Monday, October 16, 2006

Learn to Invest Like a Pro

By Robert Kiyosaki

Years ago, when I was just starting my real estate investing career, I considered a condominium in Waikiki as an investment.

The problem was that the investment would have cost me about $300 a month.

A Meaningful Exchange

Back then, a $300-a-month loss would've been the same for me as $300,000-a-month loss would be today. When I ran the numbers past my rich dad, he asked, "Why do you want to lose $300 a month?" In other words, my rich dad wanted to know why I wanted to pay money to invest.

"Well," I told him, "the real estate agent said the condo would go up in value and I would make a profit."

Rich dad chuckled and asked, "How many condos can you afford that cost you $300 a month?"

"But it will probably go up in value, and then I can get my money back when I sell it."

"You're probably right," said rich dad, "but you didn't answer my question. How many investments can you afford that cost you $300 a month?"

At the time, my net after-tax income was only about $2,000 a month, and my expenses were about $1,800 a month, so the reality was that I couldn't afford even one condo that cost me $300 a month -- even if it went up in price sometime in the future.

So my answer was a sheepish, "I can't afford even one that loses me money."

With a smile on his face, rich dad said, "Remember what I've been teaching you. Any fool can lose money on an investment. That doesn't take much financial intelligence."

Investing for a Bleak Future

This advice may sound simple, but if you think about it, millions of investors invest their hard-earned money every day and receive little to nothing in return. In other words, their investment costs them money rather than makes them money.

For example, millions of workers put their money in 401(k) plans, hoping that someday in the future there will be enough in the account for them to retire on. And millions of people put a little money aside, either in a bank or under the mattress, and receive little to nothing in return. They all pay to invest rather than getting paid to invest.

The lesson my rich dad was drumming into my head, and I mean to drum into yours, is that investing should make me richer every month, not poorer. It should put money in my pocket every month, not take money out. To him, it was a miracle that so many financial services salespeople could convince financially naive people that it was smart to pay money to invest.

He wanted people to learn to look harder for better investments -- to be professional investors rather than naive investors. When he asked me, "How many investments can you afford that cost you $300 a month?" he was also asking, "How many investments can you afford that earn you $300 a month?" The obvious answer is, "As many as I can find."

Learn to Earn

If this idea challenges you, don't fret. As I said, my rich dad had to drum this idea into my head.

You have no idea how many times I came to him with great investments that cost me money rather than made me money. And even though he's passed on, I can still hear him reminding me, with every deal I look at, that it should earn, not cost, money.

The good news is that once you understand this lesson and start finding investments that make money, your life is never the same. In my opinion, grasping this distinction is one of the biggest differences between the rich and everybody else.

Not getting this lesson sets people up to fall victim to sales pitches from financial services salespeople, who sell them on the idea that it's smart to "invest for tomorrow" or "put a little bit away today for a brighter future."

If you've read my books, you already know that I invest primarily for cash flow, not capital gains. Most people invest for capital gains, which is why they buy a stock, mutual fund, or piece of real estate and hope the price will go up. Not me. While I occasionally invest for capital gains, I prefer to invest for cash flow.

Now, I can hear some of you complaining that it is harder to find investments for cash flow, and that's true. That's why most investors invest for capital gains. It's also why most salespeople sell naive investors on the promise of riches tomorrow rather than riches today.

Separating the Pros from the Know-Nothings

I realize that some of you may be asking, "But how do I find investments that make me money today?" I know from personal experience how frustrating this question can be.

All I can do is encourage you to keep asking yourself that question. That's what I did and continue to do today. I'll repeat myself yet again: Knowing the difference between investments that cost you money and ones that make you money is what separates rich investors from naive investors.

This even applies to business. I'm always amazed at how many people assume a business has to lose money before it makes money.

Recently, I had to let go a whole team of managers from one of my businesses because all they did was lose money. When I pressured them as to why the business was failing, many in the group reiterated this cracked philosophy. As I said, I had to let them go and replace them with people who knew how to make money.

