Loans,College loan,Education,student consolidation

Well,Still searching for a Guide but no clues???Well no worries because i have provide a guide for disparate Parents out there..
Colleges fees are reaching an all time high and you need to address all those aspects perfectly so your kids won't be killing themselves on College.This is the important aspects of life you know and you need what's best for them so no worries.We don't want to wreck our College- bound daughters or Son do we?
well here's what you have to do.
First..
Fill out and submit your FAFSA. Free Application for Student Aid. http://www.fafsa.ed.gov/ Check with your high school guidance office. They may very well have someone there who can help you and your family complete and submit this essential form.
Second..
Contact the financial aid offices at the colleges of your choice. Ask them for a list of available scholarships. You will be applying for he ones that seem to match you. That's a given. In applying for scholarships, you need to consider: a. Your strongest traits. Identify them. Which traits will make you stand out? b. How can you sell yourself? Do any of your traits show initiative or leadership. Your achievements are definitely important , but are there ways to demonstrate your strengths beyond the obvious, so that judges can see the depth of what is YOU. c. Highlight an aspect of "you" and then elaborate, or tell more, about that aspect. This will shed light on who you are.
Third..
Check into large companies offer scholarships or tuition programs for employees and their family members. The personnel or human resources department at your parent's work may have some leads.
Fourth..
Have YOU been employed? The company you have worked for...Chick Filet, Men's Wearhouse, Marriott, etc. may have awards and scholarships for their student workers, for YOU. Maybe you work part-time for the YMCA. They may have scholarships. Don't miss a possibility.
fifth
Contact Your State Department of Higher Education Most states have scholarship programs for residents to attend their in-state colleges and universities.
Sixth
Have a career or major in mind? Contact the professional organizations in that career area: tourism, hospitality, speech and language, law, fitness, etc. Find the particular professional organizations and see if they offer money.
Seventh
Organizations of all sizes and interests sponsor scholarships. Part of your strategy is to uncover everything. The very source you overlook might be the one you could have gotten. Going back to your traits , interests, and your connections. Remember the strategy! Dig deep for community service, fraternal,religious, military, union, and professional. How about your parents? Grandparents?
Eighth
Check with your bank and/or credit union for finance information. Remember that the FAFSA is the keystone of this entire process. It seems overwhelming, but once you get started, you are on your way. Pay attention to deadlines for the FAFSA as well as any other applications needed for loans, grants, and scholarships.
Nine
Use Free Scholarship Search Services-( because, yes,: NEVER pay for scholarship information. You've got it!) Use Free Scholarship Search Services-( because, yes,: NEVER pay for scholarship information. You've got it!) Here are some free scholarship search services: Scholarship Search Fastweb Scholarship Research Network Express Wiredscholar
Tenth
Colleges and Universities, themselves, give out institutional awards within a particular college or major. We are really going back to the start of this article. Just in case you missed it: Contact the financial aid offices at the colleges of your choice. Eligibility for such awards can be based on merit, financial need, intended major, ethnicity, or other factors.

Rich Dad, Poor Dad





WASHINGTON (Reuters) - America may still think of itself as the land of opportunity, but the chances of living a rags-to-riches life are a lot lower than elsewhere in the world, according to a new study published on Wednesday.

The likelihood that a child born into a poor family will make it into the top five percent is just one percent, according to "Understanding Mobility in America," a study by economist Tom Hertz from American University. By contrast, a child born rich had a 22 percent chance of being rich as an adult, he said.

"In other words, the chances of getting rich are about 20 times higher if you are born rich than if you are born in a low-income family," he told an audience at the Center for American Progress, a liberal think-tank sponsoring the work.

He also found the United States had one of the lowest levels of inter-generational mobility in the wealthy world, on a par with Britain but way behind most of Europe.

"Consider a rich and poor family in the United States and a similar pair of families in Denmark, and ask how much of the difference in the parents' incomes would be transmitted, on average, to their grandchildren," Hertz said.

"In the United States this would be 22 percent; in Denmark it would be two percent," he said

I am struck by how much "spin" there is here. The last number on the U.S. economy (22 percent) is consistent with other things I have seen, but one can just as easily put the point in a different light:

How much does income inequality persist from generation to generation? After two generations, 78 percent of the benefit of being born into a wealthy family has dissipated.

I think many people would find this to be a surprisingly small degree of persistence.

(I don't know much about Denmark, other than that it is a society with a lot less inequality than the United States. Here is a conjecture: Persistence of inequality is lower in nations where there is less inequality. I am guessing that it is easier to make it from the bottom to the top of the income distribution when it is a smaller jump.)

