on marketing by a Worcester County business...

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18.2% drop in home prices and it’s not getting improving!
Jan27

18.2% drop in home prices and it’s not getting improving!

No brake on home-price free fall in Case-Shiller index – Jan. 27, 2009 For the 12 month period ending November 30, 2008, the Case-Shiller Home Price Index shows a drop nationwide of 18.2%. Since mid-2006, it’s fallen 25.1%. Don’t expect this to change anytime soon. Flood of foreclosures: It’s worse than you think – Jan. 23, 2009 Banks are slow to foreclose and list right now. The supply of homes is roughly double what is currently listed. Make sure you have enough margin in you calculations or will cash flow! Additionally, more people are out of work. Bloody Monday: Over 71,400 jobs lost – Jan. 26, 2009 Plan B (or C, D, E or F) is even more now than ever. Real estate is a good plan B; I obviously think so or I would be involved. You still should be looking at other ways of making money. Curious? Email Lee or give him a call! Home prices, foreclosure, REO, bank owned, unemployment, Plan B Powered by ScribeFire. View original here: 18.2% drop in home prices and it’s not getting...

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Our Nightmare Before Christmas
Dec31

Our Nightmare Before Christmas

Forwarded by Danielle Rocheford Our Nightmare Before Christmas (or Unitil Utilities Suck) Twas two weeks before Christmas and all through the town it rained and it froze and the trees all fell down. The wires that were strung on utility poles snapped like a twig and the houses all froze. We got our selves nestled all snug in our bed while visions of warmer days danced in our head, and me in my thermals and Pa in his cap stayed huddled together for a bone chilling nap. The moon on the ice made a crystalline glow and we thought to ourselves, just how long can this go? When what to our wondering eyes did appear but our son with some coffee and donuts and cheer. We could see our white breath in the darkness above and deep under the covers I searched for my love. His feet, they were frozen and so was his head — made me think to myself that he just might be dead. The days passed so slowly, we must be insane as we waited and wondered and called out by name “On Thursday, on Friday, on Saturday (shit!) on Sunday, on Monday, on Tuesday (please quit!) on Wednesday, and Thursday and Friday (oh dread!) the kerosene fumes must have gone to our head. To add to the pleasure of winter’s delight two snowstorms came by – 18 inches of white. The snowing and blowing made things bad to worse and we prayed to the heavens our pipes wouldn’t burst. Pa’s eyes now were sunken, his expression — not merry, his cheeks had a pallor, his nose like a cherry. The odd little smile on his face wasn’t fun and he often was mumbling “go get my gun”. Then a rap on the door, and the fireman said, “Are you sick, are you sane, and is anyone dead? There’s a shelter, there’s warmth, you can come if you’re able, we have showers and kindness and food on the table” — and we looked at each other and thought — “what the heck?” yeah … eleven days later you FINALLY check! On night number twelve we heard the faint roar of a convoy of trucks and we ran to the door. To the top of the poles, to the stretch of the cable — please bring us your power just as fast as you’ re able! They spoke not a word, but went straight to their work and the power came on with a hum and a jerk. They heard us exclaim, as they drove out of sight — MERRY CHRISTMAS TO ALL! WE HAVE HEAT!...

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Fanny Mae and Freddie Mac Halt Foreclosures!
Nov21

Fanny Mae and Freddie Mac Halt Foreclosures!

Wow! Fannie Mae and Freddie Mac have ordered their services to halt foreclosures and evictions between November 26th and January 9th. There are qualifications to meet and it’s designed to allow a rescue plan time to work. Get more details Powered by ScribeFire. Here is the original: Fanny Mae and Freddie Mac Halt...

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Be a patriot. Vote.
Nov04

Be a patriot. Vote.

Tomorrow, November 4, 2008, is the day where you get show that you are a patriot. It’s all well and good when people show flags on their car, despite being an improper display of flag etiquette. I’m not talking about any silly criticisms of wearing (or not wearing) a flag lapel pin. I’m talking about the single most important duty of a citizen in a democracy. I’m talking about going to your polling place to vote. Naturally, I’d prefer that you vote for the party and candidates that I support. More importantly, I want you to vote. I’ve heard all sorts of responses leading up to election day this year, just like in years past. Some are diehard supporters of one candidate or the other, some hold their nose and some refuse to vote claiming that it doesn’t matter. If you think it doesn’t matter, then don’t whine about how bad things are while you endanger the foundation of democracy. You claim to care so much yet show me that you care so little. Pay attention, really learn about the issues, make your choice and engage others in discussion. Show yourself and others that you value living in a free country. Participate and take your duty seriously. We are all responsible for what happens in this land. Vote. If you are local and don’t have a way to get there, call me. I’ll drive you there, even if you vote differently than I do. Read more: Be a patriot....

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State issues in Massachusetts on the ballot
Nov03

State issues in Massachusetts on the ballot

Tomorrow, statewide in Massachusetts, there are 3 ballot questions. They are elimination of the state income tax, decriminalization of small amounts of marijuana and elimination of dog racing. Here’s where I stand. No on 1, yes on 2 and 3. Question 1: I think, I hope, that the selfish insanity of libertarianism is finally starting to taper of. Question 1 is a libertarian ideal. What will happen if state income taxes are eliminated? Local aid with be eliminated and towns will have to replace that revenue from somewhere. Where you might ask? Property owners. Mitt Romney’s revenue cuts about 6 years ago caused property taxes to go up roughly $2B, even though reducing $50 per person less would have meant not police fire fighter or teacher layoffs and it would have meant that people would have died. Local aid was slashed as a result and property taxes went up. Question 2: I don’t like pot and I’m allergic to it. But it is absurd to to lock so many people up in jail, hurt their chances for jobs and education, etc. for using or possessing small amounts of marijuana. Nobody is going to buy it and use it because it’s a minor infraction now. And really, it’s banned because of hemp, which got lumped in because of the cotton trust which is absurd too. We have the highest rate of incarceration in the world, much of it because of minimum mandatory sentencing over what should be petty drug offenses. We’re building more prisons than schools. Let’s help stop this nonsense. Question 3: Dog racing should be banned. It’s true; I love dogs. I like them better than most people. Dog racing has cruel and inhumane conditions and for that reason, it needs to end. View post:State issues in Massachusetts on the...

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Another Life-Changing Rich Dad Event
Nov03

Another Life-Changing Rich Dad Event

Here is another update from the Rich Dad event out here in Arizona. We had a phenomenal time and learned a TON throughout the weekend. I tell you, there is NOTHING like a Rich Dad event. I’ve been to a lot of events, and nothing compares. I believe this one was the best so far. It centered around issues and opportunities that are occurring in society right now. The federal reserve, the environment, the shrinking dollar, inflation, recession, investing… Survival! There will be two products release later this year that you should look out for. One is a highlight reel from the event. 45-60 minutes of the best moments at the event. Perfect for catching the high points. The other is a full-length production of the event. Three to four hours of content that will cover every major subject we studied. I’ll have exclusive information on those products as soon as they are available for pre-order. Stay tuned – Source:Another Life-Changing Rich Dad...

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