Robert Kiyosaki Blog

Financial Education Portal inspired by Robert Kiyosaki

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What do the wealthy invest in?
Sep30

What do the wealthy invest in?

The title to this post is a little off in that most times people invest in things in order to get wealthy.  Either way you look at it, there is much research on this subject.  Funny thing, it is not primarily mutual funds or even individual stocks that make up the portfolios of the wealthy. First, lets define wealthy.  There are three generally agreed upon categories.  The mass affluent which has a net worth outside of their primary home of $100,000- $999,999.  The wealthy which has a net worth outside of their primary home of $1,000,000- $9,999,999.  And the super wealthy which has a net worth outside of their primary home above $10,000,000. Interestingly, the investment strategy is basically the same between the wealthy and the super wealthy. And the higher you go in net worth for the mass affluent the more they look like the other two classes. So how do they invest?  What financial instruments do they use?  Well, the truth is they use all sorts of financial instruments, but there are two main strategies which set them apart from those that have less than them. First, is real estate.  The largest categories of investments for the wealthy is real estate and it only gets larger as you go up the wealth ladder.  Of course they all own a primary home.  But a second home is the next largest category of real estate investment.  And as you go up the scale they own 3,4 or more homes.  Next category is income producing real estate.  The wealthy own apartment buildings, commercial buildings, duplexes, etc. that will produce income for multiple generations.  REIT’s (real estate investment trusts) are favored by the wealthy. Raw land is bought and sat on until the investment blooms. The next largest category is businesses. Usually they control or own large blocks of a business that can be best called creative or niche businesses.  The wealthy have been able to identify unique ways to satisfy needs.  Many times the discovery has come out of a industry that they worked in for years, first as a employee. They also own some of the traditional investment classes like stocks, bonds, mutual funds.  However, it is at much smaller percentages than the non-wealthy.  For example, the super wealthy own individual stock and mutual funds, but the median ownership is around $1,000,000 for individual stocks and $500,000 for mutual funds.  Now remember, the super wealthy category starts at $10,000,000.  So their stock ownership percentage is very small compared to their overall assets.  They own cash value life insurance at about the same percentages as their stock ownership. Their overall startegies suggest an understanding of the tax laws, so that they legally avoid high outlays to government.  It also tells us they understand history.  The greatest investments,...

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Some great stuff
Sep28

Some great stuff

Several big items of interest or just good fun. All forwarded by Danielle Rocheford. Thanks! This guy shorted sub-prime and it made him a billionaire with a B! Click and learn more! Here’s a Powerpoint presentation that pretty much gives a few minute description of the hows and whys of the real estate / mortgage debacle. Laugh, it’s funny. Then cry, because is isn’t. Some great...

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Balance between Lifestyle and Finances
Sep28

Balance between Lifestyle and Finances

If you’re a bit financially strapped at the moment, consider it a temporary situation and focus on the future. If you have a job and are making enough money to support yourself, you’re off to a great start. Sure, there’ll be things you’d like to have that you can’t afford-but that’s okay. Keep telling yourself that you’ll be in better financial shape next year and enjoy the experience of being out on your own. To stay on the right financial track, remember these two things: 1. Resist the temptation to use credit cards to buy what you want, but can’t afford. You’ll get yourself in a huge rut if you do this and end up with less in the future. Be patient and know that eventually, you’ll have more buying power. 2. Be aware of financial opportunities, and take advantage of them when they’re available. Many people miss chances to improve their financial positions because they don’t know what’s available to help them do so. By reading this series, you’ve shown that you’re interested in your personal finances and are willing to take the initiative to learn how to get, and keep, your finances healthy. We’ll look closer at these areas of financial opportunity later in this series, but it’s important that you know what opportunities to look for. The sooner you start making the most of your money, the more money you’ll have later. 401(k)plans. We’ll get into more detail about these little goldmines later, but suffice it to say that 401(k)s are a great way to save money. If you’re eligible to participate at work, make sure you do. IRAs and the new Roth IRAs and other retirement plans also are good vehicles for saving. Compounding interest.Starting to save even a little bit of money when you’re young will pay off big time because of time. The longer money is invested, the faster it grows. That’s called compounding, and it’s a great way to see your money grow. Lower interest rates. If you’re paying 18 or 20 percent interest on your credit card, you might be able to get a significantly lower rate just by shopping around and asking. A couple of points can make a big difference. The best possible bank accounts. If you’re paying big bucks in bank fees, you’re not making the most of your money. It takes some work, but it’s worth it to look around and compare what’s available. A budget. Most people wouldn’t consider a budget a financial opportunity, but it definitely is. Preparing and using a budget gives you a chance to see where your money goes and an opportunity...

