Wisdom of Rich Dad

In one way or another, we’re all thinking about retirement – saving our money for a bright future of exploring and reading and meeting new people. We’re aggressively watching our investments and cutting back on non-essentials, in the hopes of catching a piece of the pie someday. But what is it – really – that we’re hoping for? Are our expectations realistic, and where have we learned what to anticipate when we leave the workforce behind?

Hollywood

One word: Hollywood.

Since TV and movies became a popular source of entertainment, we’ve been fed idea after idea of what our retirement years should look like. We began anticipating our golden years as hassle-free and cash-laden. But it’s rare that spoon-fed morals and focus group decisions are truly representative of real life. Exposing these Hollywood clichés will hopefully bring the reality back to retirement.

Cliché #1: You’ll Live On A Beach-Front Property (As seen in “Office Space”)
Mojitos on a sunny beach-front property with a deck overlooking the ocean, as a reward for years of blood and sweat - this is how retirees are often represented on film. And the worries of civilian life are long left behind. The only real concerns are which pair of white beach pants to wear, and ensuring that the blender is still working.

But the reality is that, with the housing and lending markets in current disarray, we’ll be hard-pressed to keep our own homes – never mind those on facing the Pacific sunsets.

In actuality, soon-to-be retirees are clamoring to hold on to their current properties or – more commonly – considering downsizing, in the hopes of using any profit made from a house sale as expendable income.

Rural and isolated areas may become harder to come by, as condominiums and shared accommodations become the norm for retirees. Oh, you can still have that mojito – but there’s a greater chance that you’ll be sipping it on your 17th-story balcony watching the police direct traffic below.

Cliché #2: The Gold Watch (As Seen In “About Schmidt”)
We all want to be appreciated. And after 20, 30 or even 40 years with a company, it’s fair to expect some recognition – a dinner, an office party or even the overused cliché of the gold watch. We’d all like some form of appreciation for years of honesty and dedication.

But the reality of the matter is that the length of careers is becoming shorter and shorter by the year. Even Baby Boomers aren’t lasting in their workplaces as long as their parents or older siblings did – a 2008 survey by the Bureau of Labor Statistics revealed that those born in the later years of the baby boom averaged about 11 jobs between the ages of 18-42, while the older generations averaged five or less. And with shorter career life spans comes less incentive for large-scale recognition.

While we won’t have statistics on the current generation’s professional life for quite some time, if the labor markets continue down this road you’ll be lucky to get a handshake when you hit 65. (Even if the economy is unstable, don’t worry.

Cliché #3: Shot Three Days Before Retirement (As Seen in Any ’80s Action Movie)
For some, this may seem like a great escape – for others, the ultimate cop-out. But the cliché of not having to face retirement at all is becoming less and less likely. The truth is the length of life expectancy has been growing consistently for generations.

In the U.S. in 2010, the average life expectancy is currently 78.2 years – 75.6 for men, and 80.8 for women. That’s almost 10 years longer than just 50 years ago, and almost 15 years longer than the age most people expect to retire (65). And let’s not even consider colonial times, when life expectancy was reportedly only 45 years. Try building your Roth IRA for that one.

So, even when you throw yourself a retirement party with the three friends you have left, in your one-bedroom condo, it might be a good idea to keep the want ads nearby – you never know when you’ll need a little part-time supplementary income.

The Bottom Line
While the concept of a traditional retirement – or even a glamorous one – is not dead, it does take a more aggressive approach on your part. As has been said many times, the key to a strong retirement nest egg is to start saving early and be unforgiving in your dedication to making that pot grow!

How many times have you heard people complain about taxes? Eventually they get tired of just complaining about how much money they pay in taxes and how much money to spend on the taxes of the rich do not pay. It can be frustrating, not knowing that people with less money get fewer breaks than people with a lot of money? It ‘frustrating because it is not right. And if you happen to be one of the persons on the tax rate low-income/high side, then you can verify resentment.

Well, the fact is that no amount of grumbling and complaining will the powers that suddenly things just for you. Because the Golden Rule: “Whoever has the gold makes the rules.” Chances are, make the rules in their favor. Retain all tax benefits of good for them. They will tell you that it is simply not enough money for everyone, even if you watch people move in so many dearCars> and eat in luxury restaurants. Even politicians who promise tax relief for the oppressed masses – even those who are sincere in their desire to help the average working hard – they are limited in their ability to influence the system.

Therefore we must act. Do not be one of the oppressed masses. If you want more money, you should watch yourself. And yes, you can also get more money in the form of tax relief.

In his book Rich Dadseries, says Robert Kiyosaki understand what makes the rich be rich, and it does. Except you do not understand. He did not even understand, because he had a rich “daddy” to tell him the secret of wealth investment. Especially in real estate.

“One of the reasons I chose to work mainly in B and I quadrants are the tax advantages,” he said in his book “Cash Flow Quadrant. Cash flow Quadrant, after which nominated the book is full of his fatherSchematic of four different types of people, as regards the place where they get their money and their philosophy about the fundraising that curiously matches. In other words, people who are employed by a set of values so that people who are self-employed have another.

Kiyosaki prefers to belong to society and Investment quadrants, because, he says, where is the money.

