Robert Kiyosaki Blog

Financial Education Portal inspired by Robert Kiyosaki

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Lessons Learned From the US Financial Economic Crisis
Oct28

Lessons Learned From the US Financial Economic Crisis

 – By Roosevelt Cooper – As we enter the 2nd year of the US Financial Economic Crisis that started in August of 2007 with the sub-prime lending meltdown, the impact on the economy and the average American has been devastating. Economy.com is predicting that by the end of 2008 over 2.8 million US households will either be in foreclosure, be forced to give their house over to their lender and move out or sell their home for an amount lower than their actual mortgage balance. And Federal Reserve Chairman Ben Bernanke said that mortgage defaults wouldn’t harm the US economy! So far besides foreclosures being at an all time high, we’ve had the collapse of practically every sub-prime lender out there including New Century Financial, which was the largest subprime leanding company in the United States. Even regular lenders like American Home Mortgage and Countrywide Financial Corporation were effected. AHM filed bankruptcy and CFC narrowly avoided it with a last minute loan. If you brought a home in the last year or so, take a look at your property value. There’s a good chance it is lower than what your mortgage balance is. And to think all of the financial experts bashed Robert Kiyosaki ten years ago when he said your personal residence was a liability not an asset back in 1997 in his best selling book Rich Dad Poor Dad We also saw the collapse of many of the largest companies in the world in the financial sector. In March of 2008, Bear Sterns, one of the largest investment banks in the world was forced to sell itself to JP Morgan and Chase for a fraction of what it traded for prior to its collapse. The source? Investing in a wide variety of high risk investments, many of which was tied to the sub prime lending crisis. In September of 2008, the Federal Housing Finance Agency announced that it was taking over Fannie May and Freddie Mac. This was done because there were huge concerns that due to the two companies’ exposure to the mortgage market, increasing loan defaults could result in the companies failing to meet its obligations and commitments. Merrill Lynch was forced to sell to Bank of America due to its massive losses from the subprime lending market. Lehman Brothers was forced to file bankruptcy due to is losses from the mortgage crisis. Then it was announced in the same month that AIG – American International Group, which was the 18th largest company in the world was at serious risk of going out of business as well. Despite the fact that most of the companies’...

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The Master Mindset – The Cone Of Learning

Click to Play http://www.themastermindset.com Looking back on my time with Robert Kiyosaki at The Rich Dad Company, a common theme that was there throughout was the study of how people learn. The best diagram I’ve seen that illustrates how much the method of learning impacts how much we retain, is the Cone of Learning. Created by Edgar Dale in 1969, The Cone Of Learning lists, from worst to best, the passive and active ways we learn and how the affect our retention. Not surprising, reading and lecture are the two WORST ways of learning. And how are we expected to learn in school? That’s right… Reading and lecture. http://www.themastermindset.com What is the best way to learn? Doing the real thing. Actually getting into action and doing the very thing you want to learn. Why is doing the real thing so much more effective than reading or lecture? Because it is active. Where as reading and lecture are passive. Being involved increases your retention dramatically. It requires that you use both your left brain and your right brain. It sets it in stone. The subject of learning and teaching were at the core of everything at The Rich Dad Company. John http://www.themastermindset.com See more here: The Master Mindset – The Cone Of...

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The Studying Never Stops
Oct26

The Studying Never Stops

I am in the back of the room at the latest Rich Dad event in Scottsdale, AZ. These events get better and better each time. I don’t know how Robert does it. In the last day and a half, we have studied the Mandrake Mechanism, the Federal Reserve System, R. Buckminster Fuller, The Dollar Crisis, PERT (Planning, Evaluation, Review, Technique), Synergetics, the dymaxion map, and a LOT more. And that’s just the first half. The studying never stops. More: The Studying Never...