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Why Financial Experts Don’t Work
Sep26

Why Financial Experts Don’t Work

~ David Shafer ~ The hardest thing for some folks to understand is why taking advice from or turning your money over to experts doesn’t work.  After all, that is what we have been trained to do, listen to experts! There are two problems with this strategy. First, is the problem of our own emotional/mental structures.  Taking advice from experts doesn’t change our own mental structures.  If we don’t change the way we think about money, if we don’t change our understanding about money, if we don’t create a wealth creating environment in our lives, then we will fail to create wealth.  It is as simple as that.  By going to a “financial expert” we are demonstrating an unwillingness to take control of our own lives and that is what needs to be done in order to create wealth.  Study after study demonstrates this. We can not outsource control and expect to have above average results. Secondly, the masses of “financial experts” out there are mostly folks just like you, that haven’t taken control of their own finances, or turn themselves into active participants in their own financial lives.  What, you say?  Yes, that’s right how many folks in the financial expert category are actually wealthy?  How many have made their wealth through investing?  Most, if they have acquired any wealth, do it by having superior sales abilities that turns into superior income.  But as a class, they are wealth underachievers, meaning they have less wealth given their income, than the average.  I read that the average “financial expert” has an income of $80,000, in which they aren’t very good, at least below average, at turning into wealth. Original post: Why Financial Experts Don’t...

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The Master Mindset – Emotions and Intelligence
Sep25

The Master Mindset – Emotions and Intelligence

Click to Play http://www.themastermindset.com During my time at the Rich Dad Company, I became friends with many of the advisors to Robert and Kim Kiyosaki. One of the advisors that I learned the most from is Blair Singer. He wrote the Rich Dad Advisor books, Sales Dogs and The ABCs of Building Business Teams That Win. He is also one of the MOST incredible speakers I have ever heard. I attended one of his two day seminars FOUR TIMES in the last six years. He motivates, inspires and teaches real-life concepts that immediately produce results. http://www.themastermindset.com I am very proud to call him a friend. One of the most significant and simple lessons he taught me was the concept of emotions vs. intelligence You see, these two very human traits have an inverse relationship. In other words, when one is high, the other is low, and vice versa. This is evident in a number of every-day examples that I am certain we all have been through. Have you ever heard someone on the radio that is willing to do ANYTHING to get a pair of concert tickets? Eat bugs, streak through the park, sign kareoke. http://www.themastermindset.com Most of the time, their emotions are extremely high. And needless to say, their intelligence is low. Duh! Would they normally do those things? Maybe. Another example is the ubiquitous fight with a loved one. When emotions are running high, we tend to say some pretty stupid things. And we regret it later, when our emotions are low. We realize that at that moment, our intelligence was lower than a snake’s belly. Anyway, I wanted to share this important but simple concept so you can recognize when this is happening. What you do at that point is your choice. Leave a comment if you found this valuable. I want to hear from you! John http://www.themastermindset.com Originally posted here: The Master Mindset – Emotions and...

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8 Millionaire Lessons

Millionaire lesson No. 1 Build a strong brand, and don’t be afraid to promote your product with passion. Millionaire lesson No. 2 Don’t be afraid to go out on your own if you possess the competence and know people who can help you reach your goal. Millionaire Lesson No. 3 Identify trends and be patient, even if it means waiting a decade to make an investment. Millionaire Lesson No. 4 Success on the Internet isn’t serendipitous. Don’t court investors until you have adequate traffic and initial revenue. Millionaire Lesson No. 5 Plan for the very long term. Gary Gardelli waited two years to get the job he wanted and more than 30 years for the payoff. Millionaire Lesson No. 6 Combining an old way of doing things with a popular new trend will resonate with customers and clients. Millionaire Lesson No. 7 It doesn’t take a fortune to build one. Saving a little at a time is an established path to accumulating wealth. Millionaire Lesson No. 8 Forgo the safe route and find an employer who will help you live up to your potential. Go here to read the rest: 8 Millionaire...

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5 Types of Dreamers

Reading Robert Kiyosaki’s book ‘Business Shool ’ , I learned that there are 5 types of dreamers, they are: Dreamers who dream in the past. These are people like ex-football stars, or people who graduated from a prestigeous university, whose good days are behind them and all they can talk about, is the days when they were famous. If you are one of these people, create a new dream in the furure to work towards and come alive again, as people who dream in the past are people whose life is over. Dreamers who dream only small dreams.These are people who only dream small dreams, as they want to be confident that they will be able to achieve it. The sad thing is that eventhough they know they can achieve it, they never do. They are the people who say later in life, ” I should have done that years ago, but never got round to it”. Dreamers who have achieved their dreams and have not set a new dream. A lot of people who achieved the dream they had in highschool, after achieving the dream and working in that profession for years, end up bored with life. If you are one of these, It is time for a new dream and a new adventure. Dreamers who dream big dreams but do not have a plan on how to achieve them…so they wind up achieving nothing.  These are people who often say “I’ve just had a major breakthrough”, let me tell you all about it or “This time I’m going to make this work”. They are trying to achieve a lot, and try to do it on their own. Very few people achieve their dreams on their own, so find a plan, and a team that will help you make your big dreams come true. Dreamers who dream big dreams, achieve those dreams and go on to dream bigger dreams. I want to be this kind of person, don’t you? Go here to read the rest: 5 Types of...

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Who Took My Money?
Sep20

Who Took My Money?

