Financial Literacy

Top 3 Influential Books Written By Robert Kiyosaki

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It is often in our daily lives that we come across books that share such wonderful insight into not only the world we live in but also ways in which we could better and improve our lives. Robert Kiyosaki founder of the Cashflow Board Game and Best-Selling author of the book Rich Dad Poor Dad, has written many books throughout his career in an effort to spread financial education to the masses. Here are some books below that we have read and are recommending to our fellow viewers who too would like a change and leave the rat race.

Rich Dad Poor Dad

RICH DAD POOR DAD

One of Robert Kiyosaki’s best-selling books, and featured on OPRAH. This book is highly recommended for people who have not been exposed to the idea of financial freedom or who are not aware of the possibilities of leaving the rat race. RICH DAD POOR DAD shares simple financial concepts to the public through Robert Kiyosaki’s upbringing where he learned two very different forms of education from two great figures in his life. The whole book revolves around the hot seated topic of Conventional Education Vs. Financial Education and one of Robert Kiyosaki’s pet peeves of why, Financial education is not taught in schools. This book will teach you the importance of acquiring assets over a paycheck, share insights on the current economical system in place and how the rich get richer.

 

 

 

why we want you to be rich

WHY WE WANT YOU TO BE RICH

A Collaboration between a Billionaire and a Millionaire. This book was the by-product of both Donald Trump and Robert Kiyosaki. In an effort to promote financial literacy to the masses, the main theme of this book is why it is in fact a civic duty of every citizen in the world to be rich. The book explains how the middle class in the United States as well as around the world Is in face shrinking and that while the middle income class continues to shrink, the lower and higher income classes continue to rise. Both man identified this worrying trend to the world in a bid to improve the financial situation around the world. Both man shared on how the ageing population is affecting the global economy, the “entitlement mentality” that a lot of people have today as well as both mans opinions on financial success. Written in classic interview style, this book is not only easy to read but also well written and can be easily understood.

second chance

SECOND CHANCE

One of Robert Kiyosaki’s latest books, written as a homage to the late Buckminster Fuller (Bucky), Robert shares in this book Bucky’s view of the world economy and how, the current banking system today is not designed to help the poor but rather a by-product of corporate greed. Robert Kiyosaki having identified successfully along with other teams of experts the crisis in 2007, here Robert once again identifies an upcoming crisis that will be happening somewhere within 2016. (Refer to current economic outlook). Robert shares summaries of historic crashes, causes and how history is likely to repeat itself but this time, on an earth-shattering basis. Robert here also shares on how that in every crisis, there are always more than two sides to any given scenario. A side for benefit, a side for loss and another side where people can choose to evaluate both options and determine the better route to chose and follow.

Jonathan Ho
Cashflow Game Club Singapore

What is Financial Freedom?

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Financial Freedom

What is Financial Freedom??

Some of you may be thinking, well, what is financial freedom?

Financial Freedom is generally the ability to do whatever you love, whenever you like and wherever you want, without worrying about financial constraints. When your assets generate income more than your expense, you would enjoy the greatest sense of success that you can imagine. Some may prefer to travel and see the world, or enjoying life everyday with love ones or fulfill every single dream.

Firstly, let’s define your definition and path to Financial Freedom.

What do you want to achieve in life? Will you do whatever it takes to achieve your goals? Once you understand your roots, it’s much easier to understand where you want to go and how you will achieve it.

No matter your financial past, today is a new day. You can start fresh or you can optimize the path you’ve already set out on.

Therefore, understand what you want in life and educating yourself about The Importance of Financial Freedom, as well as the means to achieve it is very essential.

In order to achieve Financial Freedom, you must:

  • Change your Habits – Learn how to quickly and easily change your behavior for better financial results.
  • Control Your Money – Follow a step-by-step plan for directing your money toward your real priorities.
  • Create Freedom – Discover personal goals that practically guarantee your financial success.

Financial Freedom

Robert Kiyosaki, author of International Best Seller Book “Rich Dad Poor Dad”, details ways to achieve financial freedom in his book.

  • Increase your income,
  • Decrease your expenses,
  • Buy more stuff that makes you money (assets)
  • Buy less stuff that costs you money (liabilities).

Start to plan your path and learn from someone who is already there.  There’s no goal you can’t achieve, if you set a plan to achieve it and maintain a laser focus on getting there.

Angie Ng

Cashflow Game Club Singapore

 

A Small Deal in Real Life – Preference Shares

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Dear Cashflow Players,

Still remember in thepreference-shares game there is a small deal card call “2 Big Power” or “DIV2U”? There was once I got $23,500 passive income per month in my Cashflow Game because of those deals as I have about $1.1 million in cash. The question now is that is there such deals in real life?

For example, DBS is issuing out $500m preference shares for retail investors that will pay 4.7% a year for 10 years . This definitely beats fixed deposits rates but it is not risk-free and comes with potential pitfalls. The major pitfall is that the price is never fixed and will fluctuate according to prevalent interest rates and market conditions. Baring any financial disasters, they are general quite safe.

