Wisdom of Rich Dad

If you read page 261 of “Rich Dad’s Guide To Investing”, Robert Kiyosaki has this to say:

“One of my greatest teachers was Dr. Buckminster Fuller.  Dr. Fuller set out years ago to find what he called “the building blocks of the universe”. In his search, he found out that squares and cubes do not exist in nature.

He would say, “Tetrahedrons are the basic building blocks of nature”.  When I look at the great pyramids of Egypt, I understand a little more about what Dr. Fuller was talking about.  While tall skyscrapers come and go, those pyramids have withstood the test of tens of centuries.  While a skyscraper can come down with a few well-placed sticks of dynamite, the pyramids would not budge with the same blast.

In the book, “The Millionaires’ Club:How To Start & Run Your Investment Club And Make Your Money Grow” by Carolyn M. Brown, the pyramid was depicted as a means of balancing portfolio. The author posits that, “One technique used to help spread the risk is the pyramid model. The pyramid is built on the idea that an investment portfolio should have the right balance of safe, income and growth investment.  The higher up the pyramid, the more risky it becomes”.

In that book, he identifies 6 basic tiers of the pyramid:

1st Tier: (Base): This is the foundation of your portfolio which is designed for capital preservation.  Investments here are lowest-risk, lowest-return types such as Certificates of Deposit (CDs), Treasury Securities (bills, notes, and bonds), US Savings bonds, and FDIC-insured bank accounts (checking and savings). Here cash is readily available to meet urgent needs.

2nd Tier: Low risk, low-return investments include money market accounts, bonds, mutual funds, high grade corporate bonds, and high quality municipal bonds.

3rd Tier: Relatively, low-risk investments. This includes high quality convertible bonds. These pay fixed rate of interest, but can be swapped for shares of common stock others include balanced mutual funds (stocks bonds) and preferred stocks.

4th Tier: Intermediate-risk. These include quality growth stocks or mutual funds and large cap stocks (blue chip common stock).

5th Tier: High/Medium Risk types of investments.  They include midcap mutual funds or stocks (companies of $1-$5 Billion market capitalization), real estate investment properties, puts and call, speculative common stocks and bonds (eg, junk bonds), collectibles (autographed baseball cards, rare coins, historical mementoes).

6th  Tier: Experienced Investors Level.  Here speculation is a basic and risk is high.  These include futures/commodities, options, gold, silver and precious metals.

Though regarded as one of the top institutions of higher education in the nation, USC fails to educate its students in a subject essential to life as an adult: money.

While a student can’t earn a bachelor’s degree from our fair university without taking courses in writing, global cultures and scientific inquiry, the essential subject of personal finance is totally absent from the curriculum. With all due respect to the academy, understanding how to manage money will be far more important to most upon graduation than understanding the sexual rituals of vanishing tribes in Papua New Guinea.

On its website, the College of Letters, Arts & Sciences states: “The university’s general education program is structured to provide a coherent, integrated introduction to the breadth of knowledge you will need to consider yourself (and to be considered by other people) a generally well-educated person.” I find it hard to believe that in a capitalist economy a person can be considered “well-educated” if he or she is ignorant about money.

As Renaissance philosopher Sir Francis Bacon said five centuries ago, “If money be not thy servant, it will be thy master.” And indeed, most people in this country work for money instead of making their money work for them.

In February, the U.S. Department of Commerce reported the personal savings rate for 2006 as negative 1 percent, the lowest level since the Great Depression. Americans are in the habit of spending more than they earn, living on credit and becoming enslaved to their own debt – a habit that many form in college.

Repeated studies show college students often take a cavalier approach to accumulating debt while in school. According to Nellie Mae, the nation’s largest provider of student loans, the average college undergraduate holds around $3,000 of credit-card debt in addition to student loans and other forms of borrowing. Many students accumulate this debt on credit cards for which they signed up after being solicited on campus by lenders invited by USC. The thinking goes as advertised: “I can borrow a little money now, and then I’ll pay it back when I have a good job after I graduate.” Unfortunately, a little money now can turn into a lot of debt later when compound interest takes effect.

With a basic education in personal finance, students could use the principle of compound interest to their benefit instead, and begin building a portfolio of investments that in time could be worth a significant sum. Rather than being forced to make nagging debt repayments at the outset of their careers, graduates could enjoy dividends and growth from their investments as a supplement to their incomes.

Some may argue that a school nicknamed the “University of Spoiled Children” wouldn’t need to educate its students about money because they already have it; however, the problem with many spoiled children is that they’ve never known how to make it. With expenses reliably placed on parents’ credit cards and the word “budget” absent from their vocabularies, students used to relying on an expense account while in school may face a rude awakening when they become independent.

A single general education course in personal finance would help students avoid the bad habits that continue to befall them in spite of the numerous articles and educational programs provided by other organizations. They would be empowered to study subjects and take jobs based on intellectual interest rather than a concern for compensation. And the university endowment would benefit from having more wealthy graduates.

