Wisdom of Rich Dad

~ by Pocahontas ~

I’m a teacher by trade…so let’s take it back to school for a second, ladies, shall we? Raise your hand if you were ever told any of these things growing up:

“Get a good education and a college degree.”
“Work hard and move up the ladder.”
“Save your money in the bank because investing is too risky.”
“Get a good job with benefits and a pension.”

Now do any of you whose hands are up know people have done all these things but are still struggling financially?

Here’s a better question…do you think this is what the Rockerfellers or the Rothschilds are teaching their children?  Since my sistahs are without question some of the most astute women in the world, obviously you can surmise the answer to that is a resounding, “No”.

Granted we all believe in the value of a first-rate education, but just because you have X many degrees and/or letters after your name does that really guarantee your financial success?

As I said, my sistahs today are savvy enough to recognize that the wealthy are giving their kids something most people are not…and that is the “REAL” keys to financial freedom (after all, aren’t “they” the ones able to play golf at 9 am on weekdays while the rest of us grit our teeth through rush hour to go to a J-O-B? Clearly, they know something many of us do not).  

So what IS it that they teach their kids? They tell them to own their own business so they can be in total control of their time and their income. Easier said than done, you think? Well, ask yourself this, “Can you honestly say you’d want your little one to grown up and do the job you’re currently doing?” Actually, do you own your job to be able to pass it down to your kids even if you wanted to after your retire from it like you could a business?

Truth be told, most people would rather be the boss than answer to one, but they just have no clue how to make that happen. So allow me to share a few books with you that might give your “entrepreneurial spirit” a prick. First, you may want to invest in “Rich Dad, Poor Dad” and “Cashflow Quadrant” both by Robert Kiyosaki. The former will certainly change your life and the latter will definitely shed some light on the common mistake novice entrepreneurs make in distinguishing between self-employed and business owner.

One book I will highly recommend for your children if they are in middle or high school and you want to start them off right with the rules of money is “The ABCs of Making Money 4 Teens” by Alan Lysaght & Denis Cauvier. It features many inspirational stories from teens who found success yet gives your child practical advice like how to escape credit card traps, how to reduce debt, and how to invest wisely.

Arm your children with the knowledge you may not have had at their age. After all, isn’t your goal for them to have more than you were able to?

We all want to have enough money to be happy from today until the day we leave this earth.  Enough, is a carefully used word. For some people, enough is the amount of money it takes to just have what is needed, for others it means being wealthy and making a LOT of money.

In order to move from making money to wealthy, you will need to change your perception of life.

These tips to a successful life of making money and becoming wealthy will surely help.

Your mind and your money.
It is important to think about money in a more organic way if you are going to become wealthy. Money will have to be something you save and not something you spend. Being thrifty today can save that wealth for the long run.

The Smaller the Better. 
Aiming at the smallest of savings and adding up those amounts over time can be the best choice for a person wanting to be wealthy. Those smalls savings will add up over the years and as long as they are left untouched they will grow to be the wealth you desire.

The freedom of saving.
All it takes to be freedom from the financial burdens of life is saving. Saving is what people who are wealthy essentially do. So the next time you drop $20.00 on coffee or $40.00 on lunch, remember that the money you save today will buy your financial freedom tomorrow.

You are the one.
The only person that can be held accountable for your financial placement in life is YOU! You are the one that needs to make making and save money, no one else.

Think stock.
The next time you want to buy that new product on the market, stop and think stock. The product will, more than likely, be something you will not use in 10 years, but a stock in the mother company will still be growing.

Look to the champs.
The people who have already traveled the path from making money to becoming wealthy are the best ones to learn from. When finding a mentor, make sure to look beyond the glitz and glamor of celebrity life and focus on the real people of the world.

If your goal in life is to become wealthy, you can achieve that goal. All it takes is time, saving, investing, learning and more saving.

Then, if you have a little more time lying around, you can save a little more.

About the Author:
The author, Elliott Roberts, is a writer at Becomng, a Personal Development blog, covering topics ranging from Productivity to Goal Setting, plus others. Read Becomng, and evolve your life.

~ By Lindley Press ~~

Are those “golden years” approaching, and if so, have you thought about your financial retirement plans?

Robert Kiyosaki, world-famous author and financial advisor, said before you retire, if you want sell your home and move to greener pastures, you have to balance your books first.

“Retirees are on fixed incomes , let’s say it’s $1,000 a month, last year in 2007. The value of a dollar dropped 15 percent last year and it was even more this year,” said Kiyosaki.

“So that means that your $1,000 a month last year is now only worth $850 and this year it may go down to $600 a month.”

According to Kiyosaki, if you follow a few simple rules, you will really be protecting yourself for the long haul.

“It really becomes important to be able to differentiate good financial advice from bad financial advice.  Do you know what’s going to work for you and not work for you?” said Kiyosaki.

“I think the biggest mistake is “Well, I’ve been with the same financial planner for 20 years,” and I say, ˜Well are you rich?” and they say ˜no.” Well, maybe you should change.”

Consumer Reports recently found out what their retired readers wished they had done differently, so yet-to-be-retired readers could avoid similar mistakes. While 93 percent of their readers were satisfied with how they had prepared themselves, those who had some regrets said they wished they had saved more.

Getting ready for retirement

Are those “golden years” approaching, and if so, have you thought about your financial retirement plans?

“Never count on your pension being enough, even a federal pension or a government pension,” said one retiree.

