To Robert Kiyosaki

Robert,
I have been studying finance for most of my life in an effort to understand a few questions. The big questions I have been trying to answer are "how do I control my finances and make my money go farther?" and "How do I have all the money I want enter into my life?"
In my journey I have attended many seminars and classes as well as read many books on the subject. Each time I come away not sure if I have found the answers to my questions or not. Thanks to you I now have those answers! I want to share how I came to figure this out.
I have several neighbors and friends that are experiencing financial difficulties this year and I have offered to help them out since I have studied this topic for so many years and have been able to make a huge difference for my family with what I have learned.
In preparing some lessons or teaching points I could cover with them I started thinking about some of the classes I have taken and realized they all have one major theme.
In high schools here in utah they often teach a class on finances that basically is only a one hour after school class. What it entails is stopping by a booth to get your character card then going to another booth to collect your pay check. Now you have to figure out how to pay your bills and get your needs met. It is an eye opener to the reality most people have after they leave school. It was quite depressing too.
In college I took a personal finances class, bought the book and software and was excited to finally get my answers. I still have this book and software but I have yet to figure out how it all makes sense. The class was an online class yet once a week we had to attend class to hear a guest lecturer. One of the speakers was a Realtor teaching us how to buy a home and how it can be "our biggest investment". Another speaker was an Auto Broker showing us how to buy a new and used car. Other speakers included a jeweler showing us diamonds and coins, insurance broker and "financial planner" (ie. the mutual fund guy). We also learned how to look up mutual funds using morning star and other reporting systems. At the end of the class I still didn't have my answers.
Then one day a friend of mine handed me a copy of Rich Dad Poor Dad and encouraged me to read it. I loved it yet had no idea how to wrap my brain around what you said. It seemed refreshing to see another perspective on finances yet it sounded like greek to me.
Now after a decade of reading all your books over and over and over I finally have it figured out.
There exists two kinds of financial education in this world. One I call commercial finances and the other I call the real way to do it.
As I look back on what I have learned I realize that in high school they were telling the truth. In that class they spent 5 minutes of the class making you aware of how to make money (job) and 45 minutes telling you how to spend your money. Even the college class was all about how to spend your money. IT didn't go over how to make more money.
Even the insurance guy and mutual fund guy was all about "give us your money and we may give it and a little more back in 30 years". If you really think about it there are three ways most people learn the most about finances. They are from banks, lending institutions and businesses. Banks want you to give them your money in savings so they can use fractional reserve banking and make a fortune. Lending institutions want you to need money so they can lend you some and charge you interest. Businesses want you to spend your money with them. Basically commercial financial education is all about teaching people how to move their money from their own pocket to someone else's pocket.
It has nothing to do with improving the persons financial life. Even the prominent so called "financial experts" are teaching you not how to be better yet how to move your money into other pockets than the one's you are dumping it into already. Now there's a conspiracy if I've ever heard one.
I think the reason it took me years to wrap my mind around your advice is that my financial vocabulary and thinking were stuck in the commercial way of thinking. Just in the last several years has my thinking truly shifted. I can now see and think in the vocabulary of the cashflow quadrant. I can now see and hear it in what people say and write. It truly is like Neo finally seeing the coding of the matrix.
I have read tons of negative things about you and your books through my studies and realize that what most people want is a step by step way to become wealthy. They are looking for an instruction manual that will hold their hand the whole way.
One of the biggest complaints you receive is that you don't offer an instruction book to wealth. And that is because you know it would be an injustice to give someone that. You focus on helping people understand the language differences from what they have been taught and the way the rich do things. Becoming rich with out knowing the why doesn't make you truly rich. It just means you can follow instructions. It is easy to claim ignorance if you can't see where you are going.
In m mind I equate this to buying a kit car. I am not a mechanic and I do not understand the language of mechanics. If I bought a kit car I could probably put it together because it comes with an instruction book. What moat people are taught is to follow orders and don't question it. If I built a car from instructions I would never learn how a car truly works or why it needs to be assembled in a certain way. By having my mechanics help me and guide me rather than tell me what to do I can gain a deeper appreciation and understanding of why a car is the way it is.
You focus your efforts on helping people have the language and foundational understanding of being wealthy. Once you understand that it does not matter which vehicle you use. Wealth has to start from within your own mind and thoughts for it to be true wealth. Its not in the making of the money it is in knowing how to make the money that makes the difference. That is why lottery winners always lose and the state never loses.
Thank you very much Robert for your never ending devotion to showing me how see a new world. I am very glad you have never written a how-to book and have given me the easy road. I am grateful for the many years I have spent learning. Many people complain you only talk philosophy and history. Thanks to you I have lots hundreds of my own man hours in my business because I have been gaining an education looking up and studying what you talked about. I have given myself an education in economics and history because of the things you mention in your books. I cannot tell you how much I have learned.
Because of you Robert, I no longer need an instruction manual. With the help of guidance from my advisors I can build my car my self and know why it is the way it is.
Thank you.