Nothing Worthwhile Is Easy

I often use my wife Kim as an example of my rich dad's lesson. Her first investment made her a net $25 a month. It was a two-bedroom, one-bath house. To consistently see moneymaking investments required time, study, discipline, and effort on her part.

Yet once she learned to spot an investment that made money, she was part of a world very few people ever see. Today, she makes tens of thousands of dollars a month from her investments.

I'm not saying it's simple to find investments that make money right away. As the saying goes, "If it was easy, everyone would do it." Yet we all know how easy it is to find investments that lose money or that cost money -- that's why there are so many people who invest for tomorrow rather than for today.

My rich dad would advise you to keep looking, and train yourself to invest like a pro.

Monday, August 07, 2006

10 Tips To Improved Personal Budgeting

Here are some tips to improve our personal budgetting. :) See it for yourself!

10 Tips To Improved Personal Budgeting

By : Matt Shupe

1. Clip coupons. This is the single most important rule of personal budgeting. Why? Simply because a few minutes spent clipping coupons could end up saving you multiple dollars in the checkout line.

2. Buy in bulk. If your favorite products are on sale, buying in bulk may cost you more at present but could end up saving you a lot in the future. Some good examples are items that do not have an expiration date, such as soap, shampoo, toiletries and other household items. Canned foods, which carry a long expiration date, are also ideal for buying in bulk.

3. Saving your change can be a great help in your quest for personal budgeting. You would be surprised how quickly change can add up and, even if it’s $50 or $100 per month, your coins can add up to some serious cash. Many people discard their coins or simply toss them around without thought, but saving them in a bowl or dish will help a great deal when it comes to personal budgeting.

4. Put a portion of each paycheck into a savings count each week or month. Whether it’s a few dollars or several hundred, always make sure that you are putting aside some amount of money into a savings account. If possible, deposit 10-20% from each paycheck.

5. Avoid impulse shopping. This type of buying is what ultimately leads to buyer’s remorse. In order to avoid it, think about what you want to shop for and make sure that you avoid any last minute additions unless they are absolutely necessary or you can afford them without being in a crunch.

6. Shop the sale racks. Everyone enjoys sprucing up their wardrobe now and then so, when it comes time to add a few new pieces of apparel, stop by the sale rack for big savings. There’s nothing wrong with keeping a few extra dollars in your pocket, which can be later be used for life’s little essentials.

7. Avoid using high-interest credit cards unless you can repay them within six months. Otherwise, you are more likely to get swallowed up with interest and end up paying for the original purchase several times over.

8. If you do use a credit card for purchases, try to use one with an introductory APR or a regularly low interest rate. This could end up saving you big bucks every month and also in the future, which is one of the most important rules to personal budgeting.

9. Request free samples. A number of websites, including and, offer customers the opportunity to request free product samples of certain items. Everything from skin lotions and shampoo to dog treats and household products are up for grabs to all who ask. In addition, many manufacturers offer free samples of new product releases directly through their own website.

10. If you find yourself in increasing credit card debt, call the creditor and request to be placed on a hardship program. This type of program allows for lower interest and smaller payments for a specified amount of time. Depending on the creditor, it can be in effect for several months or until the balance is paid in full. This method will not only help your immediate personal budgeting, but will also give you additional financial freedom in the future when the debt is paid in full.

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The author is a regular contributor to My Budgeting Tips where more information about budgeting and budgeting software is available.

Tuesday, August 01, 2006

Professional Advice on Personal Finance

Sometimes we dunno to whom we should discuss about our finance status. We dunno who we could trust. It is becoz about the matter that we want to discuss. It is about money. We are afraid if that someone we are discussing with will turn out to be our betrayer and take all our money. :D Well, eventhough that will not happen unless we talk to a robber :P But we still need to be careful and take the right action at the very best time. We also want our money to be all-out working for us. So, I think the article below could be useful for us. See it for yourself :)

Savings Accounts - Professional Advice

by : Cindy Kenny

When it comes to savings, you may well find yourself daunted by the sheer variety of ways to invest your money. Particularly if you find yourself with a substantial amount to invest, and are less than confident at dealing with things like the stock market, bonds and trusts, you’re likely to gain from professional expertise. The main issue here is trust – you want to be sure your money is being used to its full potential and whoever you entrust it to must be someone you have total confidence in.