Hence, if one person have about $1.1 million in cash to buy the preference shares, he or she will get roughly about $51K per year which works to about $4,300 per month of passive income. The question now is do you have any other streams of passive income to protect this paper asset (Remember Money Velocity)? 

Max Tay
Passive Income Guru

P.S.: You can read more about other ways to create Passive Income – 9 Ultimate ways to create Passive Income in my blog.

 

4 Important Principles of Financial Literacy

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Financial-Literacy

The most frequently financial advice that is being told is to work hard, save money, get out of debt, live below your means, and invest in a well-diversified portfolio of mutual funds. Do our school prepare us to be financially literate ? Our schools do well at teaching reading, writing and arithmetic, but they are horrible at preparing people to work with money. Nearly every person who graduates from school is financially illiterate. Basically, Financial literacy is the ability to understand how money works in the world.

Every rich people who are financially free have high level of financial literacy. The good news for you is you don’t need to be super talented to be financially free. To be financially literacy It will take hard work, a lot of study, and trial and error, but the return will be worth it. The key to becoming financially literate is to understand the four foundational principles of financial literacy.

#1 – The Difference Between an Asset and a Liability

Many people misunderstood the definition of an asset. For example, you probably think your house is an asset, but it’s not. The truth is that just as there are two definitions of an asset.

Accountants use definition of asset as economic of resourse that requires lots of financial knowledge to make people and companies feel richer than they really are whether the asset have cash flow value. 

The rich use the definition of asset grounded in simplicity and reality. An asset is anything that puts money in your pocket and a liability is anything that takes money out of your pocket.

Your house is not an asset because it takes money out of your pocket each month. Even if you own your house outright, you still have to pay for the taxes, maintenance and more out of your own pocket.

But if you own a rental property, that can be an asset, because it puts money in your pocket each month in the form of cash flow. When your tenant pays rent, they cover your mortgage, maintenance, taxes, and more.

#2 – Using debt and taxes to get richer

Your financial adviser or accountant will tell you that debt is bad and taxes are inevitable. People who are financial literate will understand that both debt and taxes can be used to create immense wealth. There are two kinds debt, bad and good. When your financial adviser tells you to stay out of debt, she means stay out of bad debt. That is good advise but they never tell you what is good debt. 

Bad debt comes in the form of borrowing money for liabilities such as using credit cards to buy smart phone or luxury items, which cause your money flowing out of your pocket to pay debt.

What is good debt? Good debt is debt used to purchase assets like rental property. For example, When you use the bank’s money to purchase real estate, you will use less of your own money to pay down payment to secure an asset instead of full price, and your tenant’s rent pays off your debt while you own the asset and pocket the profit for cash flow.

People with high financial literacy understand when it come to taxes that governments give exempted tax codes to encourage specific types of investment. If governments want you to build affordable housing, they give you a tax cut. If they want to encourage oil exploration, they give you a tax cut. If they want to see higher employment, they give you a tax cut. The secret is that most tax benefits are made to help entrepreneurs and investors. With the right financial education, you too can utilise the tax code to not only get richer, but also pay nothing in taxes.

#3 – Cash Flow Versus Capital Gains

Most people invest for capital gains but the rich invest for cash flow. Investing for capital gains is like gambling, you invest your money and hope the price goes up. For instance, many people buy a house hoping they’ll be able to sell it for more money later. In the meantime, they have to pay their mortgage and home expenses. Money goes out of their pocket. It becomes a liability.

The rich invest for cash flow, that it’s money flowing into your pocket on a continual basis whether you’re working or not. It is your money working for you. And generally, cash-flow investing is based on fundamentals that aren’t as susceptible to market swings like capital-gains investments, which means that even in bad times, money still flows into your pockets.

Additionally, cash flow is what is known as passive income, which is the lowest taxed type of income. This is not always the case with capital gains taxes, which vary depending on the type of asset you’ve invested in and how long you’ve owned that asset. In some cases, the taxes can be very high. Different investments produce different results. The question is, what results do you want?

#4 – Making your own financial decisions

If you are not financially literate and confident about your knowledge about money, you let others make your financial decisions for you.

You let your financial advisor to decide how and where your money should be invested. They will advise you based on which investment pay them the higher commission. You let your bank to tell you what interest rate is your money worth and you follow whatever investment trend is popular in the news without financial education.

The rich don’t follow the crowds. They set the trends and are gone by the time the trends become popular in the mainstream. What’s their secret? They think for themselves about money and make their own financial decisions because they have a high financial intelligence.

Having great knowledge to act on and great wisdom to know which course of action is the best is the key in building great wealth. By applying yourself to financial education only you can gain this kind of knowledge and wisdom to a high financial intelligence.

The question for you is, are you ready to increase your confidence about money by increasing your financial education? Are you ready to start making your own financial decisions?

Cashflow Game Club Singapore