Wisdom of Rich Dad

To get a bureau credit report, you can do so from one of three federally recognized credit bureaus: Equifax, Experian, or TransUnion. Each of these bureaus will allow you to get one free report- which means if you access all of them, you can get up to three free bureau credit reports per year. Be sure to take advantage of this fact, and keep an eye not only on your finances, but on your security. If you are working towards repairing your credit, these reports will become especially important.

Oh No- What’s This, A Mistake?

Correcting mistakes or questionable activity on your credit report right away is of vital importance. The more time goes by, the harder it can be to correct any inaccuracies. As well, your credit rating suffers. Not to mention being harassed by bill collectors for bills marked unpaid.

When you see a mistake, you have to make a hand-written request to challenge the information and send it to the credit bureau that sent you the bureau credit repair report. The credit bureau has 30 days to get back to you. In the meantime, they will be contacting all of your creditors to verify if what you said was true. If they cant find anything to disprove your written request, theyll change the information in your favor.

As a borrower, you also have the right to have written statements included with your credit bureau repair report. These can be included as a permanent record in your report- for future lenders to read your side of the story. For instance, if you were involved in some type of natural disaster or other significant event which affected you substantially, but had never missed a loan payment previously, they may take this into serious consideration when considering lending to you.

What a Credit Bureau Report is Not

A bureau credit repair report does NOT magically remove all information about your substantiated bad credit days, such as information about bankruptcies, loans and repossessions. Changing that information is highly illegal.

A bureau credit repair report also is not a new or secondary identity file about your credit history. That also is incredibly illegal ” right up there with fake I.D.s and forged passports.

If you have to have changes made to your bureau credit repair report, be sure those changes are actually put into your report. The best way to do that is to order another report. Life is fun, isnt it?

Robert talks about how to make the best of this economy and come out on top in this interview on one of the most highly viewed stations in New York, Fox 5.

What the financially challenged don’t know…

1.  They don’t know how to get into the money flow. The crucial distinction between sportsmen and spectators is not that the sportsmen play and the spectators watch; it’s that sportsmen get paid, while spectators pay!

To get paid you need to be inside the lines, on the field of play. As long as you’re the one settling debts, you’re a spectator. You’re investing in someone else’s game.

2. They don’t know how to create value. To get into the money flow means creating value, and value is created automatically when you’re in your own flow, when you’re doing what comes naturally to you.

Donald Trump is in his flow buying and selling property. He has an eye for spotting opportunities in buildings, which he buys and sells. He has become one of the biggest property tycoons in America.

3. They don’t know the difference between good debt and bad. When you buy a car or a boat, you’re buying a liability. Any purchase that does not put cash in your pocket is a liability.

Good debt buys assets that bring in cash. If you take a loan to buy an apartment building that will produce revenue, that’s good debt. You can also borrow against your mortgage to acquire more assets.

4. They don’t know how $100 saved can be turned into $1000 invested. When you’re spending everything you earn just to survive and pay off debt, you normally think you don’t have much left to save.

But the truth is you don’t need loads of cash to start saving, a few hundreds saved can be used to raise finance to buy an asset that will generate thousands. You can start with as little as $100.

5. They don’t know how to use other people’s resources. Take a look at any wealthy or successful person. Are they operating alone, or do they have a team of supporters?

The gung-ho, lone-ranger approach simply does not work. The first step to getting on to the field is putting the right team together. You don’t have to know how to do everything, you only have to know who can do it for you.

6. They don’t know how to control their emotions. Starting your own business is risky. So is any investment. The single most important factor is not knowledge, but being able to manage your own emotions.

Most people don’t invest or don’t start their own business, not because they don’t know how, but because they’re afraid. which leads to errors of judgment. Emotional maturity is absolutely crucial.

7. They don’t know why they want to be rich. Most people just have a vague idea that they’d like to be rich. They don’t know why. T hey don’t know what they’d do with it once they get it.