One might ask why being born into a high-income family means you will likely have higher income. Is it the good genes that you inherited from your successful parents or the nice neighborhood and expensive private schools that their high income could purchase for you? Is it nature or nurture?

The evidence suggests that nature trumps nurture. In a fascinating paper, Dartmouth economist Bruce Sacerdote asks "What happens when we randomly assign children to families?" He examines a data set in which adopted children were, literally, assigned randomly--a great natural experiment for studying these issues. He reports:

Having a college educated mother increases an adoptee's probability of graduating from college by 7 percentage points, but raises a biological child's probability of graduating from college by 26 percentage points. In contrast, transmission of drinking and smoking behavior from parents to children is as strong for adoptees as for non-adoptees. For height, obesity, and income, transmission coefficients are significantly higher for non-adoptees than for adoptees.

Sacerdote suggests that income is like height. Having a tall father means you are likely to be tall, but it is because he has given you the tall gene, not because he has created an environment that fosters height. The same appears to be true for income. Sacerdote's Table 3 shows that although there is a positive correlation between the incomes of parents and their biological children, the positive correlation disappears when we examine the incomes of parents and their randomly-assigned adopted children.

*A Book Review*
Rich Dad, Poor Dad
By Robert T. Kiyosaki with Sharon L. Lechter, CPA

by Michael C. Gray

July 25, 2007

What is the difference in the world view and attitude of people who become rich compared to other people? What things do they do differently to have such different results in their lives?

Robert T. Kiyosaki had a unique opportunity to find out. Robert's father was an educator and public administrator. When Robert was a young boy, he and his friend, Mike decided they wanted to learn how to become rich. They started by trying to make (counterfeit) money.

Robert's father explained to the boys this was illegal. He also admitted he did not know how to become rich, but suggested the boys ask Mike's father how to go about it. So Mike's father, an independent businessperson, became a mentor to Robert, his "Rich Dad."

This book is the fascinating story of how the Rich Dad taught Robert the lessons he needed to learn to make himself financially independent. Robert has learned that our educational system is pretty good at producing employees, but not very good at producing people who are good at managing their finances wisely. He now teaches people how to apply the principles of becoming rich. In addition to publishing the information in this book, he has developed a game, CASHFLOW(tm) 101 to help people develop their financial intelligence.

Some of the ideas Robert presents reinforce those in other books we have reviewed. Like The Millionaire Next Door, Robert points out the difference between having a big salary and building wealth. Like The Richest Man In Babylon, Robert emphasizes the importance of paying yourself first. In his opinion, it's more important to systematically invest a portion of your income than to pay your bills or to pay your taxes. (A controversial concept.)

Robert also has a definition of an asset versus a liability that is different from conventional accounting. Investors generally focus on accumulating assets and avoid liabilities. Simply stated, assets generate income or cash. Liabilities consume cash. Rich people accumulate assets. People who aren't rich accumulate liabilities. Some things that look like assets are actually liabilities - for example: a residence, a car, a boat. When we accumulate these things, we are not really accumulating wealth, we are consuming it. If we haven't accumulated sufficient assets and we acquire these "toy" liabilities, we are putting the cart before the horse. Instead, we should emphasize regularly acquiring stocks, bonds, tax lien certificates, rental real estate, and other investments. We also need to learn to build value and get some tax shelter by building our own business.

Robert acknowledges that it is possible to use the principle of compound interest and regular saving to achieve financial independence. The problem with this approach is it's a long, patient one. Most people get started too late for it to work.

The rest of us must develop our financial intelligence, make risk our friend, and accelerate our financial growth. Although diversification is appropriate for preserving accumulated wealth, the investor usually must take the additional risk of focused investments in order to initially accumulate wealth. Bigger returns require accepting more risk.

Rich Dad, Poor Dad is the kind of book that opens your mind to new possibilities. Whether to contribute to your child's financial education or your own, you will want to have a copy in your home.
So Hurry up and grad a copy now!

Today, because of the multitude of choices we all have, it is easy to get distracted from where we want to go in life. So just because you decide to choose a path to riches one day, does not mean you will choose it again the next day. The following are some simple basic steps and thought processes I have repeatedly gone through in my life. I say that I have gone through them repeatedly because I have had to make and re-make these decisions over and over again. Everyday we are constantly presented with multiple choices, and I found that I needed to constantly remind myself of my choices, if I were to remain on the path I chose. I offer you a few suggestions on how to find your path and stay on your path to great wealth, if you should choose to do so. But please remember that we all have the ability to change our mind. So to stay on our chosen paths, we often need to chose and re-choose our chosen paths on a regular basis.