Rules of life

It seems amazing to me how most people go through life with amazing routine. We do the same thing everyday and hardly deviate from that at all. We have work to go to, school to attend, family functions, church activities, hobbies and some time to sleep. Even though we all have the same amount of time in every day we end up with quite different results.
Some people become very successful and have amazing lives while others barely have a life at all. Some become experts at tv shows or watching sports while others discover world changing ideas and projects.
One thing that makes the difference is how we prioritize our life. What ever is your most important priority you will get the most of. How we set up what is important to us and why makes a major difference in what we end up with as life comes to an end.
One rule of life that I think is important is to find and do what you love. Whatever gets you excited and motivated is what you should do for life. Now making a living is important too. Many of would not classify money as a high priority yet without it our life would fall apart. Another name for money is currency meaning current like a river. This is important because money is just a resource like a river. It needs to flow. Money is always flowin somewhere. Where is your money flowing to and how is it flowing in?
Another rule of life is to get money flowing to you. Have a way to pay your bills. Most people use a job to fulfill this. I think your daily work should be what you love an your money should come from somewhere that will allow to do what you love. If you love being a mailman then you should do it for as long as it is fun for you to do. While being a mailman why not learn how to make money work for you and pay your bills for you while you are deliverig mail. This can be stock investing, real estate investing, starting a business of some sort or another way to generate money.
If your bills are being paid by a better and longer term source of income you won't have to worry about financial problems granted you use your finances wisely.
I think that is a good way to live life. Do what you want to do and learn how to make money work for you.
Think of what you can do with your life if all your bills were paid whether you worked or not. What a great way to live.


-- Posted from my iPhone

The Rich Dad way

Through out most of Robert's books he explains his rich dad's way to wealth.

The formula he taught is to start a business of some form and get it making you money. Then you take the profits form the business and buy real estate you can use for long term investing in cashflow (rentals). Once you have a cashflow from these properties you can then use that money to pay off your debts, buy the stuff you want, and invest in more real estate, business, and paper assets.

I know it sounds simple yet this process takes several years to do and requires a lot of education. Not just formal education yet mostly financial and entrepreneurial education. Most people believe they have to work for money. They trade dollars for hours and their idea of getting ahead is to earn more dollars per hour or trade more hours. This is not what the rich dad pattern is.

Lets take this one step at a time:

Step 1- Build a business. This can be done by joining a network marketing company, starting a real estate investing company, owning a direct sales office, starting your own company from scratch, buying a franchise, etc. The key is to start something that you can do for many years. Learn to work for free. Learn to make money by producing and promoting something rather than trading hours for dollars.

Step 2- Invest the business profits into real estate. Take what you have earned in your business and basically start another business having rental properties and properties you can create a monthly cashflow with. This residual income will help you create infinite returns with your money. Most people take their money and use it to make payments on things they want to have. They give what they can have in the future for the pleasure of owning a toy now. To me it makes more sense to take my money and invest it so I can have people pay me monthly payments rather than use it to make monthly payments to someone else. In this way I can buy my toys with cashflow, pay them off and still have cashflow coming in.

Step 3- Get out of the rat race. The key to this is to have more cashflow coming in than payments going out. This means your bills are being paid without you going to a job. Your rentals are paying your bills. This is financial freedom. For all intents and purposes you don't have any bills at that point. The money you used to use to pay your bills now becomes money to do what ever you want.

That is my goal and I hope your goal too. I will keep posting more on how to do this.

Piggy Banks are cool!

In my studying of finances and how to improve your own financial life I have come across a concept that seems to be quite common among many wealthy. That concept is to make financial freedom a daily thing. It is something you need to spend some amount of time on each day. We all face challenges every day of our lives so it is important to remind us of our goals to be free.

One very powerful and very simple way to do this is use piggy banks. All you need is three piggy banks.

On one of them write "Charity", the next one write "Savings", and the next one write "Investing". Every day put some amount of money into each piggy bank. It does not matter whether it is a dollar, ten dollars, or a dime. Put something in them every day. This will not only help you manage your money a little better by setting some aside yet it will remind you of your commitment to be financially free.

The money you put in the Charity bank you will give away each month. It does not matter to whom you give it, just donate it away. The savings bank you can keep in there or place it in a safe interest bearing account that will help you keep it. This money is for the major stormy days when you are down to last resort. The investing money is to only be used to invest in something (i.e. silver, gold, real estate, stocks, businesses, etc) or into improving your investing education. This is where your money becomes your employee.

Once the money has entered each of these banks it is only to be used for the purpose of that bank. It cannot be borrowed for other things with a promise to be put back later. That will ruin you financially. Every couple months look at increasing the amount you are putting away so you can manage your money even better. The goal is to be putting 10% into each bank. This means 30% of your income will be put away. The other 70% you can use to pay bills and spend. This will dramatically help you have a better financial future.

