Wisdom of Rich Dad

Getting into the top of the financial ladder is just inconceivable to most people. While most people feel that working hard will get them to places where they are truly satisfied, all of them will probably think that just it is not enough. Then, we have a significant few who take finances in a different light and continue to work smart. Knowing that money can work for them represents a changing shift and lifestyle that all should consider following.

This is the story or Robert Kiyosaki’s Rich Dad, Poor Dad. Now a financial bestseller and motivational classic, Robert Kiyosaki communicates a crucial point in finding financial success, which is, make money work for you. Robert Kiyosaki’s motivational books sold over 26 million copies with a multitude of his motivational materials still in print. Even today, he is one of the most influential self-help speakers.

Robert Kiyosaki leads a mindset shift, manifested by a trend so successful today. In his discussion of haves and have-nots, Robert Kiyosaki describes two similar “Dads” with the same talent, skills, and education. However, one dad is rich, while the other dad is poor. He stresses that the line between a Rich Dad and a Poor Dad is drawn by critical differences in perspectives.

The poor father “works hard for money.” Meanwhile the rich father “makes money work for him.” This saying almost poses a cliché, yet Robert Kiyosaki helped us grasped this ideas in an organized manner where all success-driven people can identify with. The idea of the Rich Dad revolves around education, empowerment, and the basic knowledge of how money works. Robert Kiyosaki suggests different financial strategies and key information on investments, high finance, and accounting.

However, Robert Kiyosaki also knows that knowledge and a perception shift is not enough. The Rich Dad should apply their new mindset and turn into reality. This involves a lot of courage, self-belief, and following your gut. The combination of a successful mindset and the will to act led to the most critical philosophies of Robert Kiyosaki’s message.

Generosity is key to the Rich Dad philosophy and last Friday, Robert Kiyosaki and the Make-A-Wish Foundation fulfilled the wish of a young man from Michigan named Jimmy Komara. This extraordinary teenager is very interested in his financial future and his one true wish was to meet Robert Kiyosaki.

Jimmy and his family arrived by limo at The Rich Dad Company headquarters located at 4330 N. Civic Center Plaza in Scottsdale. The day included one-on-one time with the co-founders Robert and Kim Kiyosaki, playing their internationally acclaimed CASHFLOW board game and meeting the entire Rich Dad team.

“What an outstanding day! Meeting Robert and Kim was truly a once in lifetime moment,” Jimmy said. “Just when I thought it couldn’t get any better, they offered me an internship at The Rich Dad Company. This is the chance to learn first-hand what being a true entrepreneur is all about. Thank you to the Make-A-Wish Foundation and the Kiyosakis for making my dream a reality.”

A core value of The Rich Dad Company and one that both Robert and Kim Kiyosaki practice, is giving back to the community. This, combined with their ongoing message of courage, unleashing the potential of the human spirit and personal empowerment, is a fundamental principle on which the company has been built.

“My first response when I heard about Jimmy’s wish was ‘Why me’ He is an inspiration to us all and I was humbled by his request. What a great day, not only for Kim and me, but for the entire Rich Dad family,” Robert Kiyosaki said.

Jimmy, 18, was diagnosed with Ewing’s sarcoma, a rare cancer characterized by tumors found in bone or soft tissue. Ewing’s sarcoma occurs most frequently in male teenagers, with a peak from ages 10 to 20. He is now in remission and will be attending the Arizona State University W.P. Carey School of Business in Tempe this fall.

“Robert and Kim Kiyosaki are shining examples of why the Make-A-Wish Foundation continues to flourish,” said Brent Goodrich, Make-A-Wish Foundation spokesperson. “The huge success of the day was apparent in seeing Jimmy’s most heartfelt wish come true. The Rich Dad Company remained true to its mission by enriching the life of a young man who’s shown so much courage and spirit while confronting this serious medical challenge in his life.”

~ by Robert Kiyosaki

If you’re serious about getting rich, now is the time. We’ve entered a period of mass-produced pessimism, when bad news is everywhere, and the best time to invest is when optimists become pessimists.