One night in 1975, I sat in my little apartment and began to choose the path I was now to take. That night I had to again decide which dad’s path I would follow, my rich dad’s or my poor dad’s. I had been off track for ten years, and it was now time to get back on track. These are some of the thoughts I went through that night, and some of the decisions I made and have continued to make over the years.

10 DECISIONS YOU NEED TO MAKE TO GET RICH

STEP ONE: DECIDE TO BE RICH

That night in 1975, I had to first stop feeling sorry for myself and decide again to be rich. That night I sat and began to go over some of the lessons my rich dad had given me over the years. Lessons that were more important than money, because they were the lessons that would ultimately create for me the financial empire I wanted. That night, I could hear my rich dad talking to me. I sat quietly and my lessons began all over again. They began with him saying, “The only difference between the rich, poor and the middle class was the kind of life style they wanted. He said, “You don’t have to be a psychic to tell a person’s future. If you will listen carefully to the words a person uses, they will tell you their future.”

Over the years, I found rich dad’s words of wisdom to be so true. Rich dad believed that words were a person’s most important tool. He believed that rich people used rich words, and poor people used poor words. He constantly reminded me to watch the words I spoke simply because he believed that the words you spoke and the words you thought ultimately became the world you lived in. He often quoted from the Old Testament, “And the word became flesh.” So that night, I remembered rich dad reminding me to listen to different people’s words and then tell him what I noticed. Over the years, rich dad pointed out to me that poor people often said words such as these:

“I just want enough money to pay the rent.”

“I need a few dollars to get me to the next pay day.”

“After I pay my bills, I don’t know how my family can afford to eat.”

Rich dad pointed out that people who used words such as these are often focused only on financial survival. Rich dad often referred to people such as these as poor people. He called them poor, but not in the sense most people think of when they think of poor people. He called them “poor” because they were poor managers of money. So a person who used words such as these in speech or in thought, were constantly fighting a financial battle of survival, regardless of how much money they made.

The middle class used different words because they had different ideas about how to use their money. Rich dad pointed out that people who’s future was in the middle class often said things such as:

“Our home is our most important asset and is our largest single investment.”

“We’re setting a few dollars aside every month, so we can afford the down payment on our dream home.”

“We’re saving money for our children’s college education and our retirement.”

Rich dad had me notice that the middle class focused on comfort. That is why so many of them say, “I don’t want to be rich. I just want to be comfortable.”

I sat there in the darkness that night, going over my rich dad’s thoughts on what words the rich used. I began to recall the words my rich dad’s rich friends used. They used words that were different. They often were heard to say:

“How did you finance your shopping center? Did you syndicate it with a joint venture partnership or did you go to a hard money lender for the interim money?”

“My underwriter has a new private placement, pre-IPO offering. Do you want a position in it?”

“I bought the shares through my corporation because the long term tax consequences are better.”

Rich dad pointed out that the rich used the vocabulary found in the asset column. He said, “The reason the rich are rich is because they are not focused on day-to-day short term survival, or the expense column as the poor are. Nor are the rich focused on comfort and the acquisition of liabilities using credit, as is the middle class. The rich are rich because they focus on the long term acquisition of assets…assets such as stocks, bonds, businesses, and income producing real estate. Many times the rich will forsake meals, a steady paycheck, a vacation, or the comfort of a nice home, in order to build or acquire real assets.”

So Step One is decide to be rich, even if you are broke and penniless today. In Rich Dad Poor Dad , I wrote of the difference between being poor and being broke. I wrote that poor was a state of mind. It is a state of mind where thoughts such as “I can’t afford it.” or “Live below your means.” come from. I wrote that being poor was eternal and being broke was temporary. The opening chapter of CASHFLOW Quadrant is entitled, “Why Don’t You Get a Job?” The chapter begins with my wife Kim and me being homeless for approximately 3 weeks. The point here is that even though we were homeless and virtually out of money, we continued to strive to become rich. We continued to strive to build a business and invest through that business. Today, even though we now have plenty of money, and several businesses, nothing much has changed. We continue to build businesses, or reinvest in our businesses, and invest through those businesses.

In CASHFLOW Quadrant, I wrote about Be-Do-Have. I wrote that the “Be” was the most important part of the three word formula. I wrote that most people want to “Have” what the rich have, the problem is they often are not willing to do what the rich “Do” to have what the rich “Have.” Again, the three different classes of people behave differently. So regardless if you have money or not, it is important to “Be” rich if you decide to do so, which means being willing to make being rich more important than being comfortable or merely surviving financially.

