Tag Archive for: Save Money

Rich Dad’s Increase Your Financial IQ

,

You’ve been told to work hard, save money, get out of debt, and live below your means. That advice is obsolete if you want to get ahead in life. Robert Kiyosaki argues these exact points in his new book, Rich Dad’s Increase Your Financial IQ.

Which is the latest volume in Kiyosaki’s popular “Rich Dad” series of books – two books include: Rich Dad Poor Dad, and Rich Dad’s Cashflow Quadrant.

Robert T. KiyosakiThese best-sellers have motivated many people (including my family) to take control of their financial lives. Both of these books have been summarized for you here.

Here’s My Rich Dad’s Increase
Your Financial IQ Book Summary!

Financial Intelligence

“It is not real estate, stocks, mutual funds, businesses, or money that make a person rich. It is information, knowledge, wisdom, and know-how, a.k.a. financial intelligence, that makes one wealthy.” – Robert Kiyosaki. 

Kiyosaki divides financial intelligence into five “Financial IQs”:

  1. Making more money. This is measured by how much money you earn. If you make $120,000 a year, you have a higher Financial IQ than someone earning $40,000 a year.
  2. Protecting your money. Once you earn your money, you need to hold onto it. So you need to protecting your money, especially from taxes.
  3. Budgeting your money. “Being able to live well and still invest no matter how much you make requires a high level of financial intelligence,” Kiyosaki writes. This Financial IQ is measured by how much money you have left after expenses.
  4. Leveraging your money. This Financial IQ is measured by return on investment. Answer this: How well do you make your budget surplus generate more money?
  5. Improving your financial information. Financial information doesn’t just mean knowledge of basic financial concepts, but also means detailed knowledge of the investments you make.

Most of the book is devoted to exploring these five aspects of financial intelligence in detail.

Financial IQ #1: Making More Money

Many people fail to acquire wealth, Kiyosaki says, because they want the money without the work. He writes,“What many people do not realize is that it’s the process that makes them rich, not the money.”

online profits in bags of money

It’s by learning to make money that you can continue to make money.

In order to make money, you must also learn to control your emotions. You must learn to defer gratification. Don’t sacrifice your financial future for a few bucks today.

According to Kiyosaki, the key to making money is learning to solve problems. “In order to grow wealthy you must come to terms with the fact that problems will never go away,” he writes.

Identify the problems preventing you from wealth, tackle them head-on, and the money will follow.

Financial IQ #2: Protecting Your Money

Once you’ve begun to make money, you need to protect it from the 7 financial predators.

  1. Bureaucrats — We need to pay taxes, but it’s our job to (legally) pay as little as possible.
  2. Bankers — Banks are constantly trying to siphon bits of your money in the form of fees. It’s important to watch out for and protect against this.
  3. Brokers — Like fees from brokers they can chip away at your wealth. He cites brokers who “churn” accounts, buying and selling stocks frequently in order to generate more commissions.
  4. Businesses — “All businesses have something to sell,” Kiyosaki writes. As their job is to part you from your money; yours is to keep it. He suggests asking yourself whether any particular purchase will make you richer or poorer.
  5. Brides and beaus — Money plays an key role in any relationship. You must trust your partner, must reach an understanding about finances.
  6. Brothers-in-law — Here, his point is that in order to protect your estate from family members you don’t intend to share it with, you need to plan for your death.
  7. Barristers — Finally, it’s important to protect yourself from legal difficulties.

Even though Kiyosaki lists seven possible pitfalls, he offers little practical advice for coping with them.

Financial IQ #3: Budgeting Your Money

million-dollar marketing on a budget

There are two ways to solve a budget crunch: decrease your spending or increase your income. Either will erase a budget deficit, but Kiyosaki believes (as I do) that in the long run, increasing income is a better solution.

Kiyosaki explains that it’s important to think of a budget surplus as a fixed expense. If you decide to save 10% of your income, then make this ten percent a fixed item in your budget.

Treat it just as you would any other bill. Pay yourself first. It’s also important to refuse to live below your means – instead increase your means.

Financial IQ #4: Leveraging Your Money

leverage moneyI found this chapter to be the longest and most frustrating chapter of the entire book. It represents the core of Kiyosaki’s financial philosophy. However it’s not presented in a way that makes it relevant to the average person.

Leverage — borrowing money to increase the power of your own cash is good. If you have the financial intelligence to control the investment. But if you’re not in control of the investment, then leverage is risky.

“Most of the people being hurt by the real estate meltdown are people who were counting on the real estate market to keep going up and increasing their home’s value,” he writes.