I know of people who put 80% of their income into these banks. How fun will that be. The more you can put away the faster you will be able to get out of the rat race. My wife and I do this and it is quite fun to do. I know it is already helping us out to be smarter with our money.

I challenge you to put this into practice for 90 days and see how it helps.

Dave Ramsey and the truth

I have gone through Dave Ramsey's audio course of Total money make over. It was a fascinating experience. Remind you I am a huge fan of Robert Kiyosaki and have read everything he has put out. I thought why not get a different perspective on financial matters and Dave is quite prominent as a financial guru so why not him. I learned that I need to cut up all my credit cards, never use debt, and shrink my spending to below my means. So basically go on a diet. Last I checked most diets do not work. I know from studying health and nutrition for years that having good education in health is what makes a major difference in your health. It's not just doing what someone else tells you to do yet it is knowing what to do and why makes a difference. Most people do not understand what High Fructose Corn Syrup is and how it affects their health. Hardly anyone knows that it was not even in our food system 30 years ago and is a man made product that has major health affects. Knowing this can help you with your health dramatically.

So Education is a very important aspect o our lives. Most of have limited exposure to education. Sure we went to school and some of us have diplomas yet the biggest lesson we learned is to turn over control of our lives to someone else and do as we are told. Color within the lines. Most people do not know that John Rockafeller was a major player in creating our educational system in an age when employees where needed most. People who can follow orders. So we learn to turn our money over to other people and let them control it. One of the biggest issues I have with Dave's teachings is he recommends investing in mutual funds rather than investing yourself or buying gold or silver. (its funny that the wealthy people in america do the opposite of what he recommends.) With todays economic melt down in full swing we have all learned what happens if you put all your money into mutual funds. It goes to someone else. Always remember, money is never lost in the stock market, it just goes into someone else's pocket. If you had bought gold and silver over the last ten years instead of a mutual fund you would still have all your money plus a very nice return. Gold ten years ago was around $200 per ounce and today is over $900 per ounce.

Robert's main philosophy is education. Learn how to control you own money and know how to create your own wealth. He says you should live below your means and learn to increase your means so you can have the lifestyle you want. Set a goal for how much money you want to spend in a month on whatever you want then learn how to create a constant stream of income that will be greater than what you want to spend. How cool would it be to have a regular paycheck that you don't need to get an extra job to have and you can spend it any way you want.

Robert tells in his books of how he really wanted a porche. He figured out how much the payments for the porche would be then worked to find an investment he could buy that would generate enough income to make his payment. He bought the investment then the car and had the car paid off in a few years. So the car was basically free and he still had an income producing asset after the car was paid for. It really doesn't take much more work to do this too. In fact it takes less work than having to get a second job to make the payments.

I don't know about you yet I prefer the path of education and controlling my own future.

A Rule of the rat race

One of the things that I think is a major rule of the rat race is the common belief "Go to school, get a good job and save for retirement". This is one of the more widely spread ideas. Now this is not necessarily bad advice if you enjoy being in the rat race. The key is if you want out of the rat race you need to get rid of this notion since it will hold you down. Those who get out of the rat race do it through either having a business like network marketing with residual income or they create a more traditional business that creates the jobs for people in the rat race to occupy.

Education is a very important aspect of life. I love studying and learning. Now I was not a fan of school since I had to jump through their hoops in order to graduate and I had to take tests. I think I have taught myself more since graduation college than I did in college.

For matters of getting out of the rat race having financial education is a key topic to know. My recommendation is to understanding how money works and how to make changes to it. Just like when you want to learn another culture it is important to understand the words they use and how that helps them in their environment. For instance, in the Frozen northern part of the globe are indian tribes that have almost 20 words to describe snow. Where I live we have just a couple terms for snow. The reason there is a difference is because our lives depend differently on understanding snow. I need to know what the driving conditions will be yet the indians use it for survival.

This is an important concept for wealth building too. To understand money and how it works learn the words and language of money. ( and no, greed, selfishness, etc are not the words of money. Those are the words of misuse of money.) Understand things like cashflow, income, expenses, assets, liabilities, debt to income, etc. These can be learned by taking simple courses in accounting. Economics is an important topic as well since it describes how money flows on a national and global level. Economics is the study of systems of money.

The more you understand how money flows and how to use it the better you will be at having it flow to you. LEarning how to build businesses or other income generating ways will make a difference. You will learn ways to make sure you have plenty of money rather than just put it in the stock market and hope it is worth more when you need it. We've all found out lately how well that works.

The conspiracy

I have really enjoyed reading Robert kiyosaki's new book the conspiracy of the rich. It has taught me a lot
About how to think and do things in this new economy we are in. I hope you will enjoy it too. He is leaving on the Internet for free for another week and I want you to have access to it. Click on the links next to my Blog and get it for free before it gets taken down and sent to the publisher. When that happen you'll have to pay for it. PleAse take the time to read it. It will help you I your life.

-- Post From My iPhone