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Real Estate Investment for Retirement
Oct16

Real Estate Investment for Retirement

Many Americans aren’t going to end up with money to retire on. These days, it’s a sad fact. Instead of complaining about that reality (and the injustice of it all) the best action someone who wants to retire can do is simply make sure they aren’t the average American. They need to take steps to make sure they will have the income to enjoy their retirement and be able to pay their bills, including their ever-increasing medical-bills. The most effective way to avoid being one of these Americans who wind up working at some remedial job through their retirement, based on the opinion of Robert Kiyosoki, author of the “Rich Dad Poor Dad” book series, is to invest in real estate. Buying investment property is an excellent way for people to prepare for our retirement because it supplies a great benefit called “passive income”. After someone has done the preliminary work, passive income keeps coming in without a lot of effort. A typical worker gets paid only for the time he puts in. A real estate investor, after developing her system, makes money for keeping it running. And keeping it running, if she been very clever about it, will involve paying his employees to do the job of checking up on them every now and then. A best thing about passive income (such as from investment properties) is, the more time the investor keeps them, the more ROI they should make for him/her, with less and less effort on the investor’s part. It’s the nearest thing to magic we will ever find in the world of finances. It sounds attractive, but one should never simply take the plunge without looking first. Although it is all very learnable, there’s quite a bit to learn when you are thinking about real estate investing – things like comprehending economics and the laws related to real estate. The most important concept to understand, however, is one’s own personal limitations. The person who knows where to locate the information she wants is much better off than the person who remembers tons of facts and formulas around in his/her memory. In the book “Cash Flow Quadrant,” Robert Kiyosaki teaches newbie investors to raise their income as well as their knowledge. Mr. Kiyosaki writes of creating a business system that will set up and left alone, freeing up the owner to move on to the next deal instead of spending all his/her time babysitting his/her business. The next step is to continue that real estate education and start to look around for specialists to employ and property to acquire. Robert Kiyosaki also refers to this change...

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Saving’s not enough, invest your money

When we hear the word money, what comes to mind — savings in banks, investment in mutual funds, investment in equity, investment in real estate, investment in antiques? In my opinion, it is a combination of all. Investment gurus call it the ‘diversification of portfolio’. We learn the discipline to manage money effectively outside the classrooms. It reminds me of an old incident. Once, almost 20 years ago, I visited my friend and we were busy talking when her young son entered happily, showing his mom a $100 note gifted by his granny. All he wanted to do with it is buy chocolate. His mother explained to him that chocolates are unhealthy and he should do something else with the note, preferably put it in his piggy bank. Reluctantly, he agreed. A few months later, I happened to visit her again. That day she was busy with her son, helping him open his piggy bank, overloaded with coins and notes. They both counted them and were delighted that the total was beyond their expectations. Again this time as a responsible mother, she advised him to put this fund into a savings account. She taught him to fill up the deposit slip. The boy tried, but could not. So his mom filled the slip and he left for the bank along with an office help. Years rolled by, and his mom is now proud of his saving habits. However, the amount is earning interest only in the bank. “To save must be a habit of childhood, but to invest must be the habit of adulthood.” My friend, as a responsible mother, could reach only her son’s childhood and not beyond. What is the count of your investment portfolios? Are you working for money or is money working for you? “The poor and the middle-class work for money. The rich get the money to work for them”- Robert Kiyosaki, the author of Rich dad poor dad said in the book. It’s generally seen that many people have the habit of switching off their minds when it comes to money matters. People in the other category have a habit of exercising their minds when it comes to money. The difference depends on many criteria. It doesn’t matter if the child doesn’t listen to you, or doesn’t obey you. The child always observes you. Since childhood, we listen to and observe many things in our parents, teachers, friends and others. This plays a vital role in developing our thinking patterns. I will explain two different thinking patterns by picking up some of the effective sentences from Rich dad poor dad. Generally, we veer...