You know the saying: “If you can not beat them, join.” This is good advice, especially ifyou guys want to beat the rich. It’s actually great news that they get tax breaks so much. This means that when you become one of them, you get the same tax benefits, if you know how.

Here’s how. It has become one of them using the investment to make your money multiply. You can do this while remaining in quadrants and ES if you are well paid, but Kiyosaki recommended to join the B quadrant, by building a business system that work primarily onalone, without much input from you. Then you can keep or sell, but you must invest.

Invest, preferably in real estate – apartments, holiday homes, land and others – is your ticket to financial freedom.

The following is the story of how my wife Kim, my best friend Larry Clark and I, began our journey from broke, to rich, to retired in less than 10 years When Kim and I started, we were nearly out of money and filled with doubt. We all have doubts. The difference is what we do with those doubts.

In December 1984, Kim, Larry and I were on a skiing holiday. At night we would discuss our plans for the future. Kim and I were on our last few dollars and Larry was in the process of building another business. On New Years Day, we tried to set some goals. Larry wanted to do more than just set goals for the coming year, he wanted us to set goals that changed our lives.

“Why don’t we write a plan on how we can all become financially free?” he urged.

I had talked about it and dreamt about it. But the idea of being financially free was always in the future, not today.

“Let’s write it down,” Larry said. “Once we write it down, we have to do it, and we’ll support each other on the journey.”

Kim and I looked at each other doubtfully. “It’s a good idea but I think I would rather just focus on surviving for the next year.”

“Come on,” said Larry. “Let’s go for freedom. I don’t want to spend my life working just to pay bills. I want to live. I want to be rich. I want to travel the world while I’m young enough to enjoy it.”

I recalled the words of my rich dad: “The biggest challenge you have is your own self-doubt and your laziness. It is your self-doubt and your laziness that define and limit who you are. It is your self-doubt and laziness that deny you the life you want.”

It was time to choose. “OK, let’s set the goal to be financially free.” That was New Year’s Day 1985. In 1994 Kim and I were free. Larry went on to build his company, which became one of Inc. Magazine’s fastest growing companies of the year in 1996. Larry retired in 1998 at the age of 46 after selling his company.

How did we do it?

Read the rest of this entry »

Due to the litigious nature of our society and the rising cost of vehicles, car insurance rates are hefty throughout the nation. The bad news is that insurance isn’t likely to lessen in price any time soon. The good news is that there are things that you can do to minimize increases and/or lessen the burden on your wallet.

Let’s take a look at 8 tips you can employ to save your driving dollars.

1. Insure Multiple Cars/Drivers 

If you obtain a quote from an auto insurance company to insure a single vehicle, you might end up obtaining a higher quote (per vehicle) than if you inquired about insuring several drivers and/or vehicles with that company. This is because insurance companies will offer what amounts to a bulk rate because they want your business, and under some circumstances, they are willing to give you a deal if it means you’ll bring in more of it.

To obtain a discount, ask your agent/insurance company to see if you qualify and get a quote. Generally speaking, multiple drivers must live at the same residence and be related by blood or by marriage. Two non-related people may also be able to obtain a discount; however, they usually must jointly own the vehicle.

Incidentally, some companies may also provide an auto insurance discount if you maintain other policies with the firm (ex. homeowner’s insurance). Check with your agent/insurance company to see if such discounts are available and applicable.

Read the rest of this entry »

You can save big bucks by skipping unnecessary financial products and services.

There are many things that people buy, sometimes repeatedly, that are a waste of money or just a bad value. Often, you don’t need them at all or you can opt for less-costly or free alternatives. Take a pass on these financial products and save hundreds or even thousands of dollars.

Skip it: Collision on older vehicles
Save: $300 a year, based on national averages in 2007

If you have an accident, collision coverage reimburses you only up to the value of your car, no matter how severe the damage. So at some point, the cost of the coverage might approach or exceed the maximum the policy would pay on a claim. You might consider dropping collision once its cost equals 10 percent of the car’s book value.

Do this instead

Self-insure by putting away a fixed amount each month to cover unexpected losses. Decide whether you should keep comprehensive coverage. Typically less costly than collision, it reimburses you for theft and nonaccident damage, for example, if a rock cracks your windshield or a falling tree limb dents your hood. But like collision, it won’t pay more than the vehicle’s worth, so weigh the cost.

Read the rest of this entry »

Why do big life events – marriage, birth of a child, graduation – always seem tied to huge financial events, such as buying a new house or new car? It means that we experience major emotional upheavals just as we’re trying to navigate a new money challenge.

Some couples have decided they don’t want to take it anymore. Instead of getting married and buying a house simultaneously, they’re putting their wedding off so they can take full advantage of this appealing real estate moment. Renia Lusby, 26, and her fiancé, Kristopher Butler, who live in Humble, Texas, started looking for a home as soon as they got engaged last September. “We noticed it would be more financially responsible for us to put one or the other on the backburner,” says Lusby, a special events planner for the University of Houston.

They prioritized their home purchase because they could take advantage of the homebuyers’ tax credit as well as the low interest rates and relatively low prices. They purchased their three-bedroom home in May and moved their wedding to next July. “Now we can take it slow and enjoy [the planning],” she says. Changing up the order also means they can save on nuptial costs, by inviting family members to stay in their new home instead of renting rooms at local hotels.

Read the rest of this entry »