Rich Dad Poor Dad – Robert Kiyosaki

Posts Tagged ‘weekly-links’

How many times have you heard that good things come to those who wait? What about being told that if you just stay positive, you’ll get what you deserve? That’s all well and good — these beliefs are probably necessary to make sure that people can live in harmony.

But overall, I’m seeing a trend towards sensitivity and complacency even in personal finance. And that’s not the place for it. Sure, you can create a comfortable lifestyle on the income you earn as a cubicle dweller. But you’ll never get rich that way. I’m not even talking about yacht or golden bathtub rich, either. I’m taking about a comfortable retirement, college funds for your kids and that flat panel TV screen you’ve been lusting over for the last year.

To get even that far, you have to be aggressive. You have to make sure you get a raise or start a business or come up with the cash to invest. Heck, occasionally you have to be flat out mean: a bank may make a mistake, and without you telling the teller or manager that you’re ready to move your account, you may not get that mistake fixed. The same holds true in hundreds of situations that occur every day: a person willing to go to bat for herself is going to get a problem solved long before a person relying on her positive thoughts.

It’s up to you if you want to build up the assets you’ll need to live comfortably — let alone try to make it to the private jet level of wealth. Sitting around waiting for someone to be kind enough to hand you the keys to a jet just won’t work. Instead, you have to get out there and push. You need to work hard to get that far, and you may even need to go to some extremes: practice frugality, work extra hours, strike out on your own.

I think it’s time to exercise some aggression in pursuing our goals. I’m making my wealth-building strategy more aggressive: I’m pinching pennies hard enough that Abe Lincoln screams. I’m looking for better investments for my money — I’m learning as much as I can about investment so that I don’t have to rely on an adviser, who may have different goals for my money that I do. Heck, I’m even contemplating holding a garage sale — not all wealth-building strategies have to be extreme. Where can you get aggressive? Where can you push a little harder and save a bit more money?

Share This

Read the original:
Aggression: The Necessary Trait for Wealth-Building

I admit it: I spent pretty much all of last night drooling over cell phones: the n95, the iPhone and half a dozen shiny new toys. I don’t need to change phones yet, but pretty soon, it looks like I’m going to have to break down and buy something that I can both send email with and fit in my pocket. I’ve held out for quite a while, convincing myself I could do without. And I’m pretty sure that this decision isn’t about giving into my technolust. I’ve checked my motives, and I’m sure I’m going to buy a phone for the right reasons.

But as nice as these gadgets are and despite the fact that it’s almost a justifiable business expense, I’m planning to hold out at least until August to make a decision on what I want. I’ve been doing my research and picking the brains of a few people who know a thing or two about cell phones. And all my research tells me to wait.

In the past, I’ve put off purchases for a variety of reasons:

• Waiting until I can afford to plunk down cash and avoid interest.
• Waiting until an expected price drop kicks in.
• Waiting until I can talk an employer into buying it for me.
• Waiting until I’ve heard feedback about new features and new bugs.

But this decision is only in part about money. I do want to save up a little more cash before I decide on a new phone/camera/everything else each of these things do. But, I also want my choice of technology. Just about every phone company and every network has some big plans for this summer. There are rumors of a 3G iPhone being rolled out. T-mobile swears that they’re bringing out a 3G network. I want to wait until I have the full range of choices before me — and hopefully a little information about the experiences other people have had with these new options, as well.

Sometimes the decision to hold off on a major purchase isn’t just about saving money. Sometimes, it’s about planning for the future: your needs, your options and your wishes. And, even then, you can save money: figuring out the features you’ll need in a year can make sure that you pick up a phone (or other gadget) that lasts long beyond your original needs.

Share This

Read the original post:
Pricing Cell Phones and Planning for the Future

It seems like our hobbies can quickly become the biggest chunk of our budgets, which, considering our priorities, may not seem like a good plan. But if you’re looking for a hobby that doesn’t require you to break the piggy bank to participate in, you might find a few suggestions here.