The Weird Turn Pro

Journalist Hunter S. Thompson used to say, “When the going gets weird, the weird turn pro.” That’s true in investing, too: At the height of every market boom, the weird turn into professional investors. In 2000, millions of people became professional day traders or investors in dotcom companies. Mutual funds had a record net inflow of $309 billion that year, too.

In an earlier column, I stated that it was time to sell all nonperforming real estate. My market indicator? A checkout girl at the local supermarket, who handed me her real estate agent card. She was quitting her job to become a real estate professional.

As a bull market turns into a bear market, the new pros turn into optimists, hoping and praying the bear market will become a bull and save them. But as the market remains bearish, the optimists become pessimists, quit the profession, and return to their day jobs. This is when the real professional investors re-enter the market. That’s what’s happening now.

Pessimism vs. Realism

In 1987, the United States experienced one of the biggest stock market crashes in history. The savings and loan industry was wiped out. Real estate crashed and a federal bailout entity known as the Resolution Trust Corporation, or the RTC, was formed. The RTC took from the financially foolish and gave to the financially smart.

Right on schedule 20 years later, Dow Industrials and Transports struck their last highs together in July 2007. Since then, nothing but bad news has emerged. In August 2007 a new word surfaced in the world’s vocabulary: subprime. That October, I appeared on a number of television shows and was asked when the market would turn and head back up. My reply was, “This is a bad one. The worst is yet to come.”

Many of the optimistic TV hosts got angry with me, asking me why I was so pessimistic. I told them, “The difference between an optimist and a pessimist is that a pessimist is a realist. I’m just being realistic.”

As we all know, things only got worse in early 2008, with the demise of Bear Stearns and the Federal Reserve stepping in to save investment bankers. In February, many of those optimistic TV (and print) reporters became pessimists — and when journalists become pessimists, the public follows. By March, mutual funds had a net outflow of $45 billion as investors fled the market.

Surviving the Bad Times

Back in 1987, as savings and loans closed and investors’ stock and real estate portfolios were wiped out, my wife, Kim, and I were living in Portland, Ore. Many people were depressed and hiding from the truth. The following year, I said to Kim, “Now is the time for you to begin investing.”

In 1989, she purchased a two-bedroom, one-bathroom house for $45,000, putting $5,000 down and earning $25 a month in positive cash flow. Today, she owns over 1,400 units and — because more people are renting than buying — she earns hundreds of thousands a year in positive cash flow.

The period from 1987 to 1995 was a rough one, even for the rich. In his book “The Art of the Comeback,” my friend Donald Trump writes about being a billion dollars down at the time. Rather than give up, he kept on fighting to survive. He and I often talk about how that period was great for character development.

Two-Year Warning

I believe we’re through the worst of the current bust. I know there will be more aftershocks, and the news will continue to be pessimistic for at least two more years, possibly until the summer of 2010.

But the upside to this is that it gives us at least two years to do our market research and find the next big stock or real estate bargain. Before buying, I strongly suggest you study, read books, and take courses on your asset of choice. If your choice is stocks, take a course on stocks or options. If it’s real estate, take a course on real estate. Now is the time to learn; not only will you know more than the average person and be in a good position when the market turns, but you’ll also meet people with a similar mindset.

You have about two years to get into position. Opportunities this big don’t come along often, so this is your time to get rich.

Climbing Bulls, Flying Bears

Am I optimistic for the long-term? Absolutely not. I still believe we’re due for the mother of all market crashes, and that the U.S. economy is running on borrowed time — and I do mean borrowed. I think most baby boomers are in serious financial trouble, and that oil will climb above $200 a barrel. Inflation will also increase, causing more pain for the poor and middle class.

The Fed is flooding the market with nearly a trillion dollars of liquidity, which is why I believe gold under $1,200 an ounce and silver under $30 an ounce are bargains. Gold and silver should peak and decline before 2020, completing two 20-year cycles. My exit is to sell silver around 2015. I plan to hold onto gold, income-producing real estate, oil wells, and stocks.

Most of us know the bull climbs slowly up the stairs, but the bear jumps out the window. I believe the bull is still climbing the stairs, and the bear hasn’t jumped yet. But rest assured that it will.