Those with many years until retirement said they know this has to be a priority. Many others said they wished they had started saving younger, and that’s the advice they would give to others.

“The more financial education you have, the better you’ll be able to tell is this advice good for me or bad for me. Does this advisor know what they’re talking about or not know what they’re talking about,” said Kiyosaki.

Borrowing money to invest in shares is commonly referred to as ‘gearing’. Read on for a short guide to gearing, the pros and cons of borrowing to invest, and where you can find more information on borrowing to invest in shares.

What is gearing?

Investing in the stock market can be a great way to make money, period. However, not everyone has the capital they need to get started straight away, so more and more people are borrowing money from lenders to invest. Gearing has the potential to increase profits with your money as you have more to invest with, but it can also increase losses.

The other type of gearing (with the aforementioned gearing being positive gearing) is negative gearing, which occurs when you borrow to invest in an income producing asset but the cost of borrowing is greater than the returns you receive from this particular asset. On a property, for example, negative gearing takes place if the interest you need to pay on the loan is bigger than the rental income you get from the property once other things such as maintenance are figured in.

Advantages of gearing: increasing profits

There are two oft-cited principal advantages of borrowing to invest:

• Increasing your profits – if the shares you buy with the money you borrow increase in value, you win when you sell on the shares. There is also the potential for dividends and bonus shares made by the company in question.

• Tax benefits of negative gearing – If the money you are making on your investment is working out to be less than the cost of borrowing in the first place, you are eligible for a tax deduction on the difference between the amounts.

What are the risks of gearing? Interest rates, financial loss and fees

• The market changes a lot – conditions may change, and rising interest rates may mean you struggle to meet loan repayments, especially if you over-extend benefits.
• You may rely on the income the investment produces, before experiencing a period where there is no income.
• Your loss can be multiplied.
• There may be fees or penalties if paying the loan off earlier than planned.
• Assets simply may not provide the returns you hoped for.
• You may have to pay a ‘margin call’ if the value of your investment falls below the level that covers the lender’s loan.

In short, a bad investment means little or no returns and a big debt that needs paying off too, so good financial advice is crucial.

No investment is risk-free. Some investment risks may be particular to the investment itself or to the particular asset class. Others may be much broader, for example relating to the country of investment or the economy in general.

Economic risk (also known as systemic risk): Risk inherent in the economy as a whole. In the event of an economic recession, the stock market, the interest rate market and the exchange rate market may all be adversely affected. Economic risk can arise due to recession, failure in prudential regulation or faults in the financial system. Economic risk affects the entire market.

Market risk (also known as unsystemic risk): Risk of volatility in a market or market sector. The “tech boom” and subsequent “tech wreck” in the United States in the late 1990s was an example of the risk of a particular market sector.  Market risk doesn’t affect the entire market.

Inflation risk: Risk that inflation will adversely affect the performance of your investment.

Interest rate risk: Risk that the value of an investment will change due to a change in interest rates. Changes in interest rates directly affect the value of interest rate securities, such as bonds. Interest rates also have an indirect effect on other investments, such as property and shares.

Exchange rate risk: Risk of fluctuations in exchange rates adversely affecting the value of an investment. A good way to diversify your investment portfolio is to invest overseas, but changes in the exchange rate of the Australian dollar against the currency of the country you invest in can affect the return of your investment.

Liquidity risk: Risk that an investment can’t be easily and quickly converted into cash (bought or sold) at a fair price.

Credit risk (also known as counterparty risk): Risk that the counterparty to a contract will not live up to its contractual obligations.

Political risk (also known as geopolitical risk): Risk that a government will unexpectedly change its policies or implement new regulations, making an investment less attractive. Political risk can also refer to the uncertainty associated with investing in countries with a political climate less stable than our own.

Sovereign risk: Risk that a central bank will alter its foreign exchange regulations and reduce or null the value of foreign exchange contracts.

Country risk: Risk that a country won’t be able to meet its financial commitments.

Company risk: Risk that the company you invest in fails and goes out of business.

Institutional risk (also known as operational risk): Risk of insufficient internal controls, failures in risk management systems, insufficient capital to absorb unanticipated losses, or inadequate governance structures. Institutional risk also refers to the financial standing of a financial institution or a company that invests money on your behalf. The level of institutional risk varies considerably depending on where you invest your money.

Recently, Robert Kiyosaki appeared on Fox News to promote his newest book, Increase Your Financial IQ.

On Your World with Neil Cavuto, Robert talked about how his earlier predictions have come true and discussed the current real estate market, including explaining how he chooses where to invest.  His real estate investments follow the job market;  in other words, he buys properties where the job market is strong because workers need places to live. 

He said: “We don’t have a real estate crisis, we’re having a financing crisis.”

At the end of the interview, Neil Cavuto said: “Robert Kiyosaki - he has been right every step of the way.”

When Robert appeared on Fox Business Network’s Happy Hour, he repeated that this is a great time to look for investment bargains. But, he cautioned, you need to be smart about it. “Financial intelligence is your greatest asset,” he said.  “Invest in your intelligence first before you go buy a stock or bond or gold or silver.”

He was critical of financial “gurus” who tell people to cut up their credit cards. He pointed out that you need credit cards to function in today’s economy to rent a car, check into a hotel, purchase merchandise online, and so on. The key is to use credit cards responsibly. When people get into financial problems because of credit cards, the fault is not the credit cards, but the person using them.