One of the key lessons we learn in life is that it is important to save. There is a big difference though, between what we learn and what we do and many people find saving difficult.

Those people who feel guilty about not saving will be interested in a concept being promoted by Robert Kiyosaki, author of Rich Dad, Poor Dad, who suggests that savers are losers. Before all non-savers get too comfortable with that proposition, his point is not that everyone should spend rather than save. Saving implies putting money away on a regular basis into a bank account where it will earn interest and slowly increase in value with compound interest.

There are three reasons why you could argue that people who save are losers.

• Firstly, the return on your savings is reduced because you pay tax on the interest earned.
• Secondly, over time, the effect of inflation will reduce the purchasing power of your money. In other words, if you save $100 and choose to spend it ten years from now, you will not be able to buy as much with your money as you can today.
• Thirdly, bank deposits offer a low rate of return when compared with other investments. That is because bank deposits are seen to be less risky than other investments.

The point made by Kiyosaki is that if you really want to get ahead financially, you are better to invest rather than save.

Investing in growth assets such as property and shares or investing in a business of your own should give you better protection against tax and inflation, and a higher return over the long term.

In my view, the best approach is to do a little of everything; invest for a good return, save for security and spend to enjoy life.

I would like to announce my latest web property – Real Estate Investment Game.

The game is about buying and selling virtual property. You are presented with virtual apartments in different looks, along with various data, including market value and tenancy count. You can also see who owns the apartments and you can decide whether to buy the properties or not. To increase your apartments’ attractiveness, you can upgrade them with various upgrades, such as apartments’ maintenance to keep yours squeaky clean (and have better market value.)

You can play with either real money or play money.

The benefits of playing real estate online game

I love the concept of this game because it allows you and I to buy or sell virtual properties with regard to the simplified analytical data, such as an apartment value trend over time. From the data, you can decide whether to buy a property, keep your property or sell your property.

This way, you can learn the basics of real estate investment, as well as hone your real estate investing skills – all are done in an interactive an fun environment.

Why playing games if all you want is to learn the basics? Playing game increases the effectiveness of your learning – Please read this article about using games for fast-learning process.

Real money vs. play money

You can choose your game: Play just for fun with play money, or play for money with real money.

Obviously, play money refers to free version of the game, and real money refers to premium version of the game – Please note, both games have exactly the same game systems.

Why bother playing with real money if you can have all the fun playing with play money? The answer: make money online.

Yes, you can make money online through the capital gain of your owned virtual properties, just like in the real life real estate flipping.

I can’t describe this real estate game better than trying the game yourself. Of course, sign-up is free of charge

Robert Kiyosaki likes real estate investing is because real estate touches each part of his financial statement.

Starting with his best-selling book Rich Dad Poor Dad and continued in many of his subsequent books, Robert explains how real estate gives cash flow to his income statement and on the expense side of the income statement he’s able to deduct the property’s depreciation as an expense.

When seen from the balance sheet, he’s able to gain appreciation on the asset side and the leverage provided by the bank rounds out the liability side of the balance sheet.

Through a property management company you can also access the four parts of the financial statement.  Here’s how:

Balance Sheet:  Asset-side

Every property producing monthly rent is an asset.  It is possible to sell the rights to manage the property to another property manager for a lump sum of money.

Balance Sheet:  Liability-side

Robert uses his banker’s money aka leverage in order to purchase a large property with only a small percentage as a down payment.  When the property goes up in value he is able to keep the entire appreciation amount without having to share it with the bank.  He can use leverage and still get the benefit of 100% of the appreciation.

In the property management business, leverage is achieved through controlling the income of a property.  A property that is producing $500/month in rent gives a property manager $50 in income.  If the property manager feels that $500 is too low for the area, the manager can increase the rents by 10% to  $550 and the management company’s income will go up 10% accordingly.  How many companies can increase their income by 10% without a causing uproar among its clients?

Income Statement:  Income Column

As a property manager, you take your 10% management fee directly off the top after the rents have been collected.  Here again, if the manager feels that rents are too low, the manager simply raises the rent and increases the income to both the manager and the property owner.  It’s win-win!

Income Statement:  Expense Column

While Robert Kiyosaki is able to depreciate the building as an expense, a property manager cannot take this tax advantage because a property manager doesn’t own the building-the owner does, however, a property manager is able to make money off the expenses incurred by the owner of the property.

Let’s say that a tenant calls to say that the plumbing underneath the sink is leaking.  The property manager sends out his repairman to fix the leak.  The repairman sends a bill to the property manager for the $12.00 plumbing parts plus $30.00 for his hourly rate.

