Cashflow Blog

I just finished watching Robert Kiyosaki and Steve Forbes speak on “Stocks, Politics, and the Economy: Prudent Strategies” at the Forbes.com iConference.

Here are a few bits of wisdom Robert offered:

“The biggest thing about financial intelligence is knowing when to save and when not to save.” (He pointed out that in today’s economy, he’s not saving — he’s investing!)

“Banks will always give me money for real estate.” (Banks typically won’t give you money to invest in stock)

“If you’re going to invest today, invest globally.”

“The tax code incentivizes the entrepreneur and punishes the employee.” (Become an entrepreneur to build your wealth and to take advantage of the tax breaks the tax code offers.)

In a comment about today’s political situation, Steve Forbes noted: “Never underestimate the power of politicians to muck things up.”

A concise summary of the discussion is: Increase your own financial IQ so that you can take care of yourself regardless of what happens to the economy.

Originally posted here:
Robert Kiyosaki and Steve Forbes on the Forbes.com iConference

“Poor people have jobs, Rich and Successful people have careers.” - Colin Cowherd ESPN Radio

I heard this over the radio one day and it took me a while to figure out what he meant. It was one of those days where I just had a few minutes to tune into the radio. As soon as I turned it on I heard this. I don’t know what lead up to this statement but it struck me and stuck with me.

I brought up this statement with my students, most of whom fall into the poor or poverty social class, and they all understood exactly what I was saying.

I explained it like this:

Poor people have jobs. They work for money and nothing else. So what happens? Is a person who makes $250,000 a year poor? Maybe not by money standards but what is their life like? How much do they work? How much do they enjoy themselves?

If they just have a job that pays well they are probably not completely happy. Actually if they are like most of us they have a job that they just don’t like. It is nice to make a lot of money but are they happy?

What is the sense of making a lot of money when all they do is work? Then what happens? When people work in a job that they are not happy in they need to supplement this unhappiness with something. Some buy toys, a bigger house, new cars, and more. Then what happens? They have to keep working to pay it off. Some are more destructive and turn to alcohol or drugs. Still others take their frustrations out on others.

Rich and successful people have careers. What do they work for? They typically don’t work for money, they get money as a result of their effort and their hard work. Instead of working for money they work to learn. They learn what it takes to get to the next step. That next step may be the next rung up the corporate ladder (something I have no interest in). For some the next step is to open their own business. For others it simply is a case of lifelong learning.

These people may not be rich with money, but they are rich and successful with their life. They are happy because they are doing things that they love to do. They are successful not because they work hard, but because they enjoy their work. Since they enjoy their work they tend to spend more time with it, and they tend to do a better job.

So what are you doing? Are you happy with your job? If you are maybe you should begin to learn and turn it into a career. What is the next step? Where will it take you in the future? If you are just starting out don’t worry about the money right now. If you work for money you will rarely get ahead. If you work for your career then you will find the opportunities will come to you and you will get paid soon. The money comes as a secondary result of how well you develop your career.

Be patient, I know it is hard, I fell into those same traps, but there is a payoff in the end.

~~~

source:http://www.coachkip.net/2008/05/21/poor-people-have-jobs/

Go here to read the rest:
Poor People Have Jobs

Part 2 of Rob Minton’s Presentation “How to Teach Your Children to Become Finanacially Independent”.

View original here:
Video: Teach Your Children to Become Financially Independent (Part II)

Rob Minton recently gave a presentation titled “How to Teach Your Children to Become Financially Independent.” The research that he performed to prepare for this presentation unconvered some information that was down right scary.

Here it is in a nutshell…

Your kids will not accumulate any significant wealth in their adulthood.

Do you want your kids to struggle from week to week over money?  I don’t.  

Well, if we don’t do something about it right now, they are going to have money problems.

See the original post here:
Video: Teach Your Children to Become Financially Independent (Part I)

If you have read Robert Kiyosaki’s books you know that one of his big griefs is that schools do not teach proper financial knowledge. After working in the school system, in primarily low income and first generation middle class schools, I have come to not only agree with this statement, but to say that this lack of financial Knowledge is about to seriously hurt us as a country.

I don’t to come across as a doomsdayer here. I don’t believe that we are already in full crisis mode, but I do see us racing toward that. Without the proper financial knowledge the poor and the middle class are just going to get weaker, and the rich are going to get stronger. There is going to be an ever widening gap.

For me growing up in a solid middle class family I was not given any financial knowledge at all. As a matter of fact speaking about money was almost as bad as speaking about sex. My parents were deeply in debt, and they still are. As I learn more I am beginning to realize that my parents are even deeper in debt than they think. It is a shame.

So who has to make up for it? Well in my case it is me, my brother and sisters. But are we going to be in any better shape? Not without learning on our own. The only financial knowledge I got in school was how to balance my checkbook, and an elective class on the stock market crash of the 20’s and the Great Depression, and most of that class was on the Great Depression.

It is an evil cycle to get into and very difficult to break out of. In our school we say we give education about finances but it still is taboo. I run a game at the end of my Algebra class that I call Rich Student. Yes it is a total rip off of Robert Kiyosaki’s books, but it does not have anything to do with his game. The discussions in the class are limited only due to time. We talk a little bit about how Real Estate works, a little bit about how the Stock Market and true investing works, and we talk about developing incomes on line. Some students get it right away and do well, some never understand. But, if the students don’t have me as a teacher they will go their whole career without getting any financial education at all.

Lets talk solutions, not problems. So what is needed?

• Budgeting Skills

  We need to go beyond balancing the checkbooks, beyond saying simple subtract our bills from our paycheck, and start teaching what the rich already know. We need to teach our students to pay themselves first and if they can’t pay their bills they need to either figure out how to eliminate some, or find more money somewhere.

• Credit Scores

  It seems to me that the middle class and the poor must rely on their credit scores more an more to get out of where they are at. How do we protect this? How do banks calculate this. Most students, and probably their parents, have no idea what this means. They need help to get out of where they are at. That help is so dependent on this score. Students need to understand more about this.

• Real Estate

  Not only do the students not understand about houses they are misinformed. Houses may be an investment if bought properly, but they are not an asset. Students have no idea that they can pay up to 4 times the purchase price for a home after all their payments are done. They have no idea that a larger down payment and a better credit score will result in lower payments. They have no idea how to buy a house that will result in an income generation.

• Investing

  Students are completely confused about investing. They think that their parents are investors because they have a 401K or some mutual funds. They have no idea what it means to be an investor and invest in companies. As a matter of fact most students are afraid of investing in companies because they think that it is too hard. They don’t understand how to do it so they don’t. They have no idea what the difference is between a mutual fund, a retirement plan, and what stocks, or shares in a company are.

It is a no wonder that underprivileged kids think that the only way that they are going to make money is to play sports, rap, or deal drugs. It is sad that those are their heroes. If you disagree substitute teach in a public city school and listen to the conversations. You may be surprised at what they talk about.

~ www.coachkip.net 

Originally posted here:
Lack of Financial Knowledge in Schools