1. Cooking. You have to eat, no matter what — so why not enjoy the process of getting food on the table? And if you’ve been eating out or eating prepared foods (like Hot Pockets or Hamburger Helper), you may even be able to save a significant chunk of change.
2. Hiking. Taking a hike in your local national park isn’t going to cost you much. If you’re the outdoorsy type — even if you normally go in for something more extreme — a hike may be a nice way to relax. Hiking doesn’t require the sort of equipment camping, backpacking, rock climbing, etc. require, either.
3. Writing. Do you have an interest in telling stories? All it takes is a pen and a pad of paper and you can spend an enjoyable afternoon crafting a short story, a poem or a chapter.
4. Genealogy. Researching your family tree can offer you an opportunity to pursue a hobby that lets you easily involve your family. And, if you need a distraction for your great aunt at those family reunions, asking about family members you don’t remember can provide you with an easy conversation.
5. Bird-watching. Beyond an initial investment in a pair of binoculars, bird-watching is free. It’s a hobby that you can indulge in on vacation or at home. I’ve even known birdwatchers who enjoy just sitting down on their back porch and seeing what they can spot.
6. DIY. Doing just about anything yourself — from creating your own clothes to homebrew electronics — can be an enjoyable hobby. You may need to purchase some special tools, but, in the long run, you can often save some money. Personally, I love the unique clothing I can make myself.
7. Gardening. You’d be amazed at the amount of plants you can get for free: you can grow plants from seeds you find in melons and other food, many neighbors are happy to transplant overgrowing plants and some people just flat out give away plants

Beyond these suggestions, there are hundreds of options. Hobbies are important because very few of us want to work all day or sit around watching television all the time. The key, though, is finding a hobby that we not only enjoy, but that won’t eat up money that could go to other uses.

Share This

Excerpt from:

Energy efficient appliances seem ideal: not only are they better for the environment because they require less energy to run, they bring down your monthly utility cost by a significant amount. What’s not to love?

Yes, an energy efficient washer and dryer set can run a few hundred dollars more (based on glancing at price tags at my local big box store). However, according to the Energy Star website (run by the EPA), an energy efficient washer can save you an average of $550 over the life of a washer.

If you own your home, and are planning to purchase new appliances, you may already be thinking about whether you want to select energy efficient appliances. If you live in an apartment or other rental, bringing energy efficient appliances into your home may be much harder. Landlords who provide such appliances as washers or dryers tend to replace old appliances with whatever they want — that is to say, not necessarily what you want.

But, as long as you have to pay for your utilities, having energy efficient appliances is in your best interest. You just have to convince your landlord it’s also in his or her best interest. My current washer and dryer seems to be nearing the end of its run — I’m not entirely sure which of the two of us is older — and I’ve started putting together my list of arguments:

• I’ll be less likely to complain about the rent hike that they’re planning.
• There will be less chance of water damage because I hung up clothes to dry, rather than run an expensive dryer.
• The landlord gets to pocket a government rebate for changing residential appliances over to more efficient models. How much of a rebate the landlord can expect varies by state.

Honestly, I’m not really expecting my landlord to come through on this one. I’m fairly sure that the company managing my apartment complex has a storage closet full of washers and dryers of the same variety as the set in my apartment. They’ll probably just try to get me to hold out until whenever they’re ready to buy new appliances for the whole complex. But that won’t stop me from asking — and, hopefully, getting my fellow tenants to ask as well.

I think the savings that come from using energy efficient appliances are worth the effort to get them. It’s more than a feeling that I should do my part for the environment; it’s the fact that that energy prices are going to continue to rise for quite a while, I think, and every cent I don’t have to put into paying my electricity bill is a penny I’ll be glad to have.

Share This

Originally posted here:
Efficient Appliances: Good for the Environment and Your Wallet

Food prices are on the rise — more so than they have been in years. A dozen eggs costs 60 percent more today than it did just a year ago. And after so many years of only single digit food inflation, consumers are starting to worry.

There are a number of causes for rising costs. For one thing, the cost of transporting food has essentially skyrocketed, following the rise of gas prices. Gas prices are still going up, too. Americans have a long way to go before our gas prices are actually comparable with most countries (we’re currently sitting at less than half of what drivers in the U.K. pay), and it’s more than reasonable to expect gas prices to keep rising. Food prices will climb with them.

But there’s another reason inflating food prices: the use of corn. Of the corn crop grown in 2008-09, 31 percent will be used to produce ethanol, rather than food. This rising rate doesn’t just force the cost of corn for our table upwards — it also inflates the cost of beef, milk, chicken, eggs… anything that comes from an animal fed on corn, which is most of them these days. It also, by the way, drives up the cost of several types of plastic, which are also corn products.

That environment-saving ethanol everyone’s so fond of? Yep, it’s a leading cause in the cost of getting dinner on the table. And since the trend is reflected in the cost of food staples from every part of the grocery stor, there’s not much we can do about it. Cooking from scratch can only take a certain amount off of our food bill — we all are facing an ongoing trend that will impact us no matter what store we shop at or which coupons we clip.

