Monday, February 29, 2016

Just having a lot of money does not keep you Wealthy

At a young age, I knew I wanted to be rich. I saw my parents struggle financially and the stress it brought, and I knew that wasn't for me. I wanted to buy nice things, be generous, and enjoy life worry free.

When I told my rich dad, my best friend's dad who was a successful businessman, that I wanted to be rich, he asked, "How do you think you become rich?"

"You make a lot of money," I said confidently.

"That's partially correct," my rich dad said. "But you can make a lot of money and still not be rich." He went on to explain how some employees and self-employed people made a lot of money but weren't rich because they had low financial intelligence. They lost most of their wealth to high taxes and by purchasing liabilities.

That was too much for my young brain to comprehend. I just knew I wanted to make a lot of money. But now that I'm older and hopefully wiser, I understand what my rich dad meant. Money doesn't make you rich. Your financial intelligence does.

Why having lots of money doesn't make you rich

For example, many high-earning professionals, such as doctors and lawyers making $250,000 to $500,000, aren't really rich at all.


Because they lose so much money to taxes, their income is based on the services they provide rather than passive income from investments, and they spend their money on liabilities like homes instead of on assets that produce cash flow.

There are four things that steal your wealth: Taxes, Debt, Inflation, and Retirement. 

People who make a lot of money aren't necessarily rich because they lose so much of it to those four forces. High-earning professionals are some of the highest taxed in the US, don't have any investments that provide cash flow and hedge against inflation, are overly-burdened with debt, and aren't ready for retirement-meaning they need their paychecks or they're broke.

It's entirely possible, for example, that two different people each making $100,000 could have entirely different financial lives. One could be poor and the other rich.

Here's an example. Of the two people who both earn $100,000, one pays 20 percent in taxes, has a crippling mortgage, and saves money in a 401(k) that barely keeps up with inflation. The other pays nothing in taxes, owns rental properties that provide passive income that adjusts with inflation, and has a plan to use that passive income to purchase more passive income investments. Who's richer?

It's possible to make a lot of money and use the forces of taxes, debt, inflation, and retirement for your benefit-but it takes high financial intelligence.

Here's the fundamental problem for 'the rich', high-income employees: They have the highest tax burden, the lowest control over their retirement, and can sell only their time.

There are four types of people: Employees (E's), Self-Employed (S's), Big Business Owners (B's), and Investors (I's). The E's and S's are on the left side of the CASHFLOW Quadrant and the B's and I's are on the right side of the quadrant.

Those on the left side pay the most in taxes, have the least control, and will never be truly rich. These are people like blue-collar employees but also people like doctors and lawyers who are self-employed but really don't own a company-they own a job. They are victims to the four wealth-stealing forces.

Those on the right side, however, have all the tax advantages; have control over their money, business, and investments; and have the possibility of infinite returns because they know how to create money out of thin air through passive income. And they know how to use Taxes, Debt, Inflation, and Retirement to make them even richer-not poorer. If you want to learn more about the CASHFLOW Quadrant, I encourage you to read my book CASHFLOW Quadrant®: Rich Dad's Guide to Financial Freedom.

To be on the right side of the CASHFLOW Quadrant®, you need a high financial intelligence. That means you need to continually increase your financial education. Read books, attend seminars, network with like-minded individuals, and change your mindset.

Don't settle for the trap of just making a lot of money. Increase your financial IQ and become truly rich.

Wednesday, February 17, 2016

Robert Kiyosaki Gold Seek interview February 2016

Robert Kiyosaki is a Japanese American investor and author of popular book 'Rich Dad Poor Dad' where he wrote of his two dads. His rich dad taught him to think differently, inspired and helped him get rich on his own.

Monday, February 15, 2016

Precious Metals better buy than 401K nowadays

I don't like spreading bad news, but there's also a responsibility to warn people to be careful at this time. If you bought the idea - invest for the long term, that could be the worst idea possible in today's economy.

Purchasing power of the dollar has been coming down. That's why we say savers are losers.  When you print money and you save money, that's insane.

Robert Kiyosaki is a Japanese American investor and author of popular book 'Rich Dad Poor Dad' where he wrote of his two dads. His rich dad taught him to think differently, inspired and helped him get rich on his own.

Wednesday, February 10, 2016

People have time and money for short term pleasures but not for long term pleasures

Last Sunday, millions of people tuned in to watch a game that has turned into a national holiday in the US—the Super Bowl.

I heard one story of a family that hosts a party each year for over 150 of their closest friends. The guy spends 24 hours smoking meat to feed to the crowd, getting up every couple hours to check the temperature , as well as countless other hours making all the sides to go with the meat. It’s costs thousands of dollars to pull off.

I believe that the same kinds of feasts were created by older civilizations to celebrate the gods.

During the football season, grown men and women spend hours upon hours a week pouring over stats, memorizing hundreds of football players, and making adjustments to their fantasy football lineups…all to have bragging rights and maybe a few hundred dollars of pool money.

Now, ask any of these people to focus on building their financial education and investments, and what do you think the top excuses will be? “I don’t have enough time and money.”

And that’s exactly what those are—excuses. The reality is that we all have time and money for the things that we are passionate about. Unfortunately, in the US, most people are passionate about things that bring little long-term return, and only offer momentary enjoyment.