STEP TWO: DECIDE WHAT KIND OF MONEY PROBLEMS YOU WANT.

There are only two kinds of money problems. One problem is not enough money and the other is too much money. Unfortunately, the only kind of money problem most people know is the problem of not enough money.

Rich dad stressed that his son and I know not only how to make money but to know what to do with the money we made. Rich dad often said, “Most people know how to work for money, but they do not know how to have people and money work for them.” That is why he taught us how to plan on having too much money. He went on to say, “If you want to be rich, you must know what to do with your excess money and make sure your excess money creates more excess money. If you want to be rich, you must know what to do with your excess money before it gets to you. The problem with most people is that when they receive any excess money, they do not know what to do with it…so they spend it foolishly or just park it in the bank.”

So decide what kind of money problems you want.

STEP THREE: WRITE YOUR PLAN AND THEN FOLLOW YOUR PLAN

After choosing between being rich, poor, or middle class, and then choosing to have a problem of too much money or too little money, it is now time to write your plan.

If you have chosen to be rich, even though broke today, and have decided that you would rather have the problem of too much money rather than the problem of too little money, then read on. If you do not plan to be rich or have too much money, then you need not read any further. There are many other books written for people who simply want to get out of financial survival and get into being comfortable with their money. In fact, most money books are really written for people who want to hang on to their money and be comfortable, rather than become rich.

Rich Dad’s plan started with a few basic goals:

1. Change the characteristic of your income. Start a part-time business.

2. Change the characteristic of your expenses. Convert personal expenses into business expenses.

3. Place your business inside a legal entity.

4. Have your business buy your assets.

5. Harness the power of re-investing.

If you’re willing to be a little uncomfortable, become very rich, and retire early, develop your plan. Maybe rich dad’s plan can apply to you, even though you may be broke, but not poor, today. And if you are already rich, then rich dad’s plan may help you become richer and happier…even beyond your wildest dreams.

STEP FOUR: DECIDE ON WHERE YOU WANT TO DO YOUR BANKING

Rich dad often said that you could tell the difference between the rich, poor, and middle class simply by where they went to get their money or where they did their banking.

WHERE THE POOR DO THEIR BANKING

Rich dad said, the poor use pawn shops as their bank. He often said, “A pawn shop is a poor man’s bank.” A pawn shop will lend money on “assets” that a banker would not loan money on. That is why, when a poor person is short of cash, they will often go to the pawn shop and put their chain saw, microwave oven, jewelry, TV sets, tools, watches, up as collateral or security. The pawn shop owner then gives them pennies on the dollar, which a pawn shop owner should do, since what the poor spend their money on is not worth anything after they buy it anyway. The way the pawn shop owner makes their money is by charging legal usurious interest rates.

WHERE THE MIDDLE CLASS DO THEIR BANKING

The middle class on the other hand, has the creditworthiness to use banks, savings and loans, or credit unions for their lines of credit. A popular form of credit for this group is the credit card, which is easy to obtain. The interest rates on credit cards range from 9% to 36%, depending upon the state you borrow from. That is because, it is up to each state to determine it’s own interest rates on credit. An interesting note, the state with the lowest interest rate is Arkansas, at 9%…and because the rate is so slow, they also have the toughest qualification standards, and they also have the lowest charge-offs from non-payment. The lesson being, the higher the interest rate, the easier it is to borrow money.

WHERE THE RICH DO THIER BANKING

The rich also use banks. But they often use different banks. They often use the services of investment bankers, or find private capital from wealthy individuals, or money from institutions such as pension funds, insurance companies, or the stock market. The rich, if successful as business people, have fewer problems raising large sums of money and at better interest rates.

So look at your various choices and decide where you will do your banking.

STEP FIVE: CHOOSE YOUR FRIENDS AND PARTNERS WISELY

One of the reasons the rich get richer is because they spend time with other rich people. Most of my best investments come from my rich friends, not from my stock brokers or real estate brokers. So that is why step 5 is to choose your friends wisely. It is important to know if a person’s aspirations are to be rich, comfortable, or simply survive. People and friends who merely want to be comfortable or survive will not understand why you want to be rich, and may unconsciously pull you down, rather than push you up. And besides, the investment tips I get from people who only want to be comfortable are often tips on investments that no one else wants.