The property manager now marks up the bill by lets say $10.00 and now charges the property owner $12.00 for the parts and $40.00 for the repair time.  The $10.00 is for the property manager’s orchestration of taking the call from the tenant and sending out the repairman.

Now multiply this scenario by the management of 200 properties and you’ll find that expense mark-up is a significant source of a property manager’s income.

As you can see real estate allows an investor to utilize all four parts of a financial statement.  As a property manager, you can piggyback on the owner’s shoulders and receive some of the same benefits of cash flow and leverage and you can actually profit from the property in ways an investor cannot i.e. expense mark-up.

And here’s the best part and the prime example of a property manager’s ultimate leverage:  the manager isn’t responsible to the bank for making the payments on the mortgage.  The owner is responsible!  The property manager is able to make money off the property without being personally responsible to the bank for the asset that creates all the money in the first place.

What a concept!

Robert Kiyosaki’s Cashflow 101 game is a great learning tool. The following hints have been compiled so that you can get the most value you possibly can from the game. These tips apply to real life as well, so keep your heads up.

1. Don’t cheat. The purpose of the game Cashflow 101 is for you to learn so if you cheat you learn to cheat. Why make money illegally when it is so easy to do it legally?

2. Read the rules. You should especially read the three-hour millionaire piece on the back of the Cashflow 101 rulebook. See also Robert Kiyosaki’s Hot Tips page that comes with the game. Know the legal side of things and listen to the advice of professionals.

3. Find learners to play it with. Find people who want to learn more about investing and money to play with. It is wholly different to play with people with the same money and financial interests, than family and friends who play with you because no one else would. Some action is better than none, but better yet is someone motivated to the action for his/her own personal reasons.

4. Know there will always come another deal. If you haven’t got interest in a deal at this very moment, know that the next deal of the decade is around the corner (or the next card in the deck).

5. Investigate your options. Don’t let a shortage of cash let you out of great deals. There are other people in the game that might be interested in the deals only you’ve got access too.

6. Learn to share. Share deals – split the cost and the return if you feel the risk of borrowing the money is too great.

7. Understand the power of leverage. If that $1 deal comes along and you don’t have any cash, borrow if you must, but take it. This is just one example of how you can leverage of the bank’s money for extraordinary returns.

8. Have backup in a calculator. Yes, you might know your sums pretty well, but it does not hurt to have a calculator handy for estimating how long it will take you to get out of the rat race.

9. Understand potential of grey areas in rules. Yes, rules and laws do not cover everything so there might be some loopholes. But rather than using loopholes, set up a contract that at least two parties can agree to that is a win-win situation for both. Do not see the absence of rules as an obstacle, but rather see it as an opportunity.

For the advanced player:

10. Play it real. Change the job cards to the actual jobs that some of your Cashflow circle members has and see how different people would get out of your financial situation. Example: Job Title – Store Checkout Clerk, Salary $1,500, Taxes $300, Monthly Cashflow $150, etc.

11. Play it real II. Change the Big Deal, Small Deal, Doodad and Market cards to reflect situations that you have been in personally, or where you might land in. Example: Market Card – Lose all assets due to litigation; Doodad – Buy new computer for $1,000 monthly expenses goes up by $150; Small deal – Buy stock in a small-cap company (market card might either quadruple your money or lose your whole investment); etc.

12. Teach and learn. There is always some area where you will be better in than others – why don’t you teach them how they can get better at it. Give and then receive. Allow others to teach you in areas where they are more skilled than you.

When I start talking to people about building a passive income business by following the teachings of financial freedom guru Robert Kiyosaki, I immediately hear about people’s plans for buying real estate.

Anyone who has read the book Rich Dad, Poor Dad thinks that Robert Kiyosaki is all about investing real estate and buying rental or commercial property in order to achieve the financial freedom of their dreams. So, they instantly start putting all their money into real estate.

Reality check: That’s not book’s message. I try to listen patiently (after all I also believe that real estate can be a great investment vehicle), but the reality is you need a solid plan to achieve financial freedom, not a one off strategy.

Authors Robert Allen, Robert Kiyosaki, David Bach, and many, many talk about building multiple streams of passive income, that means having more than one investment vehicle, and making sure all those vehicles deliver passive income.

For beginners: passive income is income that comes in day in day out without you having to work to get it. Put simply, you are not trading hours for dollars. A true passive income business is one that if you were to leave it alone for a period of time, such as a year, you could return and find it more profitable (or at least generating the same level of income) as before you left. Passive income investments are the true path to financial freedom.

So what is the principle that Rich Dad truly talks about. He calls it the Power Investing Principle.

1 – Start a part-time business for the cashflow & tax advantages.

