Rich Dad Seminar

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Wow! Last weekend was more than information packed, but inspiring and life changing. Nick and I had the chance to attend a Rich Dad seminar in Honolulu all about the in's and out's of investing in real estate right now. I learned a ton, but I thought I'd share a bit about what went on.

Fundamentals & Rules of Investing

• You need to have an exit strategy planned and set up before you buy a property. Exit strategies can be anything from renting, re-selling, lease options, rehabbing, etc.
• In real estate you make money when you buy a property and collect when you sell.
• You buy and sell to create cash, buy and hold to create wealth.
• The more you KNOW, the more you BUY, and the more you MAKE.
• You need more skills in order to buy more expensive.
• DOVETAILING!!! In order to maximize income/profit you need to use multiple strategies for each deal. Example: buy WHOLESALE with OTHER PEOPLE'S MONEY, do a REHAB, then use a LEASE OPTION to sell. 4 strategies were used in this example. The more strategies you use, the more money you are likely to make.
• What you don't know WILL cost you money. For example, if you don't know how to use lease options and you rent or sell instead of using that strategy that would have made you more money, then you lost money because of lack of knowledge.
• If you want to be financially free you must first go into debt in order to get out of debt. Just play Kiyosaki's Cashflow game to get an idea of how that one works.
• Knowledge builds confidence and destroys fear.
• The value of a commercial building is directly proportionate to the income it generates.

Some of My AHA! Moments

• If you own both the land and building that a commercial property is on, lease the land and sell the building. You receive money from the sell of building and continual cashflow from the land you lease. It's a win, win situation.
• You can't make profit on a deal you don't do.
• Self directed IRA/401K's can be used to invest in Real Estate.
• Every time you use OTM (other people's money) and you profit, you're rate of return (ROI) is INFINITE!
• Over borrowing can be good. Over borrow to cover expenses on loans, mortgages, expenses, until you profit from a deal, then pay it all off and keep left over.
• Never pay off good debt in a lump sum! It pays itself off. Good debt is debt that makes you money. Example: a mortgage on an apartment building that brings in a steady cashflow after all expenses are paid is good debt. The investment pays off the mortgage and you still earn money. Bad debt is debt that does not pay itself off, but takes money out of your pocket. Example: you bought a new car; that car does not make you money, it takes money out of your pocket. Therefore it is bad debt. You can turn it into good debt by using the car as a company car, and a marketing tool by putting magnets on it to promote your business.
• When it comes to commercial deals banks look at the deal itself and not your personal income. If the deal sells itself and will bring in money.
• Contract Assigns: you purchase a property from an owner and have it say on the contract "and/or assign," meaning that you can assign the contract over to someone else (your buyer) and you don't have to pay a penny on it! You do, however, make money.

I did, obviously, learn a lot more at the three-day seminar, but these were some of the most eye-opening learning tools I gained. I am so excited to keep learning more about real estate investing. The more I learn, the more opportunities I see, the opportunities I see, the more money that can be made, the more money that can be made, the closer I am to living the life that I want.

My Little Dilemma

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I'm sure we've all come across an annoying salesman. All you wanted to do was "take a look," but no, he was on your tail, up selling, talking, and just generally annoying you from the second you walked into the store. I know I'm not the only one who was ever in that situation. Flash backwards to my first ever job with a real paycheck, taxes, everything. It was just a summer thing, in between 11th and 12th grade. I was still young, only 16, so not very many places would hire an inexperienced "youngin." I hate to say it, but yes, I was a telemarketer. The pressure was unbelievable. If I didn't sell anything all day I felt horrible. On top of that I felt like I was swindling the poor and elderly into more debt and problems. Needless to say, I hated that job, and never took another one like it. Why? I hate salesmen and I hate selling.

Now why do I bring up this topic? Well, I have a problem. Numerous times in Robert Kiyosaki's books he discusses the importance of becoming a good salesman. He often refers to the fact that he isn't the best writing author, but a best selling one. That makes perfect sense. Although I find his books interesting, I must admit that I've seen better writing. The way he suggests becoming a good salesman is through finding a job that will teach you to become one and force you to overcome those fears of rejection (I'm not so much afraid of rejection, I just hate annoying people). He refers to his 2 years with the Xerox company. At first he was the worst salesman in the company, repeatedly, for over a year. Then he began to learn, grow, and overcome those fears. Soon he was the top selling rep for the company. He suggests getting a job with a company that has a good selling program or joining a network marketing company. My dilemma? I don't wanna to that.

