Wisdom of Rich Dad

When someone is just setting out on a business venture, it is imperative that they find a mentor. A mentor can escalate your business, boost your self-development and improve your business know-how. To be truly effective you should look for mentors with various types of expertise so that you can learn from all of them and use the knowledge to make yourself a better person and run a more successful business.

Before embarking on your quest to find a mentor you first need to examine your life and business. Figure out in which areas you need help. Once you know the focus areas, you can begin your search for a mentor.

Look for experts in the field of expertise you want to develop. After all, as entrepreneurs and business owners, you will want to achieve some level of success or acquire and learn certain skills that you may lack in. A truly successful person always has a mentor who has helped him or her shape their path and pave the way for a better future.

There are many places to find a great mentor such as networks meetings, industry events and conferences, through the recommendation of a trusted colleague and even through online groups you belong to.

Once you have identified the mentor, take some time to watch them in action. If you feel this person is someone you can really learn from contact them to set up a time to talk.  Make sure you inform the person why you want to talk with them.

You should be very clear why you want that person to mentor you, for how long, and what you hope to gain during the mentorship. If the person agrees, you now have a mentor.

Having a mentor will increase the speed at which you can learn new skills. It is essential that you respect your mentor enough to implement their ideas as appropriate. There will be times you will need to get out of your comfort zone based on a mentor’s recommendations. And yet, isn’t growth the reason you wanted a mentor in the first place?

~ www.roanoke.com ~

Salem High School has graduated some otherwise well-educated and well-rounded seniors who weren’t capable of deciphering their first paycheck or of understanding the pitfalls of the credit card come-ons popping up in their mailboxes.

Until recently, Salem was no different than most high schools across Virginia or the United States. Then the school board decided that every student needs a crash course in personal finance before being eligible to receive a diploma.

In the academic world, it’s called financial literacy. In the real world, where knowledge about the rules of cosign come in more handy than the cosine rule, it’s called staying out of trouble. The better equipped teens are in understanding how money works, the better prepared they will be in young adulthood to head off financial disasters.

Economic principles have long been taught in high schools, but they haven’t been mandatory.

There is an acknowledgment at both the federal and state levels that public schools need to teach students at least the basics about taxes, investments, credit and such.

Virginia in 2005 established financial literacy goals for middle and high school students, but as to how they will be taught and applied is still under development.

The Salem School System isn’t waiting. It is the first in what hopefully will become a quickly growing list of schools to require a semester-long personal finance course as a graduation requirement.

At the start of the course, students take a pretest to determine what they already know. Most fail. By the end of the course, most students can earn at minimum a C-plus on the test.

It’s a good start as long as students also learn that this course is really just a beginner’s primer.

Far too many adults don’t understand how markets or budgets work or about filing taxes, applying for credit and building savings; they take out mortgages and loans with negative amortization or sharply increasing payments that they don’t understand at the outset; they borrow much more than they can realistically pay or turn to payday lenders to make ends meet.

The personal bankruptcy courts are full of people who at young ages became trapped in debt because they didn’t understand what they were doing.

Salem intends to make sure its graduates are smarter than that.

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If you need a reason to set up a plan to teach personal finances to your children, a new survey from Charles Schwab Financial Services should give you the motivation. They recently gave a survey to 1000 teenagers between the ages of 13 and 18 and came away with some findings that show that teenagers today have high expectations on what they believe they will be earning in the future:

Teenagers today think that they are going to make quite a bit of money. The average teenager believes that they will be earning an salary of $145,000 a year. Boys believe that they will be earning a salary of $173,000 per year while girls believe they will be earning $114,000 per year. This despite the fact that the average annual salary for a worker in the US is about $40,000 today.

According to the survey, teenagers in the US get most of their money from gifts given to them (54%) while over half (52%) say that they get their money by simply asking their parents for it when they need something. Close to one-third (29%) of teenagers already have some type of debt with the average amount being $300. This is a 23% increase from 2006 when the average debt owed by teenagers was $230.

Another findings from the survey was that teenagers say that they do want to learn more about personal finances so that they can make better decisions when they are living on their own. Obviously, the schools are not teaching these fundamental lessons to the children and so it is up to the parents to help educate their children about finances.

Economics is about how you realise your dreams and achieve financial freedom. Can you get up in the morning, decide not to go for work and yet generate income? One of my friends in his thirties has already retired from active employment. He travels around Canada, educates teenagers on how to live life, enjoys his time on the beaches and leads a rich life-style. You can do so too, if you can generate what economists call “passive income”. What is it?

Passive income is income generated without you sweating for it! If you invest wisely in stocks or mutual funds, you can expect to generate income periodically. Income from Internet-related businesses is passive. Writing books and receiving royalty is another example of such income.

Why should you generate passive income? If you want to improve your life-style, you need to generate more income. This would mean asking your boss for a raise, which you are unlikely to get.

The alternative is to look for other ways of generating income. With a full-time job, you will have to generate such income without spending much time on it. Setting up streams of passive income is the most effective way to improve life-style.

Robert Kiyosaki, author of the best-selling book Rich Dad Poor Dad advocates buying house properties and generating positive cash flows. That is, the rent that you earn from the property should be more than the mortgage and other expenses that incur on the property every year.

You should have three-four different streams of income other than your salary. That way, you can achieve your financial freedom faster — just as my friend did at a young age of 35.

B. Venkatesh

(The author is a Chennai-based financial analyst.)

I was having coffee with my business partner Mun Hoe today. We were talking about property investments and went onto the subject of leverage.

I was talking about leveraging the bank’s money in property when Mun Hoe shared with me that he read an alternative definition by Bradley Sugars, in his book Instant Success: The Real Estate Coach.

Brad Sugars defines Leverage as

“Do the work once and get paid forever“

I was blown away. I was stunned at how true this definition was!

Mun Hoe went on to share that Brad Sugars gave a few examples of Leverage:-

• You write a book once and get paid royalty forever …
• You write an advertisement for your business once and test it to see that it works and then, you can run it for as long as it keeps working.
• You train someone once and then they do it for you long term …
• You buy an investment property once and collect rent and capital gain forever …
• You get a new customer for your business and keep them coming back for a long period of time
• You build a network of distributors and they keep distributing for you forever …

Brad’s perspective changed my view of leverage forever, even though I have used the concept of leverage to achieve my own financial freedom.

~ Willy Lim ~