Another successful addition to the range of financial books written by Robert T. Kiyosaki together with Sharon L. Lechter, Who Took My Money is a worthy read. It is divided into 2 main parts. The 1st aims to address the importance of having a synergy of advisors as well as taking into account their different points of view. The 2nd is about the synergy of various assets and financial forces. Take a look at the content page below. Study it carefully, which part does it answer the question of Who Took My Money?  (Part 1) What should I invest in? 1. Ask a Salesperson 2. Ask a Cattle Rancher and Then Ask a Dairy Farmer 3. Ask Your Banker 4. Ask Your Insurance Agent 5. Ask The Tax Man 6. Ask a Journalist 7. Ask a Gambler 8. Ask Newton 9. Ask Father Time  (Part 2) Ask an Investor! 10. 4 Reasons Why Some People Can’t Become Power Investors 11. The Power of Power Investing 12. Gambling Rather Than Investing 13. How to Find Great Investments 14. How to Be a Great Investor 15. Winner or Loser? It is obvious that the book deals more with investments rather than money loss. In my opinion, Who Took My Money is just a provocative title aimed at boosting book sales. It is human psychology, books with cheeky titles fare better than books with boring titles. If this book were to be titled ‘Investments’, it would be competing with the numerous other books already titled this way. Misleading…because Kiyosaki does not spend many pages explaining where our money is disappearing to (taxes are your single largest expense). Criticisms aside, this book is developed in an unorthodox ‘interview style’, making it both intriguing and engaging at the same time. Rather than doing a whole summary of the book resulting in a diluted book review, I want to share something I learnt from the chapter ‘The Power of Power Investing’, which I feel is the most important chapter of the book. Why the Rich Get Richer!   Conventional attitudes and wisdom lead us to be working in the E and S quadrant. Usually individuals in this group will only have 1 source of income which is their paycheck and they cannot survive prolonged periods without it. Referring to the chart, they save, reduce debt, pay off mortgage, buy paper assets first and invest in a long term retirement plan. Turn your attention over the right side of the chart. Instead of operating from the E-S quad, the rich operate in the B-I quad. Instead of using their own money & time to invest, the...

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Your Enemies Towards Financial Freedom

Your journey towards financial freedom isn’t complete without these obstacles which you must learn to face and conquer. The sooner you take action against them, the sooner you achieve wealth. Impulse Buying Through the years, I have changed from an impulsive buyer to a frugal shopper. It took some time and a lot of personal motivation but I was finally able conquer this bad habit. If I was able to do it, I don’t see any reason why you can’t. Whenever I’m faced with an urge to buy something unplanned, I usually pause and ask myself several questions first. These simple dialogue with myself has become a powerful tool for me and I hope it will be for you too. Inflation Inflation hurts people particularly those in fixed incomes like the elderly and those whose income isn’t indexed to inflation. They lose a part of their purchasing powers because their cashflow remains constant while their cost of living increases. Employed individuals, despite receiving constant salary increments, are hurt because there is a time lag in compensation adjustments. By the time they receive higher nominal income, it has already been months since the prices of commodities went up. Procrastination Procrastination simply refers to the habit of putting off doing something for a later time. Filipinos are more familiar to the term mañana habit, which is often translated to Tagalog as “mamaya na” (much later). Aside from the definition, it is also necessary to learn why we often choose to procrastinate. Is it simply because we are too lazy to act or is it something much deeper? More importantly, how do we get rid of this bad habit? What is the best way to really overcome procrastination? Fear of Taking Risks A simple video which tells the story of my first burn (a term that refers to the first time a person will spin a fire poi). I can still vividly remember that night when I learned how to face my fears and got the courage to take the risk. I hope that this will inspire you to likewise do the same in your life. Wrong Beliefs About Money If you think about it, money is simply defined as a tool that we use to acquire the things that we need or want. It is a non-living thing that is void of emotion or bias. Take a bill out of your wallet right now and look at it. Would you agree with me if I say that you’re simply holding a piece of paper? ~ fitzvillafuerte.com View post:Your Enemies Towards Financial...

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The Power Of Social Proof
Sep17

The Power Of Social Proof

I am on day 23 of my internet marketing career and already I’ve replaced the income from my J-O-B. That’s right. In just under a month, my income is at (actually slightly above) what I was making as an ‘E – employee’ at The Rich Dad Company. What does that say about the education I received while working for Robert and Kim Kiyosaki for the last six years? To me it says that I am one of THE LUCKIEST people on the planet. Not only did I have the opportunity to study side-by-side with Robert, Kim and the rest of the Rich Dad team, I got the opportunity to jump out into the real world and put that education to work. One of the most significant things I’ve learned so far, is the power of social proof. What is social proof? It is when someone well known in the circles you are looking to be successful in endorses you. I have an advantage over most others having Robert and Kim behind me. However, social proof can come from anyone. And it is often just as powerful. Check out this video Nic Mitchell made (without my knowledge!) and posted on YouTube. Now THAT demonstrates the power of social proof. And the power of leading with the giving hand. Nic didn’t ask for anything in return (although, I have recorded a response video that he does not know about yet). See the original post here: The Power Of Social...

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