Thursday, November 30, 2006

Four Reasons… That Hold People Back from Becoming Power Investors

Last month in Rich Dad’s Community News we featured an excerpt from the newest Rich Dad book, Rich Dad’s Who Took My Money? titled ‘The Power of Power Investing.’ Your feedback and comments have been overwhelming…so here are a few Top Tips from Sharon – from Who Took My Money? – that can help to clear your path – and your thinking…

Reason #1 • The Power of the Word Can’t

So you find yourself saying “It’s easy for him to say! I can’t do that.” In Rich Dad Poor Dad Robert shared how his poor dad would always say “I can’t afford it!” His rich dad, on the other hand, forbade him from saying “I can’t afford it!” and challenged Robert to ask instead, “How can I afford it?” The word “can’t” closes your mind, while the phrase “How can I?” opens your mind.

Reason #2 • The Power of Easy

Rich dad said, “Money flows to the person who makes life easy.”
However, creating an investment that makes life easy is not easy at first. But once created, the money starts flowing.
It may sound contradictory but remember, Rich Dad also said, “When it comes to investing, the people who take the hard road find life easy. People who take the easy road usually find life hard.” If you take the time to create the investments today, your life will become much easier later.

Reason #3 • The Rich Make it Easy to be Poor

It is so much easier to get bad debt (personal debt like credit cards that you have to pay for from personal funds) than to get good debt (debt that is paid for by the income from the underlying investment). Personal debt is at an all-time high.

Reason #4 • Investing Without Guarantees

This comes back to investing for actual cash flow today versus the promise of capital gains tomorrow.

Can you see yourself controlling each of these reasons in your personal investing strategy so you can become a power investor?

Wednesday, November 29, 2006

Goals are Great… if they’re SMART Goals

We hear lots of talk about goals and goal setting… especially as one year draws to a close and we set our sights on the year ahead. Mid-year is a great time to take a hard look at the goals you’ve set for yourself – personal goals, family goals, career goals, health and fitness goals, financial goals… to name a few – and assess your progress and celebrate your wins.

If your goals are SMART Goals, you’ll have determined a way to measure and assess them and, in doing so, dramatically increase your likelihood of achieving them.

SMART GOALS are: S - Specific Goals should be detailed, clear and tangible. For example, "Lose 20 pounds" vs. "Lose weight", or "Increase my passive income by $5,000 per month" vs. "Have more money."

M - Measurable Quantifiable and results-oriented with a formula in place for assessment.

A – Ambitious (not just attainable) Don't make this a cakewalk - stretch! 'Attainable' is great... but if your goal is realistic (our 'R'), it's, by definition, attainable. You want your goal to be ambitious so you'll have a BIG win to celebrate!

R – Realistic Setting goals that have little hope of success can be an exercise in futility. Unrealistic expectations breed frustration and failure and erode confidence.

T – Time-bound When will you achieve this goal? Are there interim milestones that you can set? Detail those short-term benchmarks - and precisely when you'll hit them - and acknowledge your accomplishments.

How did you fare? It’s never too late to apply the Smart Goals ‘formula’ to the goals you’ve set… or begin setting new goals TODAY. ‘Keeping score’ is an important part of Rich Dad’s Game of Money… and before you can score you must have goals. One last thought: commit your goals to writing. If they're not written, they're not real.

Tuesday, November 28, 2006

Steps to Drive Down Bad Debt

“The rich have more debt than the poor. The difference is that they have good debt, and the poor and middle class are loaded up with bad debt.” Rich Dad

Bad debt makes you poor. Bad debt is debt for something that buys a liability that takes money out of your pocket. In order to take control of your cash flow, you must drive down your bad debt.

Steps to Drive Down Bad Debt By Robert Kiyosaki and Sharon Lechter from Rich Dad's Guide To Becoming Rich Without Cutting Up Your Credit Cards

1. Take Stock of Your Credit Card Debt Take all of your credit cards out of your wallet or purse. Check the various outstanding balances on each one.

2. Pay Off Credit Cards with the Smallest Debt First Take the credit cards with the smallest amount of debt on them, and pay them in full first. Then, once you have paid off those cards, call the credit card companies and cancel them.

3. Pay Off Your Remaining Credit Card Debt Once you have the credit cards with the smaller amounts of debt paid off, do the same with your remaining credit cards. Keep whittling away at that outstanding debt until it’s gone.

4. Pay Off the Mortgage on Your Home When you have the credit card debt melted down, take the extra money you have and start to paying off the mortgage on your home.

Please understand that this is a process that, in most cases, cannot be accomplished in just one or two months. Depending on how much cash you have, this process of whittling down your credit card debt may take several months, or even years. But do it—because it’s a wonderful financial feeling when you no longer are a slave to those monthly bills. Even better, you’ll discover that you now have extra cash each month to pay off other debt.

The best news is that those individuals who have the willpower to follow these simple measures will find themselves financially solid and free of major debt within a matter of a few years. It may sound impossible to you in your current financial situation, but these measures will work for you.

Ten Secrets to Success

Most successful people have ten traits that, when combined, can turn dreams into reality.

1. How you think is everything Always be positive. Think success, not failure. Beware of a negative environment.

2. Decide upon your true dreams and goals Write down your specific goals and develop a plan to reach them.

3. Take action Goals are nothing without action. Don’t be afraid to get started. Just do it.

4. Never stop learning Go back to school or read books. Get training and acquire skills.

5. Be persistent and work hard Success is a marathon, not a sprint. Never give up.

6. Learn to analyze details Get all the facts, all the input. Learn from your mistakes.

7. Focus your time and money Don't let other people or things distract you.
8. Don’t be afraid to innovate; be different Following the herd is a sure way to mediocrity.

9. Deal and communicate with people effectively No person is an island. Learn to understand and motivate others.
10. Be honest and dependable; take responsibility Otherwise, numbers 1-9 won’t matter.

Source: Investors Business Daily