If you have a basic understanding of how savings and investments work, however, it will be a lot easier to make judgements about the reliability and efficiency of individual advisers.

Independent Financial Advisers

Usually you will not be charged for general advice, but the adviser will gain commission when he or she sells you particular products. Don’t be afraid to ask about commissions – a good adviser should be open and transparent about such matters. They are duty bound to find out all relevant information about you and then give ‘best advice’ – which means selling you the products that are most suitable for your situation.


Accountants normally advise on book keeping and tax, but sometimes also give advice about investments. If involved with investing, they must belong to one of the Recognised Professional Bodies responsible for regulating their business. These include the Institute of Chartered Accountants and the Association of Chartered Certified Accountants.


If you are dealing on the stock market, you will need to buy and sell your shares through a broker. If you want advice on your investments, choose a traditional stockbroker. On the other hand, there are brokers that offer a dealing-only service, and this is a cheaper way to buy and sell shares. Stockbrokers charge a commission on deals, and a traditional brokers service should include advice. provides detailed advice and ways to locate a broker.

The Financial Services Authority regulates all these professionals – if you are unsure about the credentials or dealings of someone check with them to verify that they are legitimate and are operating fairly. The FSA website also has details of what to do if you are unhappy with the service you’ve received from a finance professional – check Once again, the government’s advice site has sound information on the basic principles – and links to other information sites.

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Joe Kenny writes for Card Guide, offering the latest information on credit cards in the UK, visit them today for the best balance transfer credit cards and start clearing credit card debt today.

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Financial Literacy? What's that?

Have you ever heard about financial literacy? Basically we all know that literacy means something to do with language. Well, you can see in a dictionary the meaning is "the state of being able to read and write". What can we translate here in the term of "financial literacy" is "the state of being able to read finance and write finance" :) . So the meaning is the ability to read, write and understand about finance. Here are some tips that you will find useful in your way to learn more about financial literacy.

Three Simple Steps To Improve Your Financial Literacy

by : Joel Teo

Many people today place money with financial analysts, fund managers and experts in the hope that they can grow their funds. However studies have shown that in the vast majority of cases, the individual generates the same return as the experts. But most people when confronted with this fact, usually reply that they do not know how best to invest their money themselves and it is submitted that the real reason is a lack of financial literacy.

So the usual question is how someone can increase his financial literacy? This article will therefore list three simple ways for anyone to start increasing their financial literacy.

Firstly, the best way to start is to start browsing an online investing dictionary and start learning simple financial jargon. A great place that you can consider is where you can start learning the meaning of basic financial terms so as to be better able to understand financial literature. You would want to spend some effort in learning those pertaining to the stock market first because such terms are most commonly used in the papers when financial analysts talk about the state of the economy.

Secondly, once you have a basic grasp of financial terms, you can then graduate on to reading the financial section of the newspapers. I know of friends who attack the movie section of the newspapers and maybe a little about the crime news but avoid the business section like the plague. These are the same people that gripe about the lack of understanding of the “recent increase in Initial Public Offerings”. It can be a bit intimidating for the uninitiated but you will gradually start learning more about the particular market that you are in and how it works.

Thirdly, a fast way to learn more about financial terms is to make it a point to listen to the financial news daily before you head to work. This can be on the radio or on the television. Remember to take what the analysts say about stocks and shares in the news with a pinch of salt as sometimes the stock moves in response to what they say and as the scandals have proven, they sometimes actually move against the advice that they tell the general retail customers.

