Wisdom of Rich Dad

Rich Woman, Kim Kiyosaki, talks about the different people and personalities you need to be aware of in today’s world. This quadrant will help bring awareness, and possibly, provide a strategy when talking to the different people who fall within this quadrant.

Lessons I learned from my mother:

1.) Start saving as early as possible. We can never be too young to start saving for our future. Mom started when she was 18. I, on the other hand, started at 17. Two things can happen when we start early: We can have a bigger retirement fund or we can retire earlier. Both are definitely advantageous. Whenever possible, I always tell the youth to start saving and investing as early as possible.

2.) Invest wisely. Mom’s portfolio consisted of real and liquid assets. She bought two pieces of property in the late 1990s and flipped them a decade later, earning her substantial profits. She invested in two pension plans from a defunct preneed company and received the maturity benefit just months before the company ceased operations.

She was able to take advantage of the high interest rates being offered during the 1990s and has had several double-your-money placements. She was able to ride the bull run of this century and went offshore to take advantage of the global growth.

Knowing that illnesses may eat into her savings, she bought a health-care plan and several life-insurance policies. She managed to maintain a balanced portfolio at any given time.

3.) Practice frugality at all times. I learned frugality by example. She not only stressed it, she lived it! She has this uncanny memory—she could remember how much we spent for household expenses. This resulted in a much-disciplined budget management. She doesn’t jot everything down but she knows when to cut down on unnecessary costs.

She once told me that she never regretted being very frugal throughout her life. She practiced delayed gratification and this practice made her appreciate and enjoy her wealth now.

4.) Failure must not stop you. Mom lost her entire life savings when the business she and my dad put up failed. But she was undeterred. It wasn’t the best of times but they managed to pull through. The failure just motivated her even more to build a better future for her and her family.

5.) Get a health insurance. As I mentioned, this is one of my mom’s proudest investments. Mom got herself and my dad health insurance early. Thus, they were able to maximize the benefit limits when the needs presented themselves—ovarian cyst, stroke and kidney stones. It also included all the blood tests and medical examinations that can reach several tens of thousands a year. Not having one would surely have put a big dent in her savings.

My mother is not a business-minded person. She never considered the small tutorial place she runs a business. Nothing glamorous in it but being self-employed managed to make her financially independent. I am proud of her for all her financial achievements. It does put quite a pressure on me to emulate what she has accomplished.

In time, I wish to impart money-management lessons to my children as my mom did to me. I hope to be a financial success like my mom someday; it would be the greatest repayment I can think of.

Kim describes her thoughts, decisions and fears of her first investment purchase. Listen in as she talks about the time it took to find the property and her fears of making a bad investment.

Kim discusses an article from the National Association of Woman Business Owners. This article talks about women business owners in the market and how the current economy has affected them and their businesses.

My passive income march is starting to take shape, I have found a couple of great resources and mentors that have been successful at creating their own Financial Freedom through passive income and I am studying how they achieved their success and applying the strategies myself.

As there are naturally a lot of people looking at their financial situation at the moment, with the changes in mortgages, house prices and inflation, I am reminded of a story about peoples choices when it comes to looking for a return on their investment.

Oprah Winfrey had invited Robert Kiyosaki to be a guest on her fantastic daytime TV show to talk about Personal Finance and Raising Your Financial IQ. At a questions and answers from the audience session, one lady raised her hand and asked the question to Robert Kiyosaki:-

” I have $10,000 to invest, what would you advise I invest it in?” Oprah quickly responds, ” Robert, would you like me to handle this one for you?” She then goes on to ask the lady why she feels it is necessary to ask someone how to invest money, when she should be learning about it herself.

Now I know some great Financial Planners and Independent Financial Advisers who are experts in their field and I have done in the past exactly what that lady did and simply asked their opinion on what I should do with my money. I have also bought shares in companies I do not know exists, how many of us willingly talk to a broker, or buy shares online in “XYZ” mining company, when in fact we have never even SEEN the mine. It is all fascinating!

I spent a day recently at a seminar of 500 women, all had their own businesses and what struck me was the high percentage of those women who had found their financial circumstances had changed beneath them by events such as divorce or redundancy that had left them with a life to rebuild and a financial status that was fragile at best.

The reason I have chosen to carry out my own investing is because it is the provider of not only a sound financial independence of my own and choices for my family, but because I do not see why I should ask someone else to look after my financial future above myself.

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source:http://witoo.wordpress.com/2008/05/24/why-do-people-ask-a-stranger-about-investing/