Wisdom of Rich Dad

Every real estate investment consists of eight parts: generating leads, initial examination, decision making, negotiating, professional inspection, closing the deal, improving the value, and re-selling.

1: Finding potential deals Finding suitable properties is the first part of the real estate investment process. During this phase you look for potential deals, employing whatever tactics works best ? from reading magazines to car trips around your neighborhood looking for promising properties.

2: Research and initial property examination

When you find a potentially interesting target for your real estate investment, perform some initial research about the property in order to check if the deal is possible and potentially profitable. During that phase you have to (1) take a closer look at the property and its neighborhood, (2) ask around about the property and its status, (3) meet the seller(s), (4) research market values for similar properties.

3: Making up your mind

At this stage of a real estate investment process you must make a decision ? buy the property or leave it for another real estate investor. Take the time and write down all pros and cons of the deal. If you determine that the profit potential is large enough and you can cope with everything involved, proceed to negotiations with the seller.

4: Negotiating with the seller

Negotiating is the critical part of every real estate investment. Here your profit margin is determined and the whole deal takes its (almost) final form. It is very probable that negotiations will involve making several offers and counteroffers. When you and the seller finally agree on the price and terms of the contract, the offer is put down in writing and you can start preparing to close the deal.

5: Professional inspection

However, before you close any real estate deal, you have to perform a professional inspection of the property in order to find any potential problems that may affect your plans/profits. It is recommended to hire a professional to do that. Even the most experienced real estate investors cannot find everything, especially if problems are deeply hidden.

6: Closing

If the inspection goes well, it is time for you to close the deal. For the agreed price you will become the owner of the property. Then, you may proceed to the next phase of a real estate deal ? renovation.

7: Improving the value

A quality rehab is crucial for increasing the profit of every real estate investment. Unless you are really good at it, you should leave this job to hired professionals. It takes up your precious time and there is always a chance that you won’t be able to fix everything right, which will cost you more money than you save in the long run.

8: Marketing campaign

When the renovation is over, the property is ready for sale. It is time for you to start your real estate marketing campaign, find a buyer and then finalize the real estate investment by SELLING THE PROPERTY!
As you see, the construction of a real estate investment is relatively easy. If you do it step-by-step always remembering about the final goal (selling the property for a profit), your chances for the success grow. On the other hand, if you decide to skip or swap places of any of the phases, you will fail 9 times out of 10. For instance, if you start your marketing campaign before you improve the property’s value, additional costs of a prolonged campaign may all of the sudden make the deal unprofitable.

 

Sal Vannutini is the owner of http://www.FixerUpperFortunes.com . Did you know that he is giving away a 14 Part E-course for free! Visit now and grab this amazing opportunity, to find out how you too can make profits from your fixer upper home.

 

~ Adam Khoo ~

If you are self-employed, then creating more value will automatically translate into higher profits & income. However, as an employee, tripling the value you create is no use unless it translates into a higher price tag.

Do not expect to get a promotion or a raise automatically. If the bosses can help it, they would rather pay you much less than what you are worth. Most of the time, you must be proactive and ask fora raise.

However, before you ask for double your pay, ensure that you have at least tripled your value! So you can be sure that if the answer is no, there will be a dozen headhunters waiting to pay you what you are now worth!

Once you have created tremendous value, you can…

1) Ask for a pay increase.  Again, be confident that you are more than worth the increase!

2) Ask for a promotion & pay increase. When you have demonstrated that you can create more profits, they will be happy to give you a senior management position

3) Ask for profit sharing.  If you are a value creator, you can confidently ask for this.

4) Ask for variable compensation.  People who prefer a fixed salary are generally those who are not confident about how much they are really worth. The trouble is, a fixed pay has got no upside. If you have the drive and confidence to create value, ask for a higher performance based compensation(even if it means a lower basic pay). Then you know that you have a huge upside.

5) Ask for stock or partnership.  Again, once shareholders can see that you are a value creator, they will want to do what it takes to keep you by giving you ownership.

There you have it. 5 ways to immediately translate your value into more income. But what if the company you’re working for refuses to pay what you’re worth?

Then leave! Because there are others out there you will pay handsomely for people who create tremendous value. Remember, your income will always reflect the amount of value you create. Start creating more value now!