I've thought about it for a long time. I could potentially work for a network marketing group. I've even thought of two good companies that I find would be a good fit for me, but...I don't wanna. So, should I bite the bullet and try out his advice or just learn about selling from books, seminars, and the building up of my own business? It's hard to say, but either way I've got a decision to make.

Just Finished Kiyosaki's Guide to Investing

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Having just finished reading Kiyosaki's third book Rich Dad's Guide to Investing: What the Rich Invest in, that the Poor and Middle Class Do Not, I thought that I'd share my thoughts on what I learned and thought of the book.


First off, this book was a bit more difficult to read that the first two. It is 400 pages, the first 250 of which are fairly redundant, general (not that I didn't learn anything, but it was a little on the boring side). The first half of the book primarily deals with teaching the mindset of successful and unsuccessful investors (attitudes and habits that help or hinder). It wasn't until the last 150 pages that the book really picked up for me and I was able to learn a lot and get excited about learning more. This last part of the book goes over what successful investors actually do. Some stories are given, diagrams presented, and facts thrown at you. Now keep in mind that these books by Kiyosaki still deal in generalities, so to find more in-depth information about investing you can read the Rich Dad Advisor books, and books by other people (I'll supply the list I came up with while reading in another post).



So, with that said...here are some things that I found interesting:

• Five phases to investing and becoming wealthy. Phase 1 = Being mentally prepared to be an investor. Phase 2 = Deciding what type of investor you want to be. Phase 3 = How to built a strong business. Phase 4 = Becoming a sophisticated investor. Phase 5 = Giving back to society.


• In order to get into the top 10% of money making deals you must, at least, be considered an accredited investor. In order to qualify as an accredited investor you must: make at least $200,000 in annual income or over $300,000 as a couple, or have at least 1 million dollars in net worth.


• Investing is not trading, buying, and selling. "Investing is a plan, often dull, boring, and almost mechanical process of getting rich." If the formula (plan) is too complex; it is not worth following. If you can't do it automatically after you learn it, you shouldn't follow it. Follow a formula that will make you rich, and follow it!


• Before really delving into the investment world, you must first set up a plan for both financial security and comfort. Meet with and interview financial planners until you find one you like; then make a plan. After that is done, work on converting earned income into portfolio &/or passive income as efficiently as possible.


• Investing isn't risky, investors are.


• After accredited investor comes a qualified investor, then sophisticated and finally inside and ultimate investors. Accredited investors have excessive cash, that's it. Qualified investors have excessive cash and education. Sophisticated investors have excessive cash, education, and experience. The last two have all three but are on the inside of investments (making the deals that others buy, or selling the stock and taking companies public).


• There is magic in making mistakes: Levi Strauss (didn't strike it rich with the 49'ers, but created Levis Jeans), Christopher Columbus (didn't discover a new trade route to the Indes, but found America), Thomas Edison (failed over 100 times before invented the light bulb), Warren Buffet (bought Berkshire Hathaway, the company initially failed, but he built it up again). "When you come to the boundaries of what you know, it's time to make some mistakes." "Success is the ability to go from one failure to another with no loss of Enthusiasm. " (Winston Churchill)


• Five D's to becoming rich: Dream, Dedication, Drive, Data, Dollars. "In reality, it is the focus on the first 3 D's that ultimately gain you the data and dollars you need to become very, very rich. In other words, the data and the dollars are derived from having a dream, being dedicated, and having the drive to win."


• The 90/10 riddle (why 90% of the money is controlled by 10% of the people). The 10% create assets out of ideas and buy other people's assets (mutual funds, etc.). They are both a creator and buyer of assets; they create enough to pay for the buying.


• The B-I Triangle (your team): business owner, employees, specialists, investors.

• The foundation for a good business. First must have good team, strong spiritual and business mission, and excellent leadership. Then understanding and management of cash flow, communications, business systems, legal representation, and lastly product. If one part is weak, the company will crumble.

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• "A person's financial reality will not change until he or she is willing to go beyond the fears & doubts of his or her own self-imposed limits."


• Must have a plan to not only acquire wealth, but what to do when you have too much of it.


• Ideas & Knowledge=money

These are some of the main key points that I learned from reading Kiyosaki's Guide to Investing. There are many other things that I learned which I will share in later posts since they require more in-depth writing and not just a single bullet point. For now, I found this information to be extremely helpful. It has helped me change my mind and attitude about what investing entails.