After doing these three simple steps daily, you will find that your financial knowledge will start increasing and you can then subscribe to Forbes and other financial magazines or newspapers like the Financial Times and feed your ever growing interest in financial matters. If you finally reach the stage where you want to know more then you might consider doing a MBA or CFA.

In conclusion, the quest for knowledge in the financial arena is a never ending one. New financial instruments are created ever so often and keeping abreast of such changes can be an almost impossible task. But getting started is ever so important in this fast moving world and you can then manage your own investments better and with more confidence.

Copyright © 2006 Joel Teo. All rights reserved. (You may publish this article in its entirety with the following author's information with live links only.)

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Joel Teo is the successful Webmaster of Learn how you can make more money today from Real Estate Investment today.

The Art of Personal Finance

Personal finance is a very essential part in someone's life. One must take a good care of it, and it will bring freedom to him/her in the future. To become financially free, there are many things we should learn about personal finance. It is not an easy thing, and it will be a lot more easier if we start learning from the time we were kids. But now it's still not late for us to learn. And why not at the same time we learn, we also teach them to our kids? So they would also improve their personal finance from now on. Let's take a look at what things we could tell our kids about personal finance.

Personal Finance - Three Timeless Wealth Concepts To Impart To Your Children

by : Joel Teo

Have you ever wondered why the rich get richer? Some say that it is because they can leverage on greater wealth in each successive generation. However for many, the real reason it that the rich teach their children financial skills that stay with them for life. These skills are then used with greater skill in each successive generation leading to a snowballing increase in wealth.

This article therefore highlights three wealth concepts that you may consider imparting to your children at an early age so as to give them a financial head start in life.

#Concept 1: Good debt and Bad Debt
Many people are drowning in debt today and on the flip side, some people stay away from debt as far as they can. A more balanced approach is needed. Debt is important in our economy as it is used to fund large projects. Thus, the key is to learn the difference between good debt and bad debt is the purpose for which it is used.

For instance, credit card debt is bad debt when used to purchase depreciating consumer products, while debt can be good debt if you can use it to purchase real estate and start getting a cash flow from the difference between the monthly rental proceeds and the monthly mortgage instalments. Thus teach your child how to use debt wisely.

#Concept 2: Cash Flow and Capital Appreciation
Many people cannot tell the difference between these two concepts. There are generally two types of financial instruments and some hybrids in between. Most financial instruments are capital appreciation instruments meaning that when the price goes up and someone buys from you when you sell the instrument, you make money. (e.g. stocks & shares) Thus the capital (the principal sum that you paid) has increased in value thus “Capital Appreciation”.

On the other hand there are instruments that give you a cash flow meaning a share of the profits. Examples include real estate investment trusts and other mineral rights trusts like oil trusts where you get a share of the monthly oil income. These instruments are great when you make a large enough sum from your capital appreciation type instruments and you park a portion of the money in them for monthly cash to actually use. Children should be taught this difference early in life so that they can start learning how the free economy works.

#Concept 3: Take Charge of your own money
Fund managers and analysts love to tout their own horns telling you about how they over performed the market. Actually, the fund managers earn money from managing your money. I.e. they either charge management fees or flipping charges and not whether your portfolio makes money or not. This means they can manage your money badly and still be paid.

Studies have shown that at the end of the day that many fund managers at the end of the day may fare no better than an individual in stock selection and giving rise to the report that monkeys throwing darts at random stocks on a dart board may actually fare better. Thus teach your children to start learning more about investing and take charge of your own finances and do your own investing.

In conclusion, teaching children about finance at a young age is great and in fact some of the brightest fund managers today talk about their parents and grandmothers analyzing stocks in front of them when they were small. Start teaching children young about managing their own finances and how to understand how the modern economy works and they will grow up better placed to handle the financial world out there.

Copyright © 2006 Joel Teo. All rights reserved. (You may publish this article in its entirety with the following author's information with live links only.)

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Joel Teo is the successful Webmaster of Learn how you can make more money today from Las Vegas Real Estate Investment.