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Cashflow at La Tazza
Oct13

Cashflow at La Tazza

We had a great game of Cashflow 202 Saturday night, October 11th at La Tazza, in downtown Leominster. James, Dan, Marria and myself played. Anita McHugh dropped by for a while before she had to take off. Lee got out of the Rat Race first, about an hour into playing, followed a few turns later by James, then Dan and Marria. James won first thanks to striking oil with the Russian oil deal. These things happen in life; you have to be willing to take a risk. In real life, this sort of thing would be open to qualified investors (anyone in the Fast Track is) because of risk and in James’ case, it would not have negatively impacted him if it had not succeeded. We continued playing and I was able to buy another business on the next turn or two which put me over the $50K per month increase in cash flow and I already had two dreams. We called the game at this point because it was still early and Dan had a long ride home. We didn’t actually start until 7PM or so and we were done by 9:30PM. Now that was a fast, focused game and we ate dinner while we played. In this game, we all played the business manager but started with different starting portfolios. I started with a small amount of cash and a smallish stock portfolio. Initially, I had not been able to buy any real estate on my own (not enough money and I didn’t go heavily into debt) but I was able to partner profitably. I also was able short and option stock and sold my initial portfolio after a while without the companies failing. That allowed me to progess slowly in passive income and generate over $500K. I wasn’t negatively affected by a bad economic outlook and diminished rents. Then, with lots of cash on hand, I was able to buy a lot of junk bonds with a conservative yield that but me out of the Rat Race and on to the fast track. I never was able to lend privately to the Rat Race as all had sufficient cash. I stayed and talked with Stephanie, the owner, and patrons of La Tazza until just after midnight. I like the place and really enjoyed the political discussion. It also was good for another reason because I was given a strong lead for a potential deal. I’m not saying this to brag but. I’m saying this to share what this experience shows: if you are in the market for (insert item here), TELL PEOPLE! I don’t care if...

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He’s #1!
Oct13

He’s #1!

Warren Buffett has has once again become the wealthiest individual because of market volatility and shrewd buys. Would you believe his networth INCREASED by $8B last month? Click and learn more. Wow! Forwarded by Danielle. Read more: He’s...

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What a mess
Oct09

What a mess

I’ve been delinquent the past few months in posting. I’ve been quite busy, what with some of my business ventures (including a couple of new ones), real estate and the real estate investment clubs. There’s a lot of fodder for blog posts over the past few months. From more bank collapses including Fannie Mae and Freddie Mac, insurance company implosions including AIG, foreclosures skyrocketing, etc. But keep reading because you’ll find what finally motivated me to blog today when I’ve already get about 18 hours of work in the next 5-1/2 hours. I’m pretty much sick and tired of hearing mortgage brokers lay the blame squarely at the feet of borrowers. Let’s face it: there are (or were) a lot of bad brokers that coached borrowers and in some cases outright misled them. There were also borrowers that went along knowing full well that they were lying and could. The borrower knew it, the broker (and originator) knew it, the bank knew it. Even the insurers knew it. AIG was “insuring” these loans that everybody in all financial sectors knew were fundamentally unsound. Then they were put together with other loans of all grades into a great big pot. Then, like apples that you wouldn’t eat because they look bad and are on their way out but when pureed you don’t know the difference when made into apple sauce and sugar is added, they got sliced and diced into little pieces sold to investors as a sanitized product that had supposedly reduced the risk. Then they paid the companies to rate the new securities. Just like banks that had their preferred property appraisers that were compromised (think the investigations in NY and CA into inflated appraisals pushing people into jumbo mortgages or sub-prime products by collusion), the ratings were inflated (and unregulated). To further wash these bad mortgages, these securities were sliced and diced again in new securities, and rerated even higher! What investors doesn’t want some of their assets in AAA rated securities that pay a rate of about 8%? For those wondering, that AAA rating is supposed to mean that there’s about as little risk as there could possibly be. Ever since falling out of the last real estate bubble in the early-mid ’90’s, government has wanted to increase home ownership. That’s good for everybody including real estate investors and government because, lets face it, prices go up and so does tax revenue in a world of increasing value. So let’s just drop that partisan political nonesense. Republicans have been trying to blame Bill Clinton, Democrats, Congress, etc. In other words, it’s that nebulous “them”. Democrats have...

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Kiyosaki predicted collapse of Goldman Sachs and Lehman Brothers
Oct09

Kiyosaki predicted collapse of Goldman Sachs and Lehman Brothers

Indeed he did! Watch and find out. Also, check out his new post on Yahoo Finance. Both from an email earlier today for the Rich Dad Company to Insiders. Original post: Kiyosaki predicted collapse of Goldman Sachs and Lehman...

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A Human Touch
Oct03

A Human Touch

It is amazing how a little personal attention goes a long way. I just talked to two people that were so grateful just for the fact that I listened and was willing to help them. What is even more amazing is how rare that is these days. See the original post: A Human...

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