2 – When the market is right invest in real estate. (Now is not the time.)

3 – Invest your excess cash from the real estate in paper assets.

Unfortunately, a lot of people jump into step 2, real estate, without a lot of background knowledge about how to make that investment a lucrative one.

Here’s a clue, the property needs to generate passive income (that means it should be putting money into your pocket not taking money out). Capital gains (betting on an increase in value) should be a bonus not your sole reason for buying.

One of the first steps in building a solid passive income plan is to identify how you plan to generate passive income. The plan should include a number of sources including businesses, real estate and paper assets. The reason for this is to create a stable platform on which to build financial freedom you need all the elements.

Now, lets go back to the power investing formula and look at number 1: Build a business. Why do you want to build a business first? Simple: businesses provide the financial backing (cashflow) to support real estate investing. Makes sense right?

While there are only three steps in the power investing principle, you need to take the time to understand the systems behind each one. For example, master the business building system then move on to the system for residential real estate investing.

Taking it step by step will lead to prosperity and reduce your risks along the way.

Robert Kiyosaki talks about:

• The loser’s mentality.
• “If you can’t control your emotions, you can’t control your money.”
• Everybody wants to go to heaven, but nobody wants to die!
• “Why doesn’t our school system teach us about money in school?”
• “You know why they call brokers, brokers?”
• Understanding the 80/20 rule – Kiyosaki style.
• What the church will tell you.
• Are you in the right relationship to be wealthy?

Most of us know what life insurance is: you pay a monthly or annual premium and in return the insurance company pays your nominated beneficiary or estate a lump sum when you die.  Over the years life insurance has grown, with a multitude of policies to suit nearly every kind of need.

1. Buying Life Insurance From Mortgage Lenders When Arranging A Loan

Another common mistake is buying life insurance from a mortgage lender or bank who is lending the individual money to buy a home. Banks like to cross sell a variety of products to their customers, and when individuals seek financing for the purchase of a home, they suddenly become a captive audience to the bank who is making the loan.

The financial institution will try and add on a variety of insurance products in addition to the mortgage or loan they are making, and the deals on offer may not always be the best deals that can be picked up were the individual to approach an insurance adviser or a specialist.

It is better to buy life insurance from a specialist financial adviser, largely because they have a better understanding of the products on offer, and how they compare to rival products and probably have a bigger offering.

Individuals should also not be afraid to make an adviser work for their money and feel no pressure to commit. Advisers may be commission driven and financial products such as life insurance provide remuneration to advisers through a commission structure.

2. Life Cover through superannuation fund providers

Life insurance through your superannuation fund may seem like an easy option, but just make sure you read the fine print.

A life insurance policy through your super fund may not cover you for the right amount. This means that if something does go wrong, you may be severely underinsured, leaving your loved ones with insufficient funds during an emotionally turbulent time.

3. Buying Life Insurance directly without underwriting

Life insurance products sold directly without underwriting, often sold aggressively via television advertising, may cost double compared to equivalent cover which is fully underwritten.

Another point to note is that non underwritten types of life insurance policies often have exclusions on previous medical history.

Speak to your trusted insurance adviser about your personal life insurance needs and compare different life insurance quotes.

I think many of you would agree that a lot of us are employees. We have a definite working time schedule. We have a boss. We work on a particular role. Basically, we work hard to sustain our day to day living.

But if you want to achieve financial freedom, you should not just work hard but work smarter! Yes, you will earn more by working harder. You will work even harder if you got promoted because of the additional responsibilities and tasks that will be assigned to you. You will become probably rich because of overtime and pay raises but definitely you would sacrifice a lot.

You will risk your health because of stress. You will lessen the time for your family and friends. In short, you will not enjoy the fruits of your hard work if you will only just work harder. Added to that, the government is your number 1 beneficiary if you work harder. Your pay gets taxed first even before you get it.

Don’t just work hard, work smart too. How to work smart? Here are some of the the things that you could do to work smarter!

Work like a smart entrepreneur. If you have the capacity to become an entrepreneur, start a business. An entrepreneur leverages his resources and hires people who are smarter than him to work for him. Yes, he will work but on the supervisory level only. He delegates tasks and he gets rich by doing it. These are the tactics of taipans and tycoons.

Learn financial intelligence. If you would just work hard and even harder, you will definitely end up burnt out of your work. If you are financially literate, you would accumulate assets while you are working. And as these pile of assets accumulate over time, it would be sufficient to provide you with your needs without working. Choose to be the ‘rich person’ as Robert Kiyosaki said and not the ‘poor’ and ‘middle class’ persons who buy liabilities they think are assets.