How do you find people who are rich or want to be rich? Rich dad had a simple answer to this question. He often said, “It’s what you know that determines who you know. If you want to change who you know, simply change what you know.” That is why the most important investment you can make is the investment in your financial education and financial experience. Invest in that first and the people you spend time with will change.

STEP SIX: GIVE YOURSELF TIME

It takes time to build a business as well as an investment portfolio. Building a business is not the same as getting a job. With a job, you expect to be paid soon after starting to work. With a business, you may not be paid for years, if you are paid at all. That is why I recommend keeping your daytime job and starting a part-time business.

It is said that 90% of all businesses fail in the first 5 years. In my opinion, there are two main reasons for this sad statistic. One reason is lack of education and experience. Business is not something you can learn in school. Business is a combination of formal education, experience, and guts.

The second reason is the lack of money. We have heard the old cliche “Killing the goose that lays the golden egg.” Well, when starting a business, many people kill the baby-goose before it’s old enough to lay the golden egg. In other words, most small businesses are under-capitalized, which means the new business owner tries to support his or her self and often his or her family on a business that is not yet up and running. So the business is drained of cash when it needs it most to grow in order to keep the owner and the family alive.

STEP SEVEN: START SMALL…DREAM BIG

In 1975, I realized that my $700 in savings was not much when compared to Mike’s hundreds of millions of dollars, which was rapidly growing into a billion dollars. Initially, I felt like giving up, saying to myself, “What’s the use. I’ll never have more than Mike.”

But then I also realized that if I continued with that thought process, not only would I never have more than Mike, I would never have much of anything. I then realized that I was comparing myself with Mike and trying to compete with him, rather than use him as inspiration and as a mentor. So that night I decided to start small and dream big.

Many people start small and stay small, simply because they have small dreams. It is my opinion that big dreams are important, because dreams possess ingredients vital for success. And some of those ingredients are hope, desire, passion, energy, vitality, faith, drive, inspiration, and creativity. These are the ingredients that make life worth living.

So dare to dream big. Dream of all the wonderful things this world and life has to offer and write your plan on how you can have all your dreams come true. Write that plan and look at it everyday. Talk to people about your dreams, even those who criticize you and your dreams. Then take their criticism and use it to make your desire to achieve your dreams even stronger.

STEP EIGHT: BEFORE YOU EXPAND YOU MUST CONTRACT

In 1975, I knew that if I was to achieve great wealth quickly, I first needed to tighten up before I could expand. As I silently sat in the darkness, I knew that if I wanted to expand financially, I first needed to tighten up. It occurred to me that the reason I was hurting financially was because I had been sloppy with my money during the past ten years. While in college, I spent a lot of money just having fun. While in Vietnam, I had developed the attitude of live life to the fullest because tomorrow I could be dead. So my motto truly was “Eat, drink, and be merry, because tomorrow somebody was really going to try and kill me.” If I was going to get ahead, I first needed to pull back a little. Instead of playing golf, rugby, and tennis, I focused only on rugby. Instead of spending every night of the week in the clubs or watching television, I needed to get back to studying again. In other words, instead of trying to be everywhere and do everything, I decided to begin to focus more. I began doing more–of fewer things.

So step 8 is, regardless of what you did yesterday, if you want to do better financially tomorrow, you may need to forgive your past, tighten up and clean up your activities today, so you can have a bright and prosperous tomorrow. Always remember that to expand, you must first contract.

STEP NINE: GET BIGGER FASTER

The problem with a small business or small investments such as one single family rental, is that if they are small then you have to do all the work. You do all the work because there is not enough money to support paid management. So you own it and manage it. Very often, a person begins to buy real estate and soon quits because the work is hard and the pay is low. They quit because they started with a small plan and stayed small. For business or investing to work for you, in most cases, you must get big. Instead of buying only two rental properties, it is best to plan on acquiring at least 20 properties, and get them as soon as possible. (But make sure you know what you’re doing before you acquire them.) With twenty properties you can afford professional management, if the cash flow is strong, or you can trade the twenty units into one larger apartment house or office building. The same goes with businesses, especially businesses such as franchises. If you have only one franchise, you are the chief cook, bottle washer, owner, and manager. If you have twenty of them, you have a chance of finding freedom faster.

The people who work the hardest and are paid the least are people who dream small, think small, and work small. So that night, I vowed that I would focus, study hard to acquire education, gain experience, start small, and get big as quickly as possible. I always remind myself of my rich dad’s words, “The bigger the asset you build, the less you work and the more money you make.”