They borrowed against their home’s inflated value, however had no control over whether the housing market rose or fell. This is a lack of financial intelligence.

Kiyosaki argues that one should use leverage to make low-risk investments, investments in which you, as the investor, have control. This sounds great, but he doesn’t provide any relevant examples.

He only discusses his recent purchase of a 300-unit, $17 million apartment complex in Tulsa, Oklahoma. I don’t know about you but I do not $17 million to invest into one investment. The average person might only have $17,000? or even $1,700 to invest with right now?

So we are left wondering at the end of this character on how does the average person make leverage work for them?

Financial IQ #5: Improving Your Financial Information

Financial Tools for Small Business
In order to improve your financial information, it’s important to:

  • Separate fact from opinion. Many gurus are happy to offer their opinions — “gold is going up!” — but it’s foolish to make financial decisions based on these. Base your decisions on facts.
  • Verify information. Don’t trust just one source of information, but seek confirmation from other parties.
  • Know the rules. If you don’t understand how an investment works, don’t make it. “Rules provide a valuable source of information about how the game of money is played,” Kiyosaki writes.
  • Understand trends. Trends are historical facts. Smart investors can use trends to make informed decisions. However, it’s important to note that trends do not project to future facts. Only to opinions about possible futures. Still, trends are valuable sources of financial information.

“Ultimately,” Kiyosaki writes, “it is not the asset that makes you rich. Information makes you rich.”

Though an overview of the five Financial IQs forms the bulk of this 200-page book, it’s actually the last fifty pages that hold the most value. Where Kiyosaki discusses “the integrity of money” and explains how to develop your financial genius.

Financial Integrity

I like the idea of Rich Dad’s Increase Your Financial IQ. The book fills a niche about which little has been written.

It’s motivational. It’s a breath of fresh air and offers a perspective often missing in personal finance discussion. I also like that his writing always motivates me to action, pushing me to pursue my goals.

However, there is #1 Point I Really Do Not Agree With…

Robert T. Kiyosaki

Diversification isn’t a hoax, or a scam. Other than Kiyosaki, it’s embraced by most financial authors I’ve ever read or heared about.

Diversification is a central belief of the modern portfolio theory. It’s backed by facts, not opinions.

In the book Kiyosaki says “The richest investor in the world, Warren Buffett, does not diversify.” His implication is that you should not diversify either, but that’s completely counter to what Buffett believes.

Warren Buffett quote make money while you sleep

For 99% of all investors, Buffett recommends diversified index funds. So It’s duplicitous of Kiyosaki to pretend otherwise.

I hope you enjoyed my summary of Rich Dad’s Increase Your Financial IQ. If you would like to read it yourself you can get a copy here.

As always with Kiyosaki, there were more golden nuggets of information to be found in his book to really get you thinking.

If you want or need any help connect with us on one of our social media platforms or just Messenger us (Private Message Us) on our Facebook Messenger link – m.me/EasyOnlineBizSolution

I will leave you with this message: ‘if you do what you love – money will follow.’

Talk Soon,
Nicky Cane

online strategy sessions banner

Baby Steps Achieve Lasting Business Success

“The journey of a thousand miles begins with one step.”
– Lao Tzu

If you haven’t already. It’s now your turn to take the necessary baby steps towards business success.

While you may have a large-scale idea for a new business, sometimes it’s better to take just a small part of your plan and focus on starting your business on a small level.

If this is your first business, you may want to target an endeavor that will help you build skills without wiping out your nest egg completely.

A business that can succeed on a small level gives you great training wheels for building the experience, knowledge, and competency you’ll need to take your company to the next level.

Taking Baby Steps is the Way to Go

Below are several reasons why it might be your best bet to start small for business success.

Reason’s Why…

1. You’ll Save Money

Starting with a narrow scope of business means you can run it out of your extra bedroom or den. You won’t have to rent office space or furnish a suite.

There are even tax incentives or deductions you can take to save money as you build your business on the small side. If you do need specialized space for your endeavor, you can investigate subleasing space from other entrepreneurs, which reduces costs.
rolling in money lady excited

2. You’ll Need Less Capital to Get Started

Bootstrapping is an effective strategy that allows you to grow into your business and keep initial financial outlays on the low end.

Instead of stressing over technology requirements and phone systems, you can concentrate on creating your sales funnel or refining your product. The fancy phone system can come later (if at all). A lean business structure keeps you flexible and focused.

3. Learn as You Go

When you base your business on a hobby, you can start by making a handful of products, selling them, then growing when you’re ready.