Although it is not the only factor in deciding how wealthy an individual is, disposable income does have a significant influence. If you have little or no money after taxes and expenses, then it is hard to save and invest for the future. In this article, we’ll look at four ways you can increase your disposable income.

1. Get a Raise – or a Second Job
There is no shortage of books and articles that give advice about getting more money out of your employer. They provide counsel on everything from dressing well to taking a pay cut in exchange for performance bonuses. One of the most highly touted techniques is to go for further training or education. This can cost you money now, but it will hopefully translate into higher wages and a more secure position in the company.

Regardless of how you go about it, getting a raise is the most obvious way to increase your income. Along the same lines is the possibility of having another job on the side. Working two jobs in tandem can be physically and mentally draining, but it will bring more money in when you need it.

2. Start a Business
Starting a business, even a small one, is a legitimate way to bolster your income. Much like a raise or second job, running a business will put more demands on your time and require more effort. The difference is that you will see more of the income from your labor because taxation for business owners is a small pinch when compared to the slap that the IRS gives to employees. Some of your business write-offs can even be claimed against other income sources, but you have to follow the rules carefully.

The major drawback of starting a business is that there is no guarantee of success or income like there is with a raise or a second job. Starting a business takes a certain type of person, one with the motivation and the ability to handle the details involved in implementing an idea. The time, effort and nerves that it takes to run a business (that has no certainty of success) means that very few people will take this route.

3. Investing Income
Investing income is considered a form of passive income. This is a misnomer because it does take active effort to create income from investing – you have to research investments, build and maintain your portfolio, etc. – but it is generally considered to take less effort than, let’s say, shoveling concrete day in and day out. Investing income can come from stocks, bonds, real estate, or many other forms. The common theme is that they ideally produce a return on the money you put into them.

Creating income through investing is a process of accumulation. Even if you consistently get a return on investments (ROI) of 20%, if you only have $1,000 in the investment, you will add a little less than $200 to your yearly income after any fees and taxes have been paid (and there is no guarantee of consistent returns of even 10%). Searching for stocks with a history of dividends, sometimes called income stocks, can help create some income now, but it will still not be as rapid in results as a second job. As you put more money in, however, more money comes out in the form of returns.

4. Spend Less
The best way to increase your disposable income is to protect the money you earn by spending less. Tightening your budget will take some effort in the form of sacrificing a few luxuries, but the increase to your disposable income will not require longer hours or incur any extra tax. The more after-tax dollars you hold onto, the easier it is to do things like investing to secure more income in the future. You don’t have to scour the classifieds or create a business model or subscribe to a bunch of financial magazines, you just have to spend less than you are currently making. Earning more may help you, but spending less is the only iron-clad solution to the problem of living paycheck to paycheck and never having enough.

Conclusion
Of all the ways to increase your disposable income, the simplest one is by far the best. Spending less and saving more can be used in conjunction with any of the other strategies as well as being the only one that isn’t going to affect your taxes or require more of your time. In the words of Benjamin Franklin, “If you know how to spend less than you get, then you have the philosopher’s stone.”

- Andrew Beattie

Plan on approaching a lender for business financing anytime soon? Then you should keep in mind that creating a realistic cash flow budget (or projections) will be an absolute necessity. While a lender will want to see your balance sheet and income statement, the historical and projected cash flows will be “must” documents.

Since one of the keys to raising capital is managing your cash effectively, here are some tips on cash flow management, as well as a few questions you should ask yourself before you approach a lender.

What exactly is a cash flow budget?

One of the three components of your business financial statements (along with the balance sheet and income statement), your cash flow budget is an estimate or projection of your business’ cash inflows — i.e., money expected to come in, such as cash from sales or the collection of accounts receivable — and the time period when you expect to receive it. It’s also a projection of your cash outflows — all the money you’ll need to pay to suppliers, accountants, utility companies, etc., i.e., your accounts payable.

Your cash flow budget is critical to the success of your business, because you could have great profits on paper, but still experience a cash flow shortfall. If you just concentrate on profits, such a cash flow shortfall could crop up and cripple your business.

For some businesses, a six-month cash flow budget is realistic and practical, while others prefer to project cash flow annually. If you are applying for a bank loan, though, your projections should cover at least the next three years. Be sure you understand and can explain the assumptions behind your projections, because your banker will likely question them. In the end, your banker will analyze your business’ overall financial health in trying to assess your ability to service the debt, both now and in the future.