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Carlo Romero is a public policy master’s candidate from San Diego. His column, “The Tonic,” runs Wednesdays.

“The size of your success is measured by the strength of your desire; the size of your dream; and how you handle disappointment along the way,” says Robert Kiyosaki.

With 18 books under his belt, and 26 million copies sold combined around the world, this millionaire self-help investment guru must have had a very strong dream.

Indeed, three of his books have been on the best sellers lists of The Wall Street Journal, USA Today, and the New York Times simultaneously. From his humble beginnings in Hawaii, Kiyosaki has today become one of the most respected – and controversial – businessmen and motivational speakers in the world.

Robert Toru Kiyosaki was born on April 8, 1947 in Hilo, Hawaii, the island’s largest coastal city. He is a fourth-generation Japanese American, whose father was a respected educator in Hawaii and served as state superintendent of schools while the young Kiyosaki was growing up.

After graduating from Hilo High School, Kiyosaki debated about whether he should attend the U.S. Naval Academy in Annapolis, or the U.S. Military Academy at West Point. Finally, he decided on enrolling in the U.S. Merchant Marine Academy in New York.

                         

Kiyosaki graduated from the Merchant Marine Academy in 1969 as a deck officer. Soon after, his brother volunteered to join the Air Force as part of the Vietnam War effort. Kiyosaki began to question his own nerve. “Am I a coward or not?” he asked himself. No, he decided. He was not a coward. “I didn’t have to go,” says Kiyosaki. “I volunteered not because I liked the war, but because it was the right thing to do.”

Kiyosaki began to look into joining one of the Armed Services, when a Marine Corps recruiter told him, “If you talk to them, don’t talk to me.” With that, Kiyosaki had made up his mind. He immediately enlisted in the Marine Corps in what would prove to be a life changing decision. “If you’re going to be successful in business, you have to find a place to develop character,” says Kiyosaki. “The Marine Corps did that for me.”

Living in Arizona at the time, Kiyosaki was sent to Vietnam as an officer and a helicopter gunship pilot. During his very first flight, he came into close contact with tracer bullets. After letting out a few expletives, a nearby sergeant told Kiyosaki that “his type” would not last long. “Mariners actually lost people in the war,” says Kiyosaki. “It was what was called a battle standard.”

Kiyosaki did survive his time in Vietnam, and in fact, was even awarded the distinguished Air Medal. In 1974, Kiyosaki ended his service at the Marine Corps Air Station in Kaneohe Bay, Hawaii.

After leaving the Corps, Kiyosaki went to work as a salesman for the Xerox Corporation. It was a less than glamorous career, and a drastic change from the war. Kiyosaki wanted more, and it would not be long before he got it.

~ Marshall Loeb, former editor of Fortune, Money, and the Columbia Journalism Review~ 

If you are an impulse shopper who simply can’t stop throwing money around, recognizing some of the common lies people tell themselves to justify their spending could help you rein in your urges, says syndicated personal finance columnist Gregory Karp. In his new book “Living Rich by Spending Smart,” he lists six clichés that freewheeling spenders treat as mantras:

1. I could die tomorrow, so I’ll live for today. This immature attitude justifies actions of the buy-it-now and pay-for-it-whenever class. It’s the primary excuse for not saving money.
2. I work hard, I deserve it. This is akin to a four-year-old throwing a tantrum in a toy store crying “Gimme, gimme.” While it is true that many Americans are overworked and that you have to treat yourself occasionally, self-gifting is more prominent today because of advertising pitches to buy things “because you deserve them.” You also deserve to live out a retirement that doesn’t include regular helpings of Alpo.
3. I don’t have a head for numbers. This is the excuse given for not paying attention to personal finances. But managing money doesn’t require complicated mathematics. Consumers now have a plethora of free online tools to help with all sorts of financial planning. Be happy to do smart things with your money, if they aren’t the absolute best you can do. Often, the absolute best involves more risk than you should be taking.
4. I’m too busy to compare prices or manage money. This might be true for a small fraction of people, says Karp, but mostly it’s a lie. Shutting off the TV one night a week will provide most people plenty of time to manage their finances. For those truly time-strapped, consider hiring a good financial adviser. It’s more costly than managing your finances yourself, but better than doing nothing.
5. It’s an investment. Most consumer purchases aren’t investments, because almost all of them plummet in value the moment you leave the store. So you don’t “invest” in a car, a plasma TV or a new pair of shoes unless somehow they’ll make you money. They are expenses. Pacifying your self-guilt by calling them an investment is self-delusion.
6. I don’t earn enough to save money. Saving is not about what you earn, it’s about what you keep. If your paycheck truly covers only the cost of bare necessities, you have an income problem. It’s time to work more hours or earn more with the hours you work.

Are you one of those few people who are having trouble in getting their cars repaired and drain their finances as well? If you are, then, it is high time you start looking for ways  to save on car repairs and save more in your piggy banks.

Defective cars aren’t even worthy to be sold without getting all the necessary repairs. You can’t even exchange it with another car without getting it repaired.