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Baby Steps

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In order to help us get off our feet Kiyosaki recommends starting with the 7 Baby Steps to get you started on the road to Success from his book Cashflow Quadrant.

1. Fill out a financial statement. Set goals for where you want to be in 12 months, 5 years, etc. Set goals to decrease consumer debt and increase assets.

2. Take control of your cashflow. Set goals for your cashflow and set aside money every paycheck that will go towards assets. PAY YOURSELF FIRST, not last!

3. Learn all about what is/is not risky. Define for yourself what you think risk is. Spend at least 5 hours a week learning so you can decrease the risk involved in your investments. “If you want to take on great wealth, quickly take on great financial problems.”

4. LEARN!! Become a proficient level 4 investor (levels of investors are in his book Cashflow Quadrant). Every week call up or visit realtors, property managers, stock brokers, financial planners, business owners and brokers. Ask them questions, advice, etc. Find your niche in the market. Specialize your skills.

5. Seek MENTORS. Find role models, mentors, and reverse mentors for your field. A reverse mentor is someone who is the opposite of what you want to become. You learn what not to do from their example.

6. Make mistakes. Start small, put a little money down. If you make a mistake, learn from it and move on.

• “Only fools expect everything to go the way they want.”
• “We can never know things beforehand, and we often only learn things when we need to learn them….Try new things and expect disappointment. Many people never start projects simply because they do not have all the answers. You will never have all the answers. Begin anyway.
• “The size of your success is measured by the strength of your desire, the size of your dream, and how you handle disappointment along the way.”

7. Believe in yourself and start today! “Listen to your doubts, fears, and limiting thoughts, and then dig deeper for the deeper truth. Prepare daily to become bigger than your smallness.”

What I Learned from CASHFLOW QUADRANT

After finally reading "Rich Dad Poor Dad" I was psyched to read the next book, "Cashflow Quadrant." My husband and I had already signed up for a 3 day seminar that was fast approaching and I wanted to learn as much as I could before I went so I would understand what people were talking about. It took me two steadfast days, but I got it read, and these are some of the things I learned.

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.

What am I Doing?

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This blog is mainly written for myself. It's a way for me to keep track of information I'm learning, the steps I'm taking, and the actions I'm doing on my path to greater wealth and understanding.

It's funny that one book could have done so many things for me. I remember that I bought "Rich Dad Poor Dad" by Robert Kiyosaki many years ago on a whim. I'd heard that it was a good book. Since browsing the discount section of bookstores and libraries was something I love to do, it was no surprise that I ended up buy this book I'd heard so much about.

So, there it was. On my bookshelf with many other bargain buys. I was in school at the time studying to be a high school English teacher. I was at a competitive university (Brigham Young University). It was a school filled with perfectionists and overachievers. I was one of them. My school schedule was very busy. Plus I was one of those students who always did all the homework, and even the suggested readings. On top of that I was working two jobs. Needless to say, "Rich Dad Poor Dad" stayed on that shelf for a long time.

I finally finished school and accepted a job as an English teacher at a local residential treatment center. Again, I worked hard. Most of the time, I was the last teacher to leave the school (not the first to show up; I just loved my sleepy time). I'd go home and do all I could to relax. I read all day with my students, on my own (to prepare lesson plans and get ideas), and in class (I had to take extra classes to work at this school). My time was nowhere to be found, and I did not want to read anything else because I was already on book overload (first from school and now from work).

The next time I even thought about that "Rich Dad" book sitting on my shelf was during a parent teacher conference. I was talking to the substitute who was going to take my class for the day. He loved books and was currently reading "Rich Dad Poor Dad." My thoughts turned to that book on my shelf, "I have that book, but haven't read it yet." "You haven't read it?" was his reply, "You need to get on that."

It took about two years for me to "Get on that." I had quit my job because of all the stress it gave me, and was looking for something else. I decided that I didn't want to work for someone else if I could help it. As it would happen I ended up marrying that substitute. He is now in the military and we live in Hawaii. He had been reading some of Kiyosaki's other books and signed us up for a free seminar. We went, were inspired, and signed up for a 3 day seminar (coming up next weekend). I dusted off my book and finally finished it. It took me two days to read the next book, and now I'm on to the third.

What am I doing? I going to put to use the things I'm learning. I don't want to work for someone else. I want to help those around me be financially free. I want to spend time with my family and friends. I want to travel the world. And, I want to live a long full life that isn't worried about money all the time. So, what am I doing? I'm changing my life. I know it will take a while, but I am prepared, ready to learn, and willing to change.

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