STEP 10: THE MORE I SHARE THE RICHER I BECOME

That night in 1975, I knew that if I wanted to acquire great wealth quickly, I had to be a person who shared. I had to be a person who was generous. I knew that if I was greedy, stingy, or tight, it would take me longer to attain great wealth.

That is why in 1975, I decided to operate out of the B (Business Owner) quadrant, rather than follow my poor dad’s ideas on labor unions and protectionism. I decided that if I was to get rich quickly, I needed to focus on doing more for less money, for more people. I needed to focus on sharing as much of my wealth with as many people as possible. That is the fastest way to get rich quickly. You get rich by sharing rather than by being greedy.

So step 10 is to decide to be generous and share with as many people as possible. If you do that, you will become far richer than those who work only for themselves.

The Big Idea For YOU DADS GUYS

FINANCIAL LITERACY = FINANCIAL INDEPENDENCE
A true tale of two dads one a highly educated professor, the other, an eighth grade dropout. Educated dad left his family with nothing, except maybe some unpaid bills. The dropout later became one of Hawaii's richest men and left his son an empire. One dad would say, I can't afford it while the other, asked, "How can I afford it?"
Rich dad teaches two boys priceless lessons on money, by making them learn through experience. The most important lesson of all is How to Use Your Mind and Time to create personal wealth. Free yourself from the proverbial "rat race". Learn to spot opportunities, create solutions and mind your own business. Learn to make money work for you, and not be its slave.


Rich Dad's Words of Wisdom:

*

You are what you Think.
*

A job is a short-term solution to a long-term problem.
*

A highly paid slave is still a slave.
*

Why climb the corporate ladder when you can own the ladder?

Good Thinking:
Two roads diverged in a wood, and I
I took the one less traveled by,
And that has made all the difference.
Robert Frost, from "The Road Not Taken"
Overview
There is a Need.
The rationale for teaching people financial literacy comes from the fact there is no real job security these days. Even after years of toil, the poor and middle class may find they do not have sufficient funds for their children's college education, or their own retirement. Why work for a corporation, the government, and the bank all your life? Awaken your financial genius and gain financial independence and freedom!


Lesson 1: The Rich Don't Work For Money
At age 9, Robert Kiyosaki and his best friend Mike asked Mike's father (Rich Dad) to teach them how to make money. After 3 weeks of dusting cans in one of Rich Dad's convenience stores at 10 cents a week, Kiyosaki was ready to quit. Rich Dad pointed out this is exactly what his employees sounded like. Some people quit a job because it doesn't pay well. Others see it as an opportunity to learn something new.
WORK TO LEARN
Next Rich Dad put the two boys to work, this time for nothing. Doing this forced them to think up a source of income, a business scheme. The opportunity came to them upon noticing discarded comic books in the store. The first business plan was hatched. The boys opened a comic book library and employed Mike's sister at 1$ a week to mind it. Soon they were earning $9.50 a week without having to physically run the library, while kids read as much comics as they could in two
hours after school for only a few cents.


Lesson 2: Why Teach Financial Literacy?
They don't teach this at school.
The growing gap between rich and poor is rooted in the antiquated educational system. The system trains people to be good employees, and not employers. The obsolete school system also fails to provide young people with basic financial skills rich people use to grow their wealth.
Know your options and use this knowledge to build a formidable asset column. In an age of instant millionaires it really isn't about how much money you make, it's about how much you keep, and how many generations you can keep it.

Steps to get out of the proverbial rat race:
1. First, understand the difference between an asset and a liability.

Assets


Liabilities

Real Estate


Mortgages

Stocks


Consumer Loans

Bonds


Credit Cards

Notes


Intellectual Property


The poor have day-to-day expenses, the middle class purchase liabilities that they think are assets (i.e., a home or a car), and the rich build a solid base of income-generating assets.
The middle class finds itself in a constant state of financial struggle. Their primary income is wages, as wages increase, so do their taxes. Expenses increase as wages increase. Hence the phrase "the rat race". They treat their home as their primary asset instead of investing in income generating assets.

The rich get richer because they keep acquiring more assets and investments to generate more income, which far exceeds their expenses.

Reasons why the home is not an asset but a liability:
1. People work almost all their lives to pay off a home mortgage (30-year loans)
2. Maintenance and utilities expenses.
3. Property tax
4. House values can depreciate.
5. Instead of investing in income-earning assets, your money goes out to
payments for the house.

Your losses:
1. Time that could have been used to grow value in other assets.
2. Capital which could have been invested rather than paying home-related
expenses
3. Education that makes you a Sophisticated investor
If you want to buy a house, first generate the cash flow by acquiring
assets, which bring income to pay for it.
Examples of real assets are:

*

Apartments for rent
*

Real estate
*

Businesses that do not require your physical presence. You hire managers.

