by Kim Kiyosaki
isbn: 978-1-61268-085-9
notes:
Financial education is discovering where you are and what you have financially and then determining where you want to go.
If money were no issue and you had all the money you needed (and assuming you have already taken your much-deserved extended vacation), what would you do differently regarding... your profession or career, health and fitness, financial life, personal and spiritual well-being, marriage/primary relationship, children, other family members, whatever else is important to you?
To have a strong foundation requires: knowing what makes up the foundation you have, getting rid of whatever makes the foundation weaker, building and adding what will make your foundation stronger
If an investment opportunity that I want appears today, do I know what I have and don't have available financially, and do I know what funds I need in order to won this investment? (Know what you have. Know what you don't have and still need.)
Be truthful about all income that comes into your household
Be honest about your expenses (Include the ones that make life enjoyable)
What investments do you own?
- What is making you money without you working for it?
- What price did you pay for the investments?
- What is happening with that investment today?
If you stopped working today, how long could you survive financially at your current standard of living?
your wealth number = available money / your monthly expenses
The optimal number is infinite.
Other financial experts assume that you will have a fixed amount of money to live off that earns you a small amount of interest and you will have a lower standard of living during retirement than when you were working due to loss of paycheck and rising medical expenses as you age.
Rich woman philosophy assumes you have income coming in every month that equals or exceeds your living expenses and your standard of living remains the same or increases.
Today it is nearly impossible to save your way to retirement because of rising taxes, inflation, lack of pensions, future rising interest rates, devaluation of dollar and other currencies, insolvency of Social Security, Medicare, Medicaid and other entitlement programs, and insufficient retirement accounts.
Income from infinite wealth plan comes from putting your money to work.
2 primary outcomes an investor invests for is Capital Gains and Cash Flow. A 3rd way is called a hedge which is like insurance used to offset possible losses. For example reserve account for rental property, silver and gold, stock option is the right but not obligation to buy a stock (a call) or to sell a stock (a put) at an agreed-upon price within a certain time period or on a specific day. (With a call option you are betting that the price of that stock is going up.)
Cash flow - cash that flows in every month without you working for it is produced by investments, or assets, generating cash flow which is called passive income. Primary focus in building infinite wealth because most people can't save their way to retirement today, you have control, you can control the choice to stop working or not.
You must know if an investment will give you cash flow (dividends, rental income), capital gains, a hedge (silver), or any combination of the three. You must decide which result you want from your investments.
Income statement lists Income/Expenses
Income can be ordinary, portfolio, passive.
Balance sheet lists Assets (things that put money in your pocket whether you work or not)/ Liabilities (things that take money out of your pocket.)
Strategy for infinite wealth is acquire assets that give you cash flow. Once a dollar goes in the asset column, it stays in the asset column.
to realize your reward of financial freedom really demands that you stay true to your values, loves, dreams, talents, wit, silliness and everything that makes you, you. Kolbe index can be used to identify a person's natural, innate and unchanging talents. Journal to find the truth about yourself and the environment you are in. Write down any and ll thoughts that come out for your eyes only. Write until you get an answer, until the issue is complete.
What's wrong with saving money today is low interest rates, quantitative easing (government printing money), inflation, worth-less money. Save as a shore term proposition while looking for your next investment. Something that will give you a solid return.
Increase and expand your (cash flow) income instead of living below your means. ok to live below your means in the shore term as a part of a long-term plan to expand your means. Living below your means can kill your spirit, make you less of who you are, sentences you to a life of mediocrity.
Question everything. Does it make sense for me? pros and cons. will it get me to my financial goal? Think for yourself and don't blindly accept and follow traditional financial advice.
4 tests to find good advice
choose advisers wisely - seek out people who have actually done what you want to do
practice what they preach - are they taking their own advice
Consider the source
Adviser or sale person, what's their agenda? how do they benefit/ get paid?
Do you trust this person
3 keys to longevity
purpose - sense of being of value to selves and others
optimism - bright and positive outlook on life
resiliency - possess the ability to recover from a setback
Turbulence, ask what happened, what exactly is the problem, what can i do now, who can i call now who knows more about this than i do, what info do i need and where can i find it now?
investment offering should be clear and concise
numbers, past operating, best and worse case scenario of future numbers
explain why and how this investment will increase in value in the future
expected rate of return on money invested.
ROI= annual investment income (cash flow) / cash invested
Rules of every investment
- put money in your pocket (cash flow, appreciation)
- must stand/ survive alone
- want to control investment (income, expenses, debt or at least monitor and stay on top of what's happening
- should have exit strategy or exit options (price, date, certain market events, or personal events)
- stop-loss order, when you will sell if stock doesn't move in your favor
- take-profits order, when you will sell and take profits when the stock does move in your favor.
- if you don't understand how the company makes money, then don't invest in that company
- if it looks too good to be true, then it probably is.
- preserve capitol and create growth is a possible goal
understand mission and purpose, what's your money's higher purpose
results are what count, how much money did my money make me. results require action
always keep learning
OPM presentation; project, partners, financing, management
2 rules on partners
Never take on a partner who needs money
never give equity to a person whose services you can buy in the marketplace
Buffettology
the new buffetology by mary buffet
commodities
- agriculture, livestock, energy, precious metals, industrial metals
- pros: easy entry, increase demand as economies grow, hedge against inflation and falling currency, tax advantages, home based business
- cons: no cash flow, no leverage, dependent on economy, volatile
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