Raise Your Financial IQ With Rich Dad
Raise Your Financial IQ With Rich Dad
So many of us are swimming in debt, trying to climb up walls with no grips, only to slide back down to the bottom soaked in frustration.
Robert Kiyosaki has been there. You probably remember him from my Money Revealed docuseries. He speaks a lot about how he lived within the struggle and came out on top.
Robert used to have debt collectors banging on his door and now he never has to work another day of his life!
Doesn’t that sound like a dream come true?
Today, Robert hands us the key to success by teaching us some of the basics on how to turn our financial dreams into financial realities.
Let’s dive right in…
Dr. Patrick Gentempo
Think You Are a Conservative Investor? Think Again
When I talk to friends about being free, in the financial sense, they often tell me that I take too many risks and that they are more conservative when it comes to investing. But a conservative investor is just someone who does not have a financial education either because they are scared of money or just don’t want to take the time to learn.
For example, if you go to see financial planners, they will often ask, “What level of risk are you comfortable with when it comes to your investments?” The conventional thought is that the higher the return, the higher the risk.
But the truth is the lower your financial intelligence, the higher the risk, and the higher your financial intelligence, the lower the risk.
Think about it.
If you tell your financial planners you are a conservative investor, they know right away that you are uneducated about investments. This gives them the opportunity to prey on your weakness and sell you whatever they want!
And as dumb as that sounds, thousands hand their money over to financial planners every year. And according to the Bureau of Labor Statistics, there are nearly 300,000 personal financial advisers in the U.S.!
Even I can relate to this. I don’t like taking risks with money, but in the past, I’ve invested in stocks I knew nothing about, blindly followed the recommendations of a money manager and even invested in a hedge fund deal that seemed too good to be true… and it was.
The good news from these experiences is that I learned from my mistakes and will never invest in anything I don’t fully understand again.
Investing Is Not Risky. It’s the Lack of Financial Education That’s Risky!
If you break it down, an investment — no matter if it’s in the stock market, a business, a property or something else — is just an investment. It’s you, the investor, who determines whether or not the investment is good or bad for you.
Now, not every investment you choose will be a winner, but the more financial education you have, the better your odds.
Plus, if you have done your research, you will know why you are making a particular investment and what is happening with the money you invest. If you just turn your money over to a financial planner to invest for you, you lose control and…
When You Lose Control, Your Risk Factor Goes Up Significantly.
As Warren Buffett says, “Risk is not knowing what you are doing.” All of us make mistakes when it comes to investing. And most people are busy with other things and do not want to deal with complicated numbers and investments. It’s so much easier to participate in your company’s 401(k) or hand your money over to someone else to invest for you.
I felt the same way. But then I took the time to look at numbers differently and started seeing them as the way to my true money freedom.
Once you increase your financial education, you can invest the way you want based on your personal goals. More importantly, you can take control over your finances and reduce the risk involved with investing.
Four Ways to Find Opportunities
Many people may not be satisfied being told to find opportunities. So for those who want a to-do list on how to get started, I will share with you some of the things I do in an abbreviated form:
1. Stop Doing What You’re Doing
In other words, take a break and assess what is working and what is not working. The definition of insanity is doing the same thing over and over and expecting a different result.
Stop doing what is not working and look for something new.
2. Look for New Ideas
For new investing ideas, I go to bookstores and search for books on different and unique subjects. I call them formulas. I buy how-to books on formulas I know nothing about.
3. Find Someone Who Has Done What You Want to Do
Take them to lunch and ask them for tips and tricks of the trade.
4. Take Classes, Read and Attend Seminars
I search newspapers and the internet for new and interesting classes, many of which are free or inexpensive. I also attend and pay for seminars on what I want to learn.
I am wealthy and free from needing a job simply because of the courses I took. I have friends who did not take those classes who told me I was wasting my money, and yet they’re still at the same job.
The Opportunity That Changed My Life
The opportunity that changed my life was a seminar I attended. I had bill collectors screaming at me. I was finding odd jobs everywhere to find extra money to pay my bills and calm the screaming lenders. And I had the money I was saving. Saving for the opportunity.
My opportunity came in the form of a course teaching real estate investing. This was my opportunity and it cost $385! (That’s $2,069 in 2017 dollars.)
Notice my opportunity was not a friend telling me about a stock tip. It wasn’t me going out and finding the best real estate deal. No. Even the best stock tip or the best real estate deal would have failed because the deal can only be as good as the investor.
I needed to train my mind. I needed education.
My rich dad was fanatical about exercising your mind, the most powerful computer in the world. He’d say, “My brain gets stronger every day because I exercise it. The stronger it gets, the more money I can make. Keep using your brain and soon your mind will show you ways of making money far beyond what other people see.
“You will see things that other people never see. Most people never see these opportunities because they’re looking for money and security, so that’s all they get. The moment you see one opportunity, you’ll see them for the rest of your life.”
As I mentioned earlier, the opportunity I found was a real estate seminar. The seminar showed me the way to analyze a deal and how to get a deal done with little to no money down.
If you reread the ways to find opportunities, three of the four strategies are about getting educated. That is not a coincidence. Again, even the best stock tip or the best real estate deal will fail if I’m not financially educated. The deal can only be as good as the investor.
So what happened after I took the course?
First, before I answer, I need to highlight that I completed the course. I did all the work required. I did not just take the course. I fulfilled the course. I accepted the value of the course and I took the course with the mindset that the course could change my life.
I spent $385 and that course brought me life. I got out of debt at a rapid pace and now I don’t have to work for the rest of my life, because of that one course. Now I go to at least two such courses every year.
That course was the opportunity I was looking for. The course taught me how to buy assets, even in the situation I was in. Future courses have taught me how to build assets.
So what’s it going to be?
Are you going to be a “conservative investor” and turn your investments over to others, or are you going to increase your financial IQ, take control of your money and actually start your journey to true independence in the financial aspect of your life?