Average time of holding on to an asset before selling it for a higher value:
1 year

*

Stocks (Startups and small companies are good investments)
*

Bonds
*

Mutual funds

7 years

*

Real estate
*

Notes (IOUs)
*

Royalties on intellectual property
*

Valuables that produce income or appreciate

In summary, the key steps to getting out of the rat race are the ff:

1.

Understand the difference between an asset and a liability.
2.

Concentrate your efforts on buying income-earning assets.
3.

Focus on keeping liabilities and expenses at a minimum.
4.

Mind your own business.

Lesson 3: Mind Your Own Business
KEEP YOUR DAY JOB BUT START MINDING YOUR OWN BUSINESS.
Kiyosaki sold photocopiers on commission at Xerox. With his earnings he purchased real estate. In 3 years' time his real estate income was far greater than his earnings at Xerox. He then left the company to mind his own business full time. He knew that in order to get out of the rat race fast, he needed to work harder, sell more copiers and mind his own business.
Don't spend all your wages. Build a good portfolio of assets and you can spend later when these assets bring you greater income.


Lesson 4: The History of Taxes and the Power of Corporations
Income tax has been levied on citizens in England since 1874. In the United States it was introduced in 1913. Since then what was initially a plan to tax only the rich eventually "trickled down" to the middle class and the poor. The rich have a secret weapon to shelter themselves from heavy taxation. It's called the Corporation. It isn't a building with the company name and
logo in brass signage out front. A corporation is simply a legal document in your attorney's file cabinet duly registered under a government state agency. Corporations offer great tax advantages and protection from lawsuits. It's the legal way to protect your wealth, and the rich have been using it for generations. Do your own research and find out what tax laws will bring you the best advantages.
The Golden Rule: PAY YOURSELF FIRST.
Rich dad says paying yourself first forces you to create more sources of
income to cover your expenses. It's a simple rule that works like this:


The Rich with Corporations


People who work for corporations:

Earn


Earn

Spend


Pay Taxes

Pay Taxes


Spend

Key Financial IQ Components:
It helps to take some courses to gain financial literacy; rich dad stresses
the importance of learning :

1.

Accounting. It pays to know how to read financial statements. When
acquiring businesses or assets you need to quickly see the financial
standing of the company you are acquiring. Many grown adults do not
know how to balance a balance sheet. In the long term, this knowledge
will pay off for you and your business.
2.

Investment Strategy. This skill will sharpen with experience. Talk to
investors and observe how they play the game. Kiyosaki and Mike
spent many boyhood hours sitting in on Rich Dad's meetings with
brokers, accountants, and attorneys.
3.

Market Behavior. Know the laws of Supply and Demand. No business
owner can do without understanding these basic principles of the
market. Bill Gates saw what people needed. Open your eyes to
opportunities. Look at what sells and who buys.
4.

Law Kiyosaki recommends doing everything you can to grow your
business within legal boundaries. Know your corporate, state, and
accounting laws.

Lesson 5: The Rich Invent Money
Self-confidence coupled with high financial IQ can certainly earn more for you than merely saving a little bit every month.
Make good use of your time and find the best deals.
An example: In the early 90's the Phoenix economy was bad. Homes once valued at $100,000 sold for $75,000. Kiyosaki shopped at bankruptcy courts and bought the same houses at only $20,000. He resold these properties for $60,000 making a cool $40,000 profit. After six more transactions of the same manner he made a total $190,000 in profit and it only took 30 hours of work time. Rich Dad explains there are Two Types of Investors:

1.

Buyers of Packaged Investments.
This is when you call a retail outlet, real estate company, stockbroker
or financial planner and put your money in ready-made investments.
It's a simple, clean way of investing.
2.

The Professional Investor
Design your own investment. Assemble a deal and put together
different components of an opportunity. Rich dad encourages this type.
You need to develop three main skills to be this type of investor,
namely how to:
*

Identify an opportunity everyone else has missed.
*

Raise capital
*

Organize smart people

Identify an opportunity everyone else has missed.
Learn to identify hidden Freebies in business deals. For example: The real business of McDonald's isn't hamburgers. It's the free real estate underneath each franchise, on every important intersection, in cities all over the world that is the real wealth of its owners.
THERE IS ALWAYS RISK. You need to learn how to manage risk and not avoid it.

