Wisdom of Rich Dad

For most people, wealth does not come in a windfall but instead gathers gradually as a result of years of hard work and diligence.

Bankrate readers offer their tips for growing wealth. You’ll find no winning lottery numbers or surefire stock recommendations among them, but all are sensible suggestions for savings.

1. Grow Your Own Food

I have a plot in our local community garden that I share with two of my friends.

It is a fun, inexpensive hobby for us — plus it keeps us active and teaches our children important life skills.

We keep our 20- by 30-foot parcel planted year-round, and it provides our three families with fresh, organic produce.

– Anonymous

2. Set Limits and Stick to Them

I try to save at least three to four part-time paychecks so that I can elect to make a hefty payment on a credit card account and buy myself a little something I waited to get.

Also, I have inventoried my home and gathered up all half-full or almost empty bottles of lotions, soaps, hair creams, cleaning products and vowed not to make a purchase until we absolutely had not one drop of a particular thing. So I have not been to the store to buy these items — including makeup and colognes.

I limit my driving and only buy $20 (of gas) at a time about once a week …so $80 a month. Not an ounce more.

As for groceries, I am using only fresh or frozen vegetables. At the store I purchase only the item that is $0.99 per pound and pull out my cookbook to find an exciting way to cook it and make great meals. Chicken can be cooked 100 different ways.

– Sharon Dorsey

3. Buy Savings Bonds

I have always made a 10 percent deduction on my pay.

If you do it every week, you will see that you don’t miss it. After a few years it can really accumulate into a nice sum of savings. The best vehicle is savings bonds. You buy them and just hold them.

– Michael de Gennaro Read the rest of this entry »

I was disappointed (and oftentimes wondering) why other people were not interested in investing in businesses or projects. Investments that I had made money from, and also investments that I had not made money from (yet). I understood if it was because of the latter reason, because … who am I, after all? But the former?

I was enlightened after reading Robert Kiyosaki’s Cashflow Quadrant. It appears that there are many kinds of investors in this world. Interesting. Can you identify which kind you are (see below)?

The first kind can be categorised as the “Nothing” investor. De nada. No money to invest. All your income is spent. For some, even the ones who ‘look rich’, they spend more than their income!

One of my friends told me that he had a neighbour (a senior government servant) who always borrowed $50 cash from him at the end of the month. He always ran out of cash to give his school going kids their school allowance, before the montly salary is received!

Another senior government officer bought a $60,000 car by taking a bank loan (with a higher interest rate of 6%) instead of the government loan (at 4% reducing balance rate) because the government loan was only $45,000 and he had no savings to pay the difference.

It seems that 50% of adults are in this “Nothing” category. It doesn’t include you, of course.

The second category is the “Borrower“. As the name indicates, you are in this category if you borrow your way through life. You borrow money from your credit card for your marriage expenses (yes, a true story!). Two babies later, your credit card loan still has not been paid.

Your favourite exercise? Shopping! Girls are usually in this category. They just can’t help it when the shoes, handbags, watches etc are at 70% discount. Sometimes even without discounts (I mean, the shoes and the handbags need to be colour-coordinated, right?)

I remember a friend. He had just successfully obtained a $2 million loan from the bank for a new business. With the money from the bank, he immediately (but not wisely?) bought a Mercedes for himself, and a Honda for his wife. One year down the road, the business was not going on as planned (especially the financials). Now you understand how some ‘rich‘ people lose their Mercs overnight? One day the Mercs is in the car porch, the next day it’s missing.

Another friend bought a $360,000 condo one day. From a bank loan. Two years down the road, there was a ‘professional accident’. His company closed down. He lost his job. Anyone would like a condo for sale?

The problem if you are a borrower, is not the amount of money that you have as an income. It’s just that you have poor money habits. Poor habits lead to poor actions, which lead to poor results.

The third category is the “Saver“. You are a saver if you save a little money every month, and keep it in a savings, or Fixed deposit (FD), or Certificate of Deposit(CD), account.

Many save not to invest. But to consume (a vacation, a TV, a $15,000 bicycle). They like cash, not credit or debt.