It was the great Roman poet, Juvenal, who said, “Give them bread and circuses and they will never revolt.” He was capturing the ingenious tactic of the Roman emperors to distract the Roman populous from things of consequence by directing their attention to festivals and food. Today, it could be translated, “Give them hot wings and Super Bowls.”

Chances are, if people spend as much time learning about how money works, and how the ultra rich use it to their advantage, they’d stop caring about sports and fattening foods and start a revolt.

Now, I’m not against having passions and fun. Far from it. But I do find it tragic when men and women trade in their financial future in service of such things. When they take every ounce of passion and energy they have left and “check out” until the next workday.

This week, as the post-Super Bowl hysteria winds down, take a sober look at your life. Where are you really investing your time and energy? Are you building for long term returns, or are you focused on enjoying the now at the cost of your future? 

The question now is, what will you do about it?

Robert Kiyosaki is a Japanese American investor and author of popular book 'Rich Dad Poor Dad' where he wrote of his two dads. His rich dad taught him to think differently, inspired and helped him get rich on his own.

Monday, February 8, 2016

How the wealthy stay motivated to get rich

Even more than our education, our habits are a reflection of our lives. Habits are very easy to develop and very hard to break, and once they're developed, they control our behavior—sometimes in ways that we don't even recognize. Often these bad habits lead to other bad habits. It's a vicious cycle.

For instance, many people want to be in shape. In fact, it's that time of year when people start making resolutions to go to the gym and get fit. Emboldened, they go sign up for a membership and begin working out. Soon they realize that working out is hard and that it hurts. That's when bad habits developed over many years creep in. They start hitting the snooze button. "Just ten more minutes and then I'll get up and go to the gym," they say. Then ten minutes turns into an hour. "I'm running late! I can't go this morning, but I'll go at lunch," they say. At lunch, a friend wants to go get hot wings. "I'll skip just this once," they say. And so on. Before long, they've canceled the gym membership, and they're back to their old habits.

Many people I talk to want to be rich. They even read my books and have an understanding of what it would take for them to reach their financial goals. But they lack the discipline to become rich. They may come to a seminar and leave excited about, and committed to, building their asset column and financial education, only to have their bad financial habits derail them.

For instance, they may want to set aside money for investing every month, but then they see a sale on some shiny new object they've wanted for a while. "I'll start investing next month," they say. "I need to get this now so that I'll save money." Then, when the next month rolls around, they realize that they've gone out to eat a little too much and that they won't have any money left over after paying their bills. "I have to pay my bills," they reason. "I'll start investing next month." Then another month comes and they're in the same predicament. Before long, they give up on their goal of investing and let their bad habits win.

Rich Dad said that the rich had a very simple way of breaking bad money-habits. "The poor pay themselves last, and that is why they're poor," he said. "But the rich pay themselves first, and that is why they're rich."

The difference between rich dad’s budget and yours

Rich Dad's budget was different that most people’s because he treated his asset column as an expense—and his most important expense. Every month, no matter what, he put money aside for his investments, even if he didn't have enough money for his other bills. 

As a young man, I didn't quite understand.

"Are you saying you don't pay your bills?" I asked.

"Of course not," said Rich Dad. "I firmly believe in paying my bills on time. I just pay myself first...before I even pay the government."

"What if you don't have enough money?" I asked.

"I still pay myself first," said Rich Dad.

"But don't they come after you?"

"Yes," said Rich Dad. "That's why I always find a way to pay."

How budgeting motivates the rich

For Rich Dad, paying himself first motivated him to work harder and smarter to make sure to pay his bills and creditors. He used the fear of not being able to pay his bills, sometimes a situation created by paying himself first, to motivate him to make more money. He worked extra jobs, started companies, traded in the stock market—anything he could to make sure he met his obligations. After paying himself first, he used the pressure from creditors to form good money habits.

"If I'd paid myself last," said Rich Dad. "I would have felt no pressure...but I'd also be broke."

Kim and I put Rich Dad’s advice into practice early in our marriage. We found that, just as Rich Rad had promised, we learned to get motivated to find creative ways to make money. In the process, we learned more about ourselves and how to make money out of thin air.

Wednesday, February 3, 2016

Childrens Education needs to include Financial Education

The biggest corruption of all is school. Why dont we teach kids about money? Why dont we tell them the truth? Our school system is corrupt..Why don’t you teach them about money? But (they) will say, ‘no, no, no, money is the root of all evil’ but I say, stupidity is the root of all evil. Kids are very smart, especially today. Given the right financial education, they’ll turn into leaders..So, give the child a choice.

Robert Kiyosaki is a Japanese American investor and author of popular book 'Rich Dad Poor Dad' where he wrote of his two dads. His rich dad taught him to think differently, inspired and helped him get rich on his own.

Monday, February 1, 2016

The flaw with US unemployment numbers

The US started this global economic downturn. Barack Obama says US unemployment is five percent. I think it is 19 or 20 percent. In America today, if you have a job for one day, you’re not statistically included as ‘unemployed.’ 

Nothing has changed since 2007; the only thing which has changed is how we use derivatives. Our countries — your country and my country — are led by crooks, by highly educated poor people.

Robert Kiyosaki is a Japanese American investor and author of popular book 'Rich Dad Poor Dad' where he wrote of his two dads. His rich dad taught him to think differently, inspired and helped him get rich on his own.