Raising my own chickens is starting to look pretty good. It’s just about the only way I’ve been able to think of to avoid the rising cost of eggs. I’m not sure if I can talk my landlord in to it, though. I’m doing my best to plan ahead, but my wallet’s going to take the same beating as yours. I’ve cut down on eating out and buying prepared food. I even bake my own bread — at $4 a loaf, it’s a clear savings even if I do have to spend a little time in the kitchen.

How are you protecting your budget against the rise in food costs?

Share This

Continued here:
Food Prices Are Creeping Up

I’m not a huge fan of credit cards. Most cards feel like an invitation to rack up debt. But I have friends who swear by their credit cards — the kind which allow you to rack up rewards point by making purchases. And the types of rewards: one friend uses a card that lets her build up frequent flyer miles and score free plane tickets. Another has a card that gets him cash back (he’s started paying all of his bills by credit card).

It’s definitely tempting. I could use a couple of free plane tickets, and who couldn’t use a little extra cash back. I’ll admit that I’ve started looking at my options. I’m not entirely sold on the plan, though. I still have a few concerns (and if you have counter-arguments, I’d love to hear them).

One of my biggest concerns is setting up automatic payments off of a credit card, which seems like one of the best ways to take advantage of rewards points. It seems like adding more steps to paying my bills is just begging for me to trip up somewhere. Some mistakes are easily fixed, but I don’t want to put myself in the position where handling a problem costs more than my rewards points are worth.

I’m also worried about spending for the sake of rewards points. I’ve been out with several people who pick up the tab or purchase some item that they don’t need, justifying it with the statement: “It doesn’t matter — I’m getting points on my card!” I don’t think that earning points should outweigh saving money, but many of these rewards plans are set up to tempt people to do just that. I know that credit card companies want us to use our cards, so that they can make money, but I’m trying to be frugal and build savings — not pick up new toys to accrue rewards points.

Lastly, I’ve been struggling to put an actual value on rewards points. Is the time and effort to build up points actually worth the reward in the end? Could I be spending the time to sign up for a card, call about disputes and play musical chairs with my bill paying system to be earning money, rather than spending it? There are few credit card companies that don’t have at least a few hassles for their customers, after all.

I don’t think my concerns are enough to hold me back if I found the “right” rewards card, but I haven’t found one that tips me over the edge quite yet.

Share This

Continued here:
The Rewards Points Strategy: Making Credit Cards Worth It?

In the movie Citizen Kane, the business manager of the wealthy Charles Foster Kane makes the clearest statement regarding the accumulation of money I’ve ever heard:

It’s no trick to make a lot of money, if all you want to do is make a lot of money.

It’s true: if I were willing to focus all of my attention on making money — ignoring family, friends, hobbies, etc. — I have no doubts that I already would have my first million. I’m also certain that I’d be beyond miserable. While some people seem to enjoy that sort of lifestyle, I enjoy spending time with people and relaxing.

I won’t discount the ability to buy happiness — not needing to worry about money is one of the fastest ways to happiness I can think of, but I don’t feel the need to accumulate great piles of it. If I can meet my financial goals and live comfortably, why should I devote my life to earning more than that?

I want a nice home, a comfortable lifestyle and the ability to pay for the things that make life enjoyable, like travel. My goals are very clear, and I know the sort of income I need to reach to make sure I can afford them. Beyond my goals, though, I’m not very ambitious.

The secret to building a fortune is to spend all your time at it. You won’t have a balanced life — but some people don’t really seem to care about that sort of thing.

The secret to building a comfortable lifestyle is similar: work at it, but you can afford to relax far more often. It’s truly a matter of how much time you want to devote to the accumulation of wealth. Some people manage to devote only a few hours a week, some need a full 40 hours at the office. To determine where on the spectrum you want to be, decide how much money you need to meet your goals and break it down to the weekly income you need. Want to spend less time on generating an income, but still get the same return? Up the amount you can make in an hour. Become more efficient or get a raise.

What are your goals, and how far will you go to meet them? Do you only want to make money? Or do you want time to spend on the other things you consider important?

Share This

See the rest here:
The Trick to Making Money

There seems to be a belief that credit cards are outright evil. I’ve heard interest described as a tool of the Devil and lenders…well, money lenders have pretty much had a bad reputation throughout history.

But, honestly, most credit card companies aren’t out to ruin lives. While I would never dispute that there are plenty of companies out there that really are predatory, that’s not actually the goal of most creditors.