Keep in mind that if you plan to apply for a loan in the next year or so, your cash flow and other financial records should reflect a positive picture on how well you manage your cash and the financial aspects of your business. Your records should demonstrate that you know how to prepare a sales forecast (perhaps based on previous years’ sales), you’ve projected your anticipated cash inflows and outflows accurately, and you’ve created a cash flow budget that is logical and meaningful.

Questions to ask yourself

Before you meet with a lender, ask yourself these questions:

• How much money will I need? If you are a retailer, for example, you may get a loan for 50- 75 percent of the value of your inventory (your collateral). Keep in mind that most lenders will discount the value of collateral so they don’t risk 100 percent of its top market value.
• When will I need the money to cover my needs based on my projections? For example, perhaps you plan to buy new equipment in about eight months.
• Will I need additional money — and, if so, when? Maybe you anticipate you’ll need more money for new business growth in about 10 months. But be aware: The more you grow your business — i.e., the more sales you generate — the less cash flow you will actually have to work with.
• For how long will I need the money? Some businesses need a short-term bank loan to carry them through slow periods, perhaps over the summer months when sales slow down, for instance.
• How will I be able to repay the loan? This, of course, is of primary interest to your lender. According to the Small Business Administration, if you need working capital, the lender may want to know how the loan can be reduced during your business period of greatest liquidity covering the business cycle, or over a one-year period.

Conversely, if you are looking for growth capital, the lender may want to know how the loan will be used to make your business more profitable and generate extra cash, which can be used to repay the loan in several years.

What if you spot a potential cash crunch?

If your cash flow projections flag a potential cash crunch, you can start correcting the situation before you meet with the lender. A few ideas:

• Get rid of slow-moving or obsolete inventory, and order as little inventory in the future as you can get away with. Also, determine if you can extend or delay paying vendor invoices without affecting your credit and business relationship with them.
• Get tough with slow-paying customers. Be firm and persistent by making it clear that you intend to enforce your payments terms, perhaps by even using a collection agency in extreme circumstances.
• Change your terms with customers who buy on credit. For example, reduce net-30 days to net-15. Also consider other options for collecting your money faster, such as offering a small discount (perhaps 1-2 percent) if customers pay upfront (cash with order) or if you receive their payment within 10 days of your invoice date.
• Put idle checking account cash into a liquid savings instrument, such as a basic savings or money market account. Ask your banker about a sweep account, which sweeps idle checking account balances into an interest-bearing account daily. And don’t leave cash or checks in your register or safe for several days — get it into your bank account on a daily basis, if possible.
• Finally, ask your suppliers for more favorable payment terms. You may find that you are
  still getting the same terms you got several years ago, even though your buying power or volume has increased.

Get close to your lender

One of the most important things you can do as a business owner is to build a close working relationship with your lender. Ask for advice regarding treasury management and credit. Know what the lender’s procedures and expectations are for approving loans. And keep the lender current on your business plan and the actual results. It all will benefit you tremendously over time.

~ Robert Kiyosaki ~ 

The 90/10 Rule of Money is something that my rich dad taught me about. I have written about it in Rich Dad, Poor Dad and my other books.

Simply put, in the game of money and the game of life too, 10 percent of the players win 90 percent of the money. For example, in golf, 10 percent of all professional players win 90 percent of the money, and 90 percent of the professional players split the remaining 10 percent.

The 90/10 Rule has served as a trusty rule of thumb in my life. It has helped me identify the things I can do to maximize my success and wealth. And I know it can help you too.

For example, one of the reasons I have not taken up the game of golf as a profession is simply because I do not think I could be in the top 10 percent. Not only do I believe I don’t have the talent, I do not have the desire. However, when I decided to write Rich Dad, Poor Dad, I was not only pretty certain my book could do very well. I knew the book could be extremely successful. I wanted to teach my ideas about success, and I wanted the book to win.

I was right. As an author, I am now in the top 10 percent. In fact, Rich Dad Poor Dad has been touted as the third longest-running best seller on the New York Times bestseller list. And now our new book, Why We Want You to Be Rich, has done very well too.

So if you want to boost your earning potential to new heights, stay fixed on that 10 percent where you can maximize your earning potential. And leave those other pursuits to other people.