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Defining Investing Education

Principled investing is a misnomer these days. As facts say, most investors today wish that they want to learn more about investing. Therefore, common financial literacy is not so common after all. The need for people to be educated in a dynamic system should be taken into account. Thankfully more and more people are finding online education advantageous in improving their investing education.

Investing education is an abstract idea for most people. This is because that they value investment as a way to save money with the expectation that their finances should advance. Yet what they don’t see is that there are methods where investing can become an instinctive exercise to achieve financial freedom. This entails developing the perspective to find investing opportunities where most people find nothing. A quick refresher on investing education will teach students to change the way they look at different investment opportunities, risks, and rewards.

Investing education is also important in having a better read of today’s financial situation. As an analogy, anyone can enjoy a delicious cheese cake. But only informed people can dissect what is the real value of the cheesecake according to its taste and other characteristics that the uninformed eye cannot see. Therefore this education is a form of shaping and training that makes a student notice what he does not see in his first look.

Importance of Online Education

Online learning is in the center of the purposeful information marketplace today. Students of distance learning are seen to be highly motivated individuals who are able to adjust to the dynamics of different training materials and mediums that will allow them have a unique view of what education and training is all about. This dwells more on the practical and quantitative goals. This is evident in continuing internet based learning where the student is updated with the latest trends according to his field.

With the latest trends brought by the internet, online investing education is a practical side track to one’s personal development. Just imagine any full-time worker seeking to increase his finances to ultimate financial freedom. While he is severely tied to his career, he can scotch over some time to invest in his personal training. Web based learning then becomes an efficient method to acquire such knowledge because of its flexible and mobile advantages. Time saving and personal management is in itself a practical application of the objectives of online education and 21st century education.

Mindset Development through Investment Education

A positive impact that is not readily observable is the relationship of investing education and developing a millionaire’s mindset. Smart investors are able to find ways to generate income without much work. The thought that runs through a millionaire’s head invokes an encouraging level of attraction that will allow money to come to an individual. Investments should not be a methodical tool but a rational decision led by an instinctive millionaire’s mindset.

Everyone can become a smart investor through constant investing education. As you will learn smart investors completely do the opposite things and would rather be out leading. Leaders in the investment game are usually the risk takes that leave the average investor guessing. Planning ahead and thinking three steps ahead is one of the leading principles of investor education.

Investing education through online learning will teach you not only the methods of becoming a smart investor, but the mindset shift that will give you the instinct to be a smart investor and a wealth creator. The bottom of it all is that it should not be about the rules of the game. Instead, smart investors look at these rules smile at it and go the other direction; such a nugget of knowledge from 21st century educators.

About the Author: Robert Taylor (http://wealthcreationeducation.com) is a free-lance writer, journalist and educator. He is passionate about investing education to achieve success and financial freedom. He believes that everyone should get a wealth education to succeed in the 21st century. 

What are the top skills that should be taught to every man, woman, and child who enters our education system? Here are a few that aren’t taught at all:

1. How to Make People Like You and Network

For a skill that affects every area of your life (from dating, to family, to work), it’s amazing how little people know about this. There is great power in knowing you can reach out to your network whenever you have a problem to solve, to be able to reach key influencers at conferences and meetings, to make an impression on audiences, to project confidence and trustworthiness, and to make friends with other successful people.

Required reading: How to Win Friends and Influence People and How to Talk to Anyone: 92 Little Tricks for Big Success in Relationships.

2. How to Speed Read and the Power of Audio Books

Speed reading and speed comprehension is real. The nominal investment of time it takes to learn pays off in spades for the rest of your life. The same goes with audio books. If you spend an hour per day in the car learning instead of cursing at other drivers, you will have attended the equivalent of an entire semester course.

Required reading: The Psychology of Achievement by Brian Tracey

3. How to Set Goals and Manage Time

Want to know how to get anything done in life? Our school system doesn’t feel that this is worth teaching. If you have ever found yourself being busy all day only to wonder what you accomplished at the end of it, then you need to learn this.

Required reading: Getting Things Done, Eat That Frog, No B.S. Time Management For Entrepreneurs

4. How to Read a Financial Statement

Robert Kiyosaki is fond of saying that the rich teach their children how to read financial statements and the poor do not. Schools have never been very good at teaching people how to get rich, probably in no small part because professors are generally poor and wouldn’t know how to teach it.