As your business takes off, you can educate yourself in other areas of running a business, creating a formal business structure, managing employees, and meeting regulatory requirements.
Dirty Words

4. You Can Start Today

If you set your sights on a small enterprise, the barriers are lower and you can get going more quickly. You don’t need a huge infrastructure, massive staff, or complete line of products to get started.
Baby Steps to online successYou Have NO Excuse for not Starting Your Business Today!

By doing everything yourself to start off with, you’ll learn all that’s needed to keep your company going. Of course, it’s great to hire out those things that you are not able to do, but if you have direct know-how those experiences inform your executive decisions down the road.

It will also help you make better decisions that impact your customers. While financial investment is necessary to building a business, your sweat equity is just as necessary to growing your endeavor.

6. It’s Simpler to Run

Smaller companies are lean machines and often have higher profit margins because they are simpler to run. There are fewer costs associated with overhead and administrative requirements with a small-scale business, and you can reassess market changes frequently and pivot when necessary.

When big jobs come through, you can team with other small companies or hire contractors to deal with the workflow if it’s more than you can handle.

Slow and steady wins the race.

Start small to test the market. Grow with intention. Sample the cheese before you bet the farm on your idea. When it comes to small business success, the truth is: scaled-down, slower growth companies do just as well as their big sisters.

Baby Steps to Business Success Requires Asking Yourself the Following Questions:

At the end of all of your blood, sweat and tears, what is it that you want to be said about how you used your life and your business to impact the lives of others?

Think about it this way.

  • What is the story that you want other’s to tell about your business?
  • What is the story that that you will tell others to help them “get” what it is that you do, and what it is that so special about your business that warrants their attention.
The Story is all that your customers will take away from you really in the end.

StorytellingSure, they may walk away with some kind of product or service offering.

  • But over time, that product or service offering will fade out of existence.
  • And then…all that they are left with is the story, the memories of what it is that your business did for them

Taking baby steps to business success requires that you take the time to figure out the story of your business, it’s impact, and how it operates to have a defined impact in the lives of your targeted customer audience.

  • Story is a powerful tool in helping you to figure out exactly what it is that you want your business to do, and how you want it to grow.
  • Whether it was good, bad, or ugly…your customers will use the power of story to tell others about the interactions with you.

When Starting Your Business…

  • Know your customer’s wants, needs, desires and frustrations inside and out.
  • Then fervently design your business to meet and exceed their expectations…and then allow them to walk away with a story and an experience that strengthens their life.

This strategy is useful in almost every area of life, and when trying to achieve nearly any goal.

Just work towards one mini-victory at a time and make sure you celebrate each achievement in some small way—a little success goes a long way in propelling us to the finish line.

Here’s to your success in designing a business that customers will absolutely crave!

We have found an all-in-one business platform. You’re given your own website and back office to help you run the business. Plus you get capture pages and training to get the business off and running.
Check it OutEvery time we try to leap across multiple steps in building our business, we land on our butts. If we choose to take slow and steady baby steps and inch along, that way we’ve make good progress.

Usually, when we try to leap, not only do we fail in what we’ve trying to do. But also wasted weeks or months when we could have been taking the steady route.

Raising a child is like building a business (That’s what Dave tells me).

With my (Dave’s) kids, while they were in primary/ elementary school my wife and I (Dave) would have looked to have them got taught calculus, but it’s not realistic. Or while my (Dave’s) kids were in high school, we might wished they skipped TAFE/ college and went straight to a high paying job but it simply doesn’t work that way.

Storytelling

When Building Our Businesses, Why Does the Logic about Parenting get Thrown out the Window?

Imagine These Scenarios…

You can work on a partnership that might grow your sales a hundred times.
OR
You could work on about a dozen small opportunities. That each could grow your business two or three times, and maybe more over time if they gain traction.

What Would You Do?
We know we’ve fallen for the temptation of the big opportunity several times. Most instances, when that happened we wasted months and didn’t get very far at all. Something went wrong.

With some grey hair (Dave), we’ve learnt that exploring many smaller things works better in the long run.

We think the temptation to pursue the “Big Thing” is a part of our business culture. That’s where we celebrate unicorns, and encourage entrepreneurs to create the next Apple or even Facebook.

Sadly, this obsession with quick growth and grandeur often can lead to disaster.

Remember, when a tortoise and a hare are racing, often the tortoise wins the race.

We are here to help. If you want any help in your Entrepreneurship endeavors, just Messenger us (Private Message Us) at our Facebook Messenger link – m.me/EasyOnlineBizSolutions

Get ACCESS to the best FREE tools and resources for entrepreneurs and business people by going to our tools and resource page or Subscribing to our Entrepreneur Newsletter.

Talk Soon,
Nicky & Dave