Robert Kiyosaki, author of the Rich Dad, Poor Dad series, says that if you don’t have a good enough reason you’ll be looking for short cuts, trying the next get-rich-quick scheme.

Source: Neil bierbaum.

- Robert Kiyosaki

People often ask me, “How do you find great investments?” My standard reply is, “You have to train your brain to see them. Great investments are all around you.”

I know that’s not a very satisfying answer. Most people want something more specific and concrete. But my reply is as accurate as possible. If we could’ve seen all the great investments just in the past decade, we’d all be multi-billionaires.

Missing Out on Millions

There have never been more opportunities to become rich than in the last 10 years. And there’ll be even more opportunities in the next 10. Let me explain. Like many investors, I didn’t see the power of eBay almost a decade ago. If I had, I’d be a billionaire today. Nor did I see the power of YouTube, or Google, or MySpace. Being an old guy, my brain isn’t trained to see investing opportunities in cyberspace. So I missed them.

Thirty years ago, when my business career was just starting at Xerox, I was introduced to a new type of computer. I wasn’t tuned into computers at the time, so little did I know that I was looking at the early version of what was to become the Macintosh. So I also missed that billion-dollar opportunity, too. How many billion-dollar opportunities have I missed? Maybe millions.

If I’ve missed so many million- and billion-dollar opportunities, why am I writing articles and speaking worldwide about financial independence? That’s a valid question, and the answer has to do with helping you find great investments.

Perseverance Pays Off

I took my first real estate investment course in 1974 in Honolulu. The cost was $385, and I believe it was two or three days long. Toward the end of the class, the instructor said something I’ve never forgotten: “Now you know the difference between good real estate investments and bad real estate investments. Now you all know what to look for.”

He paused and then added, “The problem is, most people will tell you such investments don’t exist. Your friends will tell you so, and so will real estate agents.” Truer words were never spoken. For the next few months, I went from real estate office to real estate office, looking for investments. As promised, the real estate agents told me what I was looking for didn’t exist. My friends and co-workers at Xerox told me the same thing, and said I was either dreaming or smoking funny cigarettes.

Finally, in a small, obscure real estate office in downtown Waikiki, I met a scruffy little broker who said, “I have what you want.” The next weekend I was on a plane to Maui, where he’d found an entire condominium development that was in foreclosure.

I purchased my first piece of investment real estate for $18,000, putting the $2,000 down payment on my credit card. The one-bedroom/one-bath condo paid me a positive cash flow, even after all the expenses and mortgage payments. My investment career had begun. More important, I was training my brain to see what most people don’t see. That $385 real estate course has made me millions of dollars over the years.

Keep an Open mind

Earlier this year, around tax time, I wrote an article, “Think Rich to Lower Your Taxes.” It was about an investment strategy known as the “velocity of money,” and how I use it to invest, make a lot of money, and then legally use the tax laws to minimize my own taxes. I suspected it would spark some controversy, and it did.

For a couple of weeks, I kept track of responses. Some of the less-complimentary comments reminded me of what those real estate agents and my friends at Xerox said to me back in 1974.

You see, our brains are either our greatest assets or our greatest liabilities. As I said, when it comes to investment opportunities in technology, my brain is a liability; I just don’t get it. When it comes to investment opportunities in real estate, gold, oil, and silver I’m above average, but not great. And that’s because I’ve trained my brain to see opportunities in those areas.

So, instead of criticizing the readers who were close-minded (or even mean-spirited) about my advice, I encourage them to keep an open mind and find their own way of seeing investments most people miss. That’s how you get rich. People who refuse to open their minds to new strategies seldom become rich — which I guess is why there are more critics in the world than rich people.

Finding Your Magic Formula

One of the most important things my rich dad taught me was to never say, “I can’t do it” or “I can’t afford it.” Those thoughts are self-limiting, and it’s hard to find great investments when you’re basing your behavior on limitations. In today’s world, there are more investing opportunities than ever before. Why would anyone want limited financial results in an unlimited world?

