Robert Kiyosaki Blog

Financial Education Portal inspired by Robert Kiyosaki

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What are your motives for demanding money?

The increased easy access to credit in the commercial banks, mortgage institutions, and stock market and pension institutions in Nigeria promises enhanced growth for the economy. This is because consumer demand in a country drives economic growth. Effective demand they say is only possible when there is the ability to pay for the goods or services desired. Since demand can only be effective with money, it is therefore no surprise that as the economy begins to record modest growth, the demand for money is increasing at the national and personal levels. Money is therefore a tool for demand in the hands of all economic agents, be it households, companies or the government. Everybody including the wealthy people keeps seeking for more money to finance one form of expenditure or the other. With the budget of Nigeria increasing every year, proposed to be N2.7 trillion in 2008, it is evident that even the country is spending more money every year. Facts indicate that different individuals and governments have different motive for demanding and spending more money. Motives for demanding money are said by economists to be varied from transactional to precautionary to speculative. All three motives involve spending, but the type of demand expenditure makes the difference especially as it concerns wealth creation or capital accumulation. The expenditure on investment also known as the speculative demand for money usually brings in returns for the expender and it is usually from accumulated savings because, such expenditures involves large amounts that may not be easily accessible by a single individual except by means of borrowing. Companies expend in overhead costs, which complements their productive activities and therefore serves as an indirect investment while governments also spend on capital and recurrent fundamentals. The lifestyle of most people however prompts them to spend more money on food, more recharge cards reported to be high in Nigeria, education (children and wards), health care, transportation (fuel), health care, flamboyant weddings and parties amongst others. Tony Adache, a civil servant, spoke on the motive of his demand for money, to him money is for spending and spending is part of life; no human can live without spending on food, transportation, shelter, and so many other things. According to him, one is either spending or another person is spending on one. On whether he saves for investment purposes, he categorically said that he would only save after meeting his needs and those of his family and that his income is not even enough for his needs talk more of investing. Chuks Azu, a trader, said he does save for investing, but that most times one need or the other comes...

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So long Countrywide Finance
Apr26

So long Countrywide Finance

On April 24th, 2008, Mortgage Lender Implode-O-Meter reported that Bank of America is going to make the Countrywide Finance name go away. No big surprise! It’s kind of got the same disaster-tinged feeling like Valujet after the crash in the Everglades. Countrywide lent money that it appears they shouldn’t have than anyone else. Read the original post: So long Countrywide...

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Printing money by Federal Reserve in US and European Central Bank in EU
Apr14

Printing money by Federal Reserve in US and European Central Bank in EU

First I heard about this topic from RichDad Insiders. Then I heard it again and again from different sources… most interesting story’s have been when Mike Maloney is talking… Today I would like to share with you two graphs:M3 (money offering) of US Dollar:Source: Seeking AlphaM3 (money offering) of EURO:Source: European Central BankWhat we see here?Basically we see here that there is today 20% more US dollars and 12% more EUROs in circulation than one year ago!!!Both of graphs show how many percents more currency is in circulation compared to a year ago. To be honest both currencies have lost more value as these percents because central banks have sold at the same time also their assets – so there is less and less assets backing the same number of currency. Read the original post: Printing money by Federal Reserve in US and European Central Bank in...

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Rich Dad 2008 Predictions Part 1
Mar29

Rich Dad 2008 Predictions Part 1

Stop and listen. Here’s Rich Dad’s predictions for this year. When the video ends, at the bottom you can pick parts 2, 3 and 4. Read the original post: Rich Dad 2008 Predictions Part...

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The Spare Time Co. or boosting your personal bottom line and getting out of the Rat Race with a business in the basement
Mar28

The Spare Time Co. or boosting your personal bottom line and getting out of the Rat Race with a business in the basement

When playing Cashflow, most players in 101 won’t start the small businesses “in the basement” like the software company or widget company thinking it’s a lot of money with no payoff and a chance to lose your money. This is the same attitude that they have in life. The network marketing in 202, Spare Time Co., on the other hand, every wants to do because it’s cheap and easy (too easy, really). Most things in life take real effort. Taking the time to come to Cashflow games and getting out of the Rat Race takes effort to. It just happens to be enjoyable so it doesn’t seem to be as much work. Most people that play with the Twin Cities Rich Dads and Moms are in the E Quadrant. Remember the Cashflow Quadrant? We are all trying to make our way to the Investor and Business Owner quadrants. Going through the S Quadrant (self-employed) is an excellent way to move in that direction because of extra income and business growth. Of course, not all small businesses make it. But there are enormous tax benefits to having a “business in the basement” that is not a hobby as defined by the IRS. And that doesn’t mean the business can’t be your hobby either! After all, improving your economic means is about life style as well, right? Any type of business or investing takes effort and your part-time business would too. The pay-off could be immediate but probably takes some amount of money to start and perhaps on an on-going basis for a while, but when you reach profitability, you have cash flow. We’ve all heard about “delayed gratification” and this kind of falls into that category. What kind of things can you do? The possibilities are endless. You could be an online affiliate marketer, have a ecommerce site where you do no product fulfillment or orders, follow the system laid out in “The 4 Hour Work Week”, build picnic tables, create websites, manage real estate, plan parties, walk dogs, etc. You could do all of the work yourself, some of it or none it. There’s still planning, managing and funding it (and other things too) but it doesn’t have to kill you. So when you think about your goal of getting out of the Rat Race, do you think that extra income and an asset you can sell later perhaps would help? And think of the education you’ll get! One real important aspect of the business in the basement, or any business for that matter, is it changes how you are taxed. Remember what Rich Dad says: in a business,...