Lesson 6: Work to Learn Don't Work for Money
The Author's Odyssey
After college graduation Robert Kiyosaki joined the Marine Corps. He learned to fly for the love of it. He also learned to lead troops, an important part of management training. His next move was to join Xerox where he learned to overcome his fear of rejection. The thought of knocking on doors and selling copiers terrified him. Soon he was among the top 5 salespeople at the company. For a couple of years he was No.1. Having achieved his objective " overcoming his shyness and fear" he quit and began minding his own business. Learn skills like PR, marketing, and advertising. Take a second job if it means learning more.

A Difference in Education
Schools train professionals. Professionals become so specialized they cannot apply themselves in other fields and need to form unions to protect their jobs. Remember you can have a profession, say, learn to be a pilot if you want to learn how to fly, but at the same time mind your own business. The rich "groom" the next generation by training the heir in all aspects of running the business. They move him from department to department so he learns how
each one relates to the other. Specialization is not the key here, but picking up important lessons from each area and seeing the business as a whole.

Rich Dad groomed Kiyosaki and Mike in the same manner. Mike would later take over Rich Dad's empire, which included restaurants, convenience stores, and a construction company. Kiyosaki created his own empire with real estate, new products and educational materials.


Five Obstacles to Financial Independence

1.

Fear. Don't play it safe and cling to what you think is secure. If you don't
go for it and think big you won't be able to earn big.
2.

Cynicism. Don't listen to advice of others who are not doing what you intend
to do. Listen to your self and those who are doing what you aim to do.
3.

Laziness. Greed is good and fights laziness. Think about the freedom and
money you'll have and you will put in those extra work hours. Change your thinking.
Instead of saying "I can't afford it". Ask yourself "How can I afford it?"
Challenge your mind to create solutions.
4.

Bad Habits. Spending habits should turn into saving and investing habits.
5.

Arrogance. Don't think you know everything there is to know about money.
Listen to others. Enroll in useful seminars.

Ten Steps to Awaken Your Financial Genius:

1.

Find a reason greater than reality, a big dream. Think of the freedom,
the lifestyle wherein you control your own time. Think of what you don't
want, i.e. I don't like being an employee.
2.

Use the power of choice, daily. You can choose to watch MTV, or watch
CNBC. It's how you choose to use your time and energy everyday that
brings financial success in the long run.
3.

Choose your friends carefully. It pays to have friends who are focused
and achieving their goals. Surround yourself with friends you can learn
from.
4.

Master a formula. Learn a new one, and learn fast.
5.

Pay yourself first. Practice self-discipline by keeping expenses low.
Tenants can pay for your expenses if you rent out apartments or mini storage,
for instance. Savings are used for investing and creating more
money, not for paying bills.
6.

Pay your broker well. Attorneys, accountants, stockbrokers, and real
estate brokers will have more incentive to work harder for you. If they
make more money, it means you make more money as well. 3-7% is a
good incentive.
7.

Be an Indian giver. It's the concept behind ROI. (Return on investment)
Invest and then take the initial money out after a time when the investment
has earned for you.
8.

Buy luxuries last. Let the income from your growing assets afford you the
new car. Wait for your asset base to grow first. Middle class people buy
luxuries first, on credit.
9.

Find yourself a hero. When you play golf you can imagine you are Tiger
Woods. When you do business, you can ask yourself, "What would
George Soros have done if he was in my place right now?"
10.

Teach and you shall receive. As in money, love, or friendship. If you give
without expecting anything in return, you receive more.

To-Do List

1.

Stop what you're doing. Take a step back to assess your situation. Stop doing what is not working and look for a new option.
2.

Look for new ideas.
3.

Take action. Find someone who has done what you want to do. Take them to lunch. Ask for tips.
4.

Take classes and buy tapes.
5.

Make lots of offers. Finding a good business deal is a lot like dating. You must go to the market and talk to a lot of people, make offers, counteroffers, negotiate, accept and reject. Many single people sit at home waiting for the phone to ring instead of going out and hitting the dating scene.
6.

Take a walk through your neighborhood and look for bargain real estate deals.
7.

Buy the pie and cut it into pieces. People buy only what they can afford so they think small. Think big. This goes for land and other investments.
8.

Learn from history. Colonel Sanders lost everything in his 60's and started from scratch with a fried chicken recipe. Bill Gates became rich before he was 30.

ACTION ALWAYS BEATS INACTION.
"IF YOU'RE DOING SOMETHING YOU CARE DEEPLY ABOUT AND IF YOU BELIEVE IN IT, IT'S IMPOSSIBLE TO IMAGINE NOT TRYING TO MAKE IT GREAT."