Credit is a good thing. The idea that, if you are willing to pay a bit more over time, you can get a house or equipment or whatever can truly be a benefit. Credit is what allows new companies to get off the ground before they start making money.

The real problem is not predatory creditors. It’s an issue of creditors knowing that it’s usually better for both borrower and lender in the long run if the borrower can get credit. It seems to be an everybody wins situation: everybody but the borrower earns money on the deal, and the borrower gets a house or a car or whatever. The system breaks down when someone pushes it too far.

I think most people have a pretty good idea of just how far their income stretches. They’ll try to go further, and then we wind up with a sub-prime mortgage mess — for instance. I know that more than a few people with sub-prime mortgages were actually surprised that they had the credit to buy a house. One of my friends went house-hunting a little over two years ago with the understanding that his parents would help out with a significant chunk of the down payment. We’re talking a guy out of college only a year or two with a decent, but not great job, minimal savings and practically no credit. On what seems to be a whim, he went ahead and filled out paperwork for a mortgage based solely on his information. The bank offered him a mortgage requiring no money down. He was amazed that they’d offer him that much credit.

But too many mortgages to guys like that and the odds of one (or more) defaulting and the system stretches too thin. Same thing can happen with any other type of credit, and some how the creditors always wind up looking like the bad guys.

I get plenty of credit cards in the mail and, yes, I run them through the shredder. But I still have my own credit cards and I use them. Credit is a useful tool, as long as you take the time to use it properly.

Share This

See original here:

The Wall Street Journal’s personal finance columnist, Jonathan Clements, is leaving the paper after 14 years and 1,008 columns. The WSJ published his farewell column yesterday, and it may be the clearest explanation of why saving money is a good thing that I’ve ever heard.

Clements doesn’t advocate building up massive savings so that you can go retire and do nothing. He says that doing nothing gets boring after only a few months, and I have to agree with him. I can’t actually think of a single healthy retiree that I know who honestly sits around doing nothing. Some volunteer, some start second careers, some even go back to school — but they do keep active.

Instead, Clements’ last column is written to get us all thinking about what our savings really can do for us. Rather than funding the ultimate in sedentary lifestyles, Clements suggests our savings should do exactly three things for us — whether we’re wealthy or just scraping by.

1. Having money should allow us the luxury of not worrying about money. Building up savings, no matter how much, and generally living below our means reduce our need to worry about money problems.
2. Money should give us the opportunity to follow our passions, whether working for a worthy cause or learning a new language. We shouldn’t have to retire to get this benefit, either. I know a certain portion of my savings is earmarked to give me the opportunity to spend time on things I enjoy.
3. Lastly, money should buy us time to spend with our families and friends. Our friends and families make us happy and make life more enjoyable. And what’s the point, after all, of working if we’re going to be miserable?

I think it’s pretty clear that I agree with Clements’ opinion on the reasons we should make the effort to save. I think these three points show us a life that’s simply worth living — less worry, more enjoyment — and worth striving for.

Both Clements and I admit, though, that money is not absolutely necessary for any of these three benefits. It’s simply a tool to make them easier. You don’t have to save money in order to afford time with your family — but it can make the experience easier to manage. So can earning more, or living in a frugal manner. Your personal finance path is just that — personal. But I do think that these three points are worthy goals, no matter how you reach them.

Thumbnail image by Enrico Fuente

Share This

The rest is here:
Jonathan Clements Leaves The WSJ

I rely pretty heavily on Craigslist. I go looking for small gigs that can supplement my income, I learn about upcoming events and I find furniture to replace things that fall apart. (Best Craigslist find ever: 2 lateral filing cabinets, normally $400, for $20 each.

But I’ve found that Craigslist is getting harder to find the best deal or job on, simply because there are so many people spending so much time on it. I like the idea of Craigslist still — easy ways to find second-hand goods make my wallet happy and a little extra work makes my budget comfortable. It’s just become a matter of finding classified sites that have as many good deals, but with fewer people competing for them

I’ve got a list here of the other classified sites I’ve begun to keep a close eye on:

Kijiji — Kijiji is a relatively new player on the US market, although it’s been around for about three years in various European and Asian markets. So far, my experiences with Kijiji have been a bit hit or miss — their category structure isn’t as in-depth as Craigslist, but it’s starting to have a decently sized US user base and I expect that the the variety of ads will expand.