One of the reasons I write about financial independence is so I can put forth ideas that challenge the way people think about investing. If you want the same old financial-planning dogma of “work hard, save money, live below your means, get out of debt, and invest in a well-diversified portfolio of mutual funds,” then my philosophies are obviously not for you.

My job is to stimulate your thinking, inform you about why rich people get richer, and encourage you to find the magic financial formula that works for you. I found mine, and I want you to find yours.

When we think of ways to get rich, most of us picture making tons of money, so much money in fact that we can live the rich life, where how much money we spend becomes irrelevant.

The truth is, that picture is flawed (to say the least). In recent years we’ve seen actors, former athletes and formerly successful businessmen who burned through tens, (sometimes hundreds) of millions of dollars.

But before we get into a debate, we need to agree on what we refer to as “saving”. And in that regard, I tend to favor Robert Allen, the author of Multiple Streams Of Income, among other personal finance bestsellers.

Here’s Robert Allen’s take on the subject:

There are two meanings for the word save: (1) to pay less for your purchases, as in “Safeway saves you more!”; (2) to create a surplus, as in “I need to save money for retirement.” Some people are good at the first save. They like to shop for bargains. But they are terrible at the second save. Wealthy people are great at both.

The second save involves taking that money that you refrained from spending and actually putting it to work (also known as investing it). Finding ways to save money can only take you so far.

I was recently watching a commercial for a Robert Kiyosaki seminar where he flat out says that “Savers are losers”. If you keep the money you save in a bank account, inflation will, slowly but surely, erode its value. If you put that money into a money market account, or a CD, you’ll barely keep up with inflation. That’s sticking to the first save.

When you look at it this way, Kiyosaki is totally right. Just understand that you’re not a loser not for saving, but for failing to invest what you’ve managed to save.

Actually, it’s hard to get rich without getting some sort of hold on one’s finances. And if you do strike it rich while your finances are a mess, your prosperity will likely be short-lived. Saving is indeed the cornerstone of financial success, but you can’t get rich through saving alone. It has to be complemented with investing for it to translate into financial freedom.

 - Robert Kiyosaki

The other day, I asked Mona, the president of The Rich Dad Company, what she thought of the rough draft of my new book, which is due out this fall. She took a deep breath and said, “I am disappointed in it; it lacks punch and leaves me wanting more.”

Her words cut like a knife. I felt like I had been stabbed in the heart. I didn’t respond. But once I got over my initial reaction, I was able to appreciate Mona’s candor–and her courage. I asked her what was missing and what we could do to improve the book. (And I’m happy to say that revisions are well under way.)

Unpleasant feedback is never easy to take, nor is it easy to give. We would all rather give or hear only positive feedback. Yet feedback, both positive and negative, is essential for personal growth, character building and business stamina.

The world is one big feedback loop. For example, when your CPA hands you your financial statement, he’s giving you feedback on how smart (or stupid) you are as an entrepreneur. When you step on your bathroom scale, you’re also looking for feedback. Many people don’t step on a scale or look at their financials for the same reason: They don’t want the feedback. They want to pretend everything is just fine.

In business, if your ads don’t increase sales, that’s feedback. If a customer walks into your store and walks out without buying anything, that, too, is feedback. Blogs are feedback.  My rich dad often told me, “There are two types of feedback: to your face or behind your back.” He frowned on the businesspeople who surrounded themselves with yes men. He said, “Yes men are dangerous people. Yes men are nice to your face but often stab you in the back.”

Feedback is felt physically. I feel feedback in my heart. Some people feel feedback in their throat and others feel it in their gut. The next time you feel your heart, throat or gut react to what you’re hearing, be grateful for the honest feedback and then grow from the experience. Face-to-face feedback takes tremendous courage on both sides. Cowards find other ways of communicating.

One of my most important tasks as an entrepreneur is to keep the door open for both pleasant and unpleasant feedback. If I don’t allow feedback, honest communication becomes polite, the company struggles and customers go elsewhere. If you want to be successful, step on the scale, read your financials and ask for feedback . . . good and bad.