Work for passive income. As I already mentioned in previous posts, passive income is your money working for you. Try to work little by little for passive income while you have your job. And as your passive income grows, then that would be the time to go full time for it.

Ultimately, working smarter is shifting from either the Employee (E) and Self Employed (S) quadrant of the Cashflow Quadrant to either Big Business Owner (B) and Investor (I) quadrants.

Admit it — at some time in your life, you’ve said to yourself, “I wish I was rich.”

That desire is not a crime — but it may be leading people to waste their money, and their time, at a popular weekend workshop we’ve been investigating.

The workshop is called “Learn to Be Rich” — maybe you’ve seen the ads on the Internet, transit, or heard them on the radio? They feature Robert Kiyosaki, author of Rich Dad, Poor Dad — one of the bestselling financial help books ever written. And the workshops are popular — rolling into towns across Canada every weekend, filling ballrooms with people eager to learn how to turn around their financial fortunes.

People are told they will learn valuable skills in real estate development, or how to play the stock market. But at Marketplace, we were hearing complaints about the three-day workshops (that cost $500), so we decided to enrol in one on real estate.

The problems started within the first half-hour, where our instructor told us we weren’t, in fact, going to get the tools needed that weekend to get rich. Turns out, this weekend workshop was just a primer — we really needed to sign up for more advanced courses. And the cost for those? A mere $12,000 to $45,000!

But there was to be no discussion of the price — our trainer told us if we didn’t like it, he would tell us to leave.

In fact, throughout the weekend, we felt bullied and pressured to sign up for the advanced courses (where the real money was to be made). There was some instruction, but when we met with real estate lawyer Bob Aaron, he called what we were taught “bad advice,” and said many techniques were just plain “dumb.”

To make matters worse, our instructor misled us with a whopper of a tale, and later blew up at participants because not enough people took the opportunity to shell out up to $45,000 for more courses. You’ll see it all in our story tonight, but it left us questioning what financial guru Kiyosaki thought about it all.

When we caught up with him, even Kiyosaki admitted there were problems with some of the tactics used in the workshops that bear his Rich Dad brand.

Bottom line? That age old nugget holds stands — if a weekend workshop on how to be rich sounds too good to be true, it probably is.

Erica Johnson is a journalist and co-host of CBC News: Marketplace, Canada’s award-winning consumer affairs show. CBC News: Marketplace airs each Friday night at 8:30 p.m. on CBC Television.

Financial planning is needed for those of you who want to achieve your financial goals, as well as the old saying “Failing to plan equals planning to fail” if you do not make plans in the financial planning or the plan is still not good then you’re planning to fail.

Try to think for a moment: people who have done just planning to fail, especially who do not plan, certainly will fail. as Robert T. Kiyosaki always emphasized in every book of the mega best seller: The Importance of Having and continue Sharpen your financial intelligence because that is what will bring you to financial freedom.

To make a financial plan is still much that is not understood by most people about issues related to financial issues. for example, people want to save in order to prepare for a down payment on a house, may not know how much to save each month, and probably also can not predict what the price will be the future home, questions such questions will arise and many will not be able to easily answered because of lack of knowledge about the “financial planning”.

In this case you may need the help of a financial planner to help you create a financial plan which if the plan is executed, then you are running to achieve financial goals that have been defined.

Usually before making a financial plan, the planner must conduct fact finding interviews and through on goal quesioner about your future financial objectives, situation and your financial condition at this moment, and then made finance plan.

In some developed countries, such as professional financial planners have been very common, here are some ways a financial planner is paid:

1. Honorarium
In this case a financial planner receives payment for the financial plan they makes, no matter the client to run the financial advice given or not. there is even a financial planner who set their honorarium per hour.

2. Commission
Here, a financial planner receive commission paid when the client runs the financial advice given. in this regard you as a client must be observant, make sure the financial advice given in accordance with your financial goals, because sometimes in order to get commission from the products offered by, a financial planner ignore your financial goals.

3. Honorarium + Commission
Financial planners receive honorarium for the financial plan and made suggestions, and if the client plans to run it, then the financial planner will also receive commissions from financial product recommended to his client.

Of course, each way has its own consequences, but if you want to find a planner who can give the best advice make sure you have a genuine financial planner to help you.

Some financial planners offer their services for free, especially those who have affiliations with insurance companies as a form of socialization and financial planning to the general public, this certainly is good news for those of you who want to made a financial plan. but before making sure that the-planners are people who genuinely help you, make sure that insurance companies also shelter where they have sufficient product to help you achieve your financial goals. So, what are you waiting for? let’s make financial planning towards your financial freedom.