1. There are four main types of people out there: Employee's, Self-Employed, Business wners, and Investors. Of those four Employee's and Sefl-Employed work for their money, while Business Owners and Inverstors have their money work for them. Most people are the E's and S's (Empolyees/Self-Employed). The rich are the B's and I's (Business Owners/Investors).
Employess: People who have a job, a boss, and work for a paycheck. This is the majorityof people.
Self-Employed: People who go into business for themselves, may have some people under them, but they still work for their money. This can comprise of lawyers, doctors, consultants, small business owners, etc. If they left their business for a year
it would probably crumble.
Business Owners: People who own a big business system and have hundreds of
employees. They usually hire people to do the work, thus freeing up their own time. They own the business, but other people keep it running. If they left for a year, the business would be more profitable.Investors: People who invest in stocks, real estate, and other areas. They build up
their portfolio of assets and earn money through their investment transactions. Their money works for them.
2. Kiyosaki suggests that if you want to move from being an E or an S to a B or an I that you first become a business owner of sorts so that you can learn about how businesses are run, how to read their financial statements, etc. This is a learning experience. Your business becomes a mentor, it increases your cashflow, and allows you more time to invest. The most experienced Investors are those who first owned a business. There are three main ways you can make this move.
- First, build your own business.
- Second, buy into an existing business system called a franchise.
- Third, become part of a network marketing group.
3. Kiyosaki introduces the idea of buying up Tax Lien Certificates as an investment. For example: if someone doesn’t pay their property taxes, you can pay them. They them become indebted to you. When they do pay they pay the amount owed, plus percentage gained.
4. Kiyosaki also introduces Wraps, or Lease Purchase Agreements. Basically you become the bank or lender in the sale of an asset. You may have bought a $100,000 home for $70,000 but them put it up for sale for $100,000 with no down and low monthly payments. The purchaser of the home them signs a lease purchase agreement where they pay you (the lender) and not a bank for the mortgage. The nice thing about this is that you can choose the interest rate. Kiyosaki usually has it around 10%. So, you are still paying your $70,000 mortgage at about 5-6% (about $400) while the purchase is paying you the %100,000 lease at 10% (about $877). That gives you a monthly cashflow of $477. If the purchaser defaults on the lease, you can foreclose and find another person to purchase the home while keeping the money already made.
5. Seminars on tape by Raymond Aaron were recommended. Goes over keys to success: Dream big, think long term, underachieve on a daily basis (smaller goals are easier to achieve the huge over the top ones), take baby steps.
6. I loved this quote by Erik Hoffer. Times have changed, yet we are still taught to think financially in terms of the industrial age. It is now the information age. Those who change with the times are the ones on top of the game.
- “In times of change, learners inherit the earth. While the learned, find themselves beautifully equipt, to deal with a world, that no longer exists.”
7. Problem solvers are the money earners because at the flipside of every problem there is opportunity.
8. When the world gets excited about something you should be afraid, when the world is afraid, your should be excited. (aka, don’t follow the crowd off the cliff).
Kiyosaki also goes a lot more in depth about the different kinds of investors (I recommend reading that in the book as it is very extensive). But he does recommend becoming proficient at level 4 investing before you move onto 5 or 6.
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