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More banks freezing HELOCS
Mar28

More banks freezing HELOCS

Yesterday, I got word from another investor that her HELOC was frozen, this time by Bank of America. This is the third large company that has frozen the HELOC of someone I know personally. So consider your strategies where HELOCs are concerned. And think about maybe refinancing them with a small bank. More here: More banks freezing...

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Private Lending from the Fast Track to the Rat Race
Mar10

Private Lending from the Fast Track to the Rat Race

We actually added private lending before but i forgot to get it added with the house rules. It’s added now. So now, just like in life, you can get a private mortgage, just like you can find a money partner! Fast Track players can lend to Rat Race players at the same terms and conditions stated in the house rules for borrowing from the bank except that the rate is 5% instead of 10% per month. Hey, that’s still 60% per year and only one Fast Track business has a yield that good. Now, debt restructuring and refinancing is a strategy that can be pursued in Cashflow, just like the real world, in addition to just paying down debt. In other words, it makes “good debt” even better. Original post: Private Lending from the Fast Track to the Rat...

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Background story about buying Silver
Mar02

Background story about buying Silver

Few days ago a wrote the story “Silver is going up 🙂“. But probably you are not so interested that somebody is getting richer, but more like how is somebody doing it… So I would like to share with you the background story what I had go trough to buy this silver…First I got the idea…Many times I heard Robert T. Kiyosaki talking about Silver… First time when I heard it, I was like ok… and did nothing. When I heard it again and again I got more interested about Silver… but I didn’t find ways to buy Silver here in Estonia… Finally when I visited New York in end of 2006 @ The Real Estate Wealth Expo (as volunteer for RichDad company) I met also Mike Maloney because he was with hes companion out at the fair. Normally they sell Silver & Gold through their web page, but as I live in Europe and they only deliver in US I convinced them to sell me some Silver right away. But I was there with my small bag (which I carried as hand baggage in air plain), so I couldn’t buy much anyway. Second problem which I had was that I didn’t had enough cash with me… so we made a deal that on the second day I will bring some cash and they bring me some Silver. Then I had to get the cash… For me it was obvious that I can go to ATM and take it with my bank card… but it was not so simple at all. In Estonia it’s possible to get from ATM pretty big amounts, but in US most of ATM only allowed to take 50 or 100 USD max. So I searched in Manhattan some bank offices where I could take bigger amounts at once… Finally using all my three bank cards (and three different ATM machines) I got the amount out what I needed… and I got my first Silver in the next Day 🙂 This part was more or less not so hard… but I wanted more… so I did some research here in Estonia and found two companies which could deliver Silver for me. BUT there were problems… they have to add VAT (18%) to the price. OK, I figured out that I could buy Silver to my company and get the VAT back from Tax Office. BUT then there was second, much bigger problem… they would sell me Silver but wouldn’t buy it back. The reason was that one of these companies sells Silver mostly as gifts and second as material for production companies and they have...

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Silver is going up :-)
Feb29

Silver is going up :-)

I feel good… Why? Because I listened 2008 Predictions video – Part 4 of 4 in the beginning of this year at richdad.com. Also I read often Mike Maloney’s web page GoldSilver.com I also have bought some silver and one ounce of gold in 2006… But the Best thing what I did was buying more silver @ 14th of January 2008… Do you remember the story Why I sold my rent condo? What it has to do with this story? On 14th of January I put all this money into silver… and silver has gone up from that day approximately 18%. Unfortunately in European Union its not good idea to buy silver as metal because of VAT which would be added and because of poor opportunities to sell it later… so I had to buy it as index stock (SLV is the symbol). But SLV follows the price of real silver quite good...

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Prediction Video #4 Posted on Ron Paul’s Site

I just received a Google Alert that pointed me to the Ron Paul for President site where they’ve posted part four of Robert’s 2008 prediction video. This clearly demonstrates the power of social networking. Read the rest here: Prediction Video #4 Posted on Ron Paul’s...

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