Wisdom of Rich Dad

What It Is:
Quantitative easing is a strategy employed by a central bank like the Federal Reserve to add to the quantity of money in circulation. The premise (which is largely theoretical and untested) is that if money supply is increased faster than the growth rate of Gross Domestic Product (GDP), the economy will grow.

How It Works/Example:
To understand the rationale behind the strategy, it helps to look at the basic relationship among GDP, money supply and the velocity of money.

In general, GDP equals money in circulation (M) times the velocity of the money through the economy (V):

GDP = M * V

Velocity is the speed at which money passes through the hands of one person or company to another. When money is spent quickly, it encourages growth in GDP. When money is saved and not spent, the GDP of the country slows.

Through quantitative easing, the Federal Reserve tries to counteract falling velocity by increasing the money supply. It has two primary tools with which to do it.

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There’s a lot of talk out there about how entrepreneurs are ‘risk takers’. This is true. We are a unique bunch who will sacrifice it all in pursuit of a better life. Our unshakable belief in our own success makes us appear arrogant and reckless to outsiders.

However, in reality, successful entrepreneurs only take on very smart, calculated “risks”.  You see, there is a distinct difference between taking a risk, and acting in a risky manner.

Here’s an example of the two;

Scenario #1 -A neighbor comes to you looking for an investment for their new business. They provide you with a complete, detailed business plan. You review with them the market research and see that there is a potential market for their idea. You discuss the financials, they know how much money they need, where the money will be spent, and can forecast a return on your investment.

They’ve spoken with industry professionals and have lined up the necessary help they’ll need in getting their business started. You can see that a lot of thought, time and planning has gone into this business already. You decide to invest.

Is it a risk? Of course. There is a chance you may never see your money again, but there is also a chance you’ll make your money back ten-fold in the coming years.

Scenario #2- A friend comes to you with a great business idea. They just KNOW it will be a success because there are already 10 other big companies making gobs of money on the same idea. They’re sure the market is there, because if it wasn’t these other 10 companies would be failing, right? Their idea is a sure thing. They need your money to travel, so they can visit with potential clients and pitch their idea. You’re welcome to come along too – it’ll be a blast.

 They assure you this idea will succeed because they’ve heard the saying, “Do what you love, and the money will follow”. They love traveling and taking clients to expensive dinners, so this idea is surefire. You figure, “What the heck? No risk, no reward”. So you invest.

The latter happens all the time. It’s easy to start daydreaming about how much money can be made – easily. But this is a risky deal. The idea of “risk taking” isn’t license to make foolish decisions under the guise of being an entrepreneur.

Be careful with your money. Get all the facts before deciding to invest, or start a business. You need to feel confident that the investment is a good one, and not just a 50/50 shot.

The saying is true, and one of my favorites; “No risk, no reward”.  Just remember, your risks shouldn’t be based on luck, but rather planning and hard work.

The world how advertising is constantly revolving. With the advent of the internet many new forms of advertising have become available. These new forms and many old ways as well provide many opportunities for a creative person to get involved in the advertising business. Here are 5 ways that you can use to break into the business.

1. Advertising Agency: It used to be that the big ad agencies were the ones being paid all the bucks. But there is always a place for a creative mind in a field like advertising. And there is plenty of business to go around. And while small businesses don’t often have big budgets they do have a need for someone that specializes in the field of advertising.

That’s because nearly any business can benefit from a well run advertising campaign. One advantage of such a business is it can start out as a home based business. You will of course need the usual array of office equipment though. Experience in this type of business can of course be very helpful. But that experience doesn’t necessarily have to come from working in the field.

Many small business owners have had to design ad campaigns for their businesses. And while this cannot substitute for working in the industry it should provide you with a basic working knowledge. From there the rest is up to you.

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You might find it surprising to know that reading isn’t the only way to learn about personal finance. You can make learning about personal finance even more fun by watching a movie. That’s right! There are many movies that contain useful tips about money management.

So that you don’t have to go searching all over the Internet, I have put together a list of my 7 favorite movies for learning about finance. And I promise, these movies are NOT boring! Most of them cover a broad range of financial issues that hit all of us in a very personal way, because money is such a big part of our lives. Here is my list:

Wall Street

Wall Street is an iconic movie that has been a fan favorite for over 25 years. You can learn a lot from this old school classic. Who can forget Gordon Gekko’s classic quote about greed? Regardless of what Gordon Gekko thinks, greed is not good. Greed will get you in a ton of trouble in the investing world. Many investors have lost their shirts by chasing high returns no matter what the cost.

Glengarry Glen Ross

Con men are everywhere. Glengarry Glen Ross is about real estate con artists that will do anything possibly to rip their customer off. In this underrated classic, Al Pacino, Ed Harris, and Jack Lemmon use fake prizes and awards to con hapless investors out of their life savings. Be wary of swindlers. Thieves are always willing to steal, plunder, and rob in order to save their own necks. They usually prey after the elderly and those people in a dire financial situation.

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THE surging Australian dollar ranks as a far bigger influence on profitability than the threat of further interest rate rises, a survey of chief executives says, in a sign of the growing strain the currency is placing on many companies.

The Australian Industry Group CEO survey, to be published today, underlines the challenges of the mining boom by nominating the high dollar as the top concern of business bosses – on a par with preparing for an economic upswing.

The dollar – which has risen 10 per cent since early last month, eroding foreign earnings – was cited as the top influence on profits by 14 per cent of executives. Fewer than 5 per cent of the 378 chief executives nominated higher interest rates as a worry.

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From the “Rich Dad, Poor Dad” by Robert Kiyosaki, I learnt that almost on one financially comp, I need to generate decent income to cover the monthly expenses of my lifestyle. And it is not reliable income, but asleep income extremely that I can silent survive without having to work. And to generate asleep income, Robert Kiyosaki and his Rich Dad advise that we should let money work hard for us.

There are manifold ways to generate asleep income. We can generate asleep income by investing into stocks and bonds, correlative funds, physical estate, commodities and likewise investing in businesses. Robert Kiyosaki in particularly love using physical estate to generate asleep income.

What transcendent work for Robert Kiyosaki might not be the best for you. Before deciding which is the best asleep income generating investment methods for you, attendant are 5 greater factors which you might want to consider:

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