Live Deal — Live Deal is essentially the classified arm of the Yellow Pages and it operates more like a directory than a classified ad site. If you’re looking for any sort of work, Live Deal is bound to disappoint. However, it has impressive services listings, and if you’re just wanting to find a person or company to provide you with a service, Live Deal is a good bet.

Oodle — Oodle is rapidly becoming my go-to site. Oodle gathers up classified listings from a whole slew of classified sites (including the Washington Post, job sites and lots of others), as well as accepting classifieds on their own. I think it’s fair to say that I’ve found ‘oodles’ of stuff here.

AdPost — AdPost offers a set of listings I haven’t seen outside of the print classifieds before: business opportunities. I haven’t found an opportunity that strikes my fancy yet, but I know that a lot of people have been able to profit from them, so I keep AdPost in my list.

Backpage — For the number of Backpage listings I’ve responded to, I’ve had an excellent ROI. I’ve found a number of opportunities, work-wise, through Backpage. If job or gig-hunting is your main use for classified sites, I heartily recommend Backpage.

Freecycle — I’ve practically stopped using Craigslist to find stuff in favor of using Freecycle. For one thing, stuff I find on Freecycle is always free. For another, it’s guaranteed to be pretty close to home so I can pick it up fairly easily.

Share This

Original post:
Classified Ad Options, Other Than Craigslist

Whether or not real estate is the path to wealth is a tough question to answer. In her recent article about real estate, Thursday mentioned that the idea of building wealth through one’s primary residence has become a little tarnished. I agree because homeownership is not the best option in a lot of major metropolitan areas. In a past article, I showed why renting is smarter in the San Francisco bay area. However, homeownership and real estate investment are two completely different things. In areas with high rent and job growth, it may be wise to purchase a rental property during this soft market. Additionally, we are experiencing some of the highest foreclosure numbers in recent years. For savvy investors, now is the time to strike.

Where Are the Deals?

While foreclosures are everywhere, not all of them in all areas are good candidates for an investment property. I look primarily in areas that are undervalued, very much like a stock. I look for low real estate costs compared to income levels. I look at high rent amounts compared to real estate costs, much like a P/E ratio in the stock market. Lastly, I look for places with signs of growth. While there are many cities throughout the nation with my criteria, I’ve narrowed down my search to the Houston, TX area. On specific properties I look for homes built after 2000 in areas with good school districts. This shows me there is a stable rental market and maintenance is minimal. The property must also be in foreclosure or otherwise be significantly under market value. Take this property for instance. It’s something I would buy. It’s a foreclosed property listed at $107,000 and it is a prime candidate for anyone looking to get into real estate investing. Here’s a quick breakdown of the conservative numbers I used when evaluating it.

Results

This undervalued piece of real estate would rent for $1200 according to my property manager. I used a figure of $1150 to be conservative, and it gives us a 6% cash on cash return on investment annually even with a 10% vacancy rate. 6% is not bad, certainly better than index funds at the moment as well as CDs, but that’s just the beginning. If I bought this property I would hold it for 10 years and increase the rent by 2% annually. I also estimated a very conservative 3% annual appreciation rate. With those conservative numbers and the power of leverage, we get an approximately 22% internal rate of return. You would earn an average return of 22% annually. Keep in mind I didn’t take into account selling costs because I estimate that by purchasing a foreclosure, the “built-in” equity will cover those expenses. Now, anyone who knows me know that I love stocks and mutual funds for the sake of diversification, but a 22% ROI kicks mutual fund ass. Even the most successful investors say that we won’t see the spectacular ROI that we’ve seen in the past from stocks. That being said, this property is an example of a pretty good investment and it’s just sitting on the market waiting to be snatched up.

Don’t Limit Yourself

The deals are out there, but you don’t have to limit yourself to certain areas. Don’t be afraid to go beyond a 50 mile radius. You know, Donald Trump doesn’t own real estate in NYC alone. He has great people around him, property managers in our case, making sure his properties are performing well throughout the world. I was born and raised in San Francisco and I’ve lived here all my life but I’ve traveled to upstate New York, Texas, and Vegas to research potential investment properties. When I was 21, I remember driving 8 hours to and from the central valley in California with my friend when we were looking to buy our first investment properties. Now, along with many investors, I’m looking at Texas, which is a great place to look for foreclosed deals. These deals are everywhere. You just have to look and do your homework. With the government pushing to bail out banks and people near foreclosure, they won’t be around for long. The time is now.

Share This

Here is the original:
Make Money Investing In Foreclosed Homes