You are left with no choice at all but to get it fixed. The only problem is that without the appropriate guidelines you need in choosing the right repairs, you can be spending more than what you can afford.

With the high prices going on in the market today, no one can really afford to have their cars repaired in very expensive packages. So you have to think of ways to save more on car repairs.

You can trim down on car repairs and save more cash on an ordinary basis without opting to excessive ways. Here’s how you can save on car repairs:

1. Do your homework

One of the greatest problems most motorists encounter is that they spend more on car repairs simply because they didn’t choose the best mechanic or repair service for their cars.

Through research, you can identify the right mechanic and the right shop.

2. Take note of the things that need to be repaired

Before you go to your mechanic, it is best to have all the necessary repairs listed on a piece of paper. In this way, you can tell your mechanic right way the things that need to be repaired. This will prevent unnecessary repairs or misunderstandings on the type of repairs that your car needs. Unnecessary repairs will only add up to your repair expenses.

3. Shop and compare

To get the best quotes on car repairs, try to shop around and compare prices. In this way, you can evaluate and contrast prices enabling you to find the best quotes possible.

Never grab the first repair shop you find. By looking around, you can still find better shops than what you have right now.

4. Try to make every transaction in black and white

This means that before you commit yourself in a particular repair job, it is best to have the estimate written on a piece of paper. Try to acquire a copy of your own. This will prevent unnecessary accumulation of extra charges, which weren’t included on the first estimation.

Keep in mind that not all job repairs were created equal and not all mechanics are honest. So it is best to protect yourself as always.

5. Acquire your car’s old parts before you let the mechanic start the repair process

There are certain car parts that can still be rebuilt. So never let your mechanic take the chance of acquiring these things. You can have them repaired on some machine shops and cut back your expenses on the next repair.

6. Know your way around

If you don’t know your way around car repairs, it is best to ask someone (definitely not your mechanic) for some second opinions. In this way, you can decide which things need greater considerations.

Besides, if you will just let your mechanic decide on your car’s repair process, you might pay more than what you can imagine.

Better yet, learn some easy-to-read modules on car maintenance. In this way, you will learn some important matters regarding car parts. This will enable you to differentiate the important repairs from those that you can do by yourself.

7. Ask for the warranty

Some repair shops offer warranties on the services that they make. Take note of this so that you can be sure not to spend another hundred dollars for the same repair in just a few days.

Furthermore, warranties can guarantee high quality repairs so you can be sure that your car and your pocket are in good hands.

Indeed, car repairs can’t be avoided. These are the things that you have to learn to live with.

Finding good repair shops aren’t that hard. Just try to remember these pointers and you will surely spend less with car repairs.

“I still consider myself a little, fat kid from Hawaii,” says Kiyosaki. He may still be from Hawaii, but Kiyosaki’s impact on the world of personal finance has been anything but little. Today, as one of the leading authors and motivational speakers in America on strategies of achieving personal financial freedom, Kiyosaki has achieved a cult-like in the millions. How did this little, fat kid from Hawaii become a big, strong player in the extremely competitive industry?

Investing: “The values or points of view between the middle class and the rich are exactly opposite,” says Kiyosaki. The number one difference between the two? The rich focus on buying assets while the poor are consumed with their liabilities. According to Kiyosaki, people need to stop working so hard for their money, and instead learn to invest wisely so that their money can start working hard for them.

Education: “You have to be smart,” says Kiyosaki. “The easy days are over.” If you cannot even create your own financial statements of assets and liabilities, says Kiyosaki, there is no way you can be leveraging your investments to their greatest potential. It is never too early, or too late, to begin minding your own business – understanding what money is coming in, how it is going out, and what you can do to get more.

Vision: According to Kiyosaki, you could have the most lucrative opportunity staring you in the face, but unless you have trained yourself to see those potentials, it will most surely pass you by. It is only by first imagining what you want and seeking it out that those very opportunities will come your way.

Experience: He may not have liked having bullets fly by his head, but serving in the Marine Corps taught Kiyosaki some valuable lessons in life – and business. Likewise, he may not have enjoyed selling Xerox photocopiers, but the experience taught him important salesmanship skills. And, that was always what Kiyosaki was after – experience to improve his own self.

Purpose: “In business, they say, ‘If you aren’t the lead dog, the view is the same,’” says Kiyosaki. “They also say, ‘Second place is the first loser.’” From day one of serving in the Vietnam War, Kiyosaki knew what his purpose was: to win. So too, as soon as he stepped foot into the business world, he knew what his purpose was: to win. No excuses, no delaying; Kiyosaki was in both fights until the bitter end. It was by refusing to fail and making the most of his time that Kiyosaki was able to realize success.

“Remember to dream big, think long-term, underachieve on a daily basis, and take baby steps,” says Kiyosaki. “That is the key to long-term success.” Job security today has become something of an ox moron. By guiding millions around the world towards financial independence, Kiyosaki has created his own, and then some. With more than 26 million copies of his books sold, take it from someone who knows.