Required reading: Cash Flow Quadrant, or this blog article

5. How to Negotiate and Use Contracts

If you want to accomplish anything of significance you’re going to have to work with other people. There is a certain art to structuring good contracts and measuring results. School teaches you none of this and most people have to learn it from the school of hard knocks.

Required reading: Donald Trump’s The Art Of The Deal

6. How to Save and Invest

People are never taught how to build wealth, which is why the nation is in credit card debt. Moreover, people are never taught the power of passive income streams and how to really break free from the rat race of working 9-to-5. There is a whole body of literature on this topic which is never even touched upon in traditional education.

Required reading: The Richest Man In Babylon, The Millionaire Next Door, or Ben Franklin’s The Way To Wealth

7. How to be Successful in Life

Some people have devoted a lifetime to understanding what makes people happy and successful. There are the big three: health, wealth, and relationships. People need to find what they really want to do with their life. There is a lot to learn here!

Required reading: What To Say When You Talk To Yourself, When I Say No I Feel Guilty, Think and Grow Rich, The Way Of The Superior Man

8. How to Spread an Idea and Basic Marketing

The basics of marketing are something everyone should understand. Even if you don’t think you’re in marketing, you’re in marketing. If you have an idea at work, or want to get a raise, or want to convince your kids to go see a movie, then there is something applicable from the marketing world.

Required reading: Dan Kennedy’s The Ultimate Sales Letter, CopyBlogger, The Psychology of Influence

Source:
Lifehack.org August 15, 2008

President Barack Obama’s  comments, made with new Treasury Secretary Timothy Geithner at his side, came in swift response to a New York Times report, which reported employees of the New York financial world garnered an estimated $18.4 billion in bonuses last year. The figure, from the New York state comptroller, drew prominent news coverage.

“Outrageous.”

That’s President Barack Obama’s one-word reaction to a report that Wall Street employees got more than $18 billion in bonuses last year.

Said Obama: “That is the height of irresponsibility. It is shameful.”

The president said he and new Treasury Secretary Timothy Geithner will have direct conversations with corporate leaders to make the point.

Obama said there is a time for corporate leaders to make profits and get paid bonuses but now is “not that time.”

“Outrageous” is precisely the word. The same people who two months ago came to Congress with hats in hand and took a boatload of taxpayer money are now doling out billions in “bonuses”? Bonuses? Aren’t you supposed to get a bonus when you do something well?

OK, here’s your pop quiz of the week. The terms: inflation, recession, deflation and depression. Are they economic terms or are they psychological terms?

Answer: When you let them operate together as the “little voice” between your ears, they become the same thing and you lose. The key phrase is, “when you let them.”

It is no secret that in any difficult economic period, a lot of people get hurt and some people get very rich. Either way, it is the same economy, but a different psychology. The question is, Which person are you going to be?

Let’s look at the terms and see how they apply.

Inflation: How many times have you been overconfident, or even arrogant? What happens? Sooner or later, like an asset with value pumped out of proportion, the bubble bursts.

Correction: Stay humble and connected to clients, associates, friends and their needs. Continue to always serve first.

Deflation: Ever been disappointed? Not gotten the outcome you wanted? All your effort into a deal goes for naught when your prospect chooses another vendor or alternative. The money in your bank account is deflating. Do not rest on the laurels of yesterday. The best way to keep from deflating is to keep inflating through nonstop promotion, serving and selling. Keeping the pipeline and your daily calendar filled with revenue-generating activities keeps your energy up.

Recession: Even though the government is undecided about whether this is happening or not, you and I know it’s old news. How about you? Ever feel like pulling back? Ever get tired of doing the same old thing? Ever have your energy level and passion level recede? And when it gets bad enough, have you ever felt like going back to bed and turning the electric blanket up to “womb” and forgetting about it? If you said no, you are lying. We have been there more than once. Now we are talking Depression.

The No. 1 strategy to stave off all of these little voices and economic conditions is the same. It’s called Little Voice Mastery. It is gaining control of the war between your ears that takes you on an emotional roller-coaster ride every time you watch the market swing or hear the next politician or economist profess their confusing and alarmist rhetoric.

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