Robert Kiyosaki on Investing

Insights on Robert Kiyosaki’s Guide to Investing – Conclusion

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I have a lot of posts about this book. I am sorry if you are bothered or pissed off every time you see the same posts. This is something I have come up with in educating fellow bloggers and writers about the value of financial literacy. I may be a boring writer and I may have not given justice in giving out what is in store for those who are to read the book. It was my first time to give reviews, insights and reactions to a book on a written form. Normally, whenever I finish a book, I would be in awe, amazed, stunned, paralyzed and left on the book itself. The same feelings have been my reactions to this book so nothing is new actually except the learning and the burning desire to pursue entrepreneurship.

The conclusion part of the book discussed “why it no longer takes money to make money”. It discussed the transition from the agrarian age, industrial age and eventually to the information age. As the economy changes, more and more doors are opening for everyone to become rich and for now, in the information age, it was made easier. During the agrarian age in order for someone to get rich, he has to be born a royalty or get married to a royal blooded maid. It has changed though during the industrial age, as long as you have the facilities like a building, machinery and equipment that could produce a necessity, you would be rich. As long as you have the determination to realize your dreams and make it a reality, the door to become rich will be open for you. The best thing happened in the information age. Because of the internet, the opportunities have greatly increased. You do not need anymore the building and properties to start your business. All it takes is an idea that would work.

It no longer takes money to make money. An idea is sufficient enough to make money. As long as you had the idea, you can take the world by storm. I hope you enjoyed every chapter and learned something. This is the last post about this book but certainly not the last time that I will read it. It has been really a good read and I recommend that you read it too. There are now a few books I would want to read and I hope time would permit. Do you have some good books to refer for me to give two months or so to digest? Feel free to tell it on the comments and I hope it does not contain a lot of chapters. Thank you all and have a safe and blessed new year ahead of you!

NOTE: IF YOU MISSED THE EARLIER CHAPTERS HERE ARE THE LINKS:

Insights on Robert Kiyosaki’s Guide to Investing – Chapter 42

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And we are now down to the last chapter of the book and the last phase. The title of the phase is “Giving it Back” and the Chapter would answer the question “Are you prepared to give back?”.

This is the best phase of all as this gives fulfillment to an entrepreneur. What is the sense of having a lot of money and property if all you see are poor people struggling to live on their own? Though there are a lot of rich people that are capable of helping, they can only do that much, but still, I salute those generous bright people who have built charitable institutions for the sake of those badly in need.

At first, I never expected that this book would showcase such a chapter that would enlighten me on how to use properly the wealth to be gained through the years. Not everyone is blessed to have the financial literacy that a few have been able learn, thus the author has came up with the idea to give back to the society. He entrusted every financial literate person to give back to those in need, because that would really fulfill the spirits and soul of the giver for sure.

In this world where poverty has been a consistent problem, the author would want to instill to every successful entrepreneur to give back to the society, the persons that became your customers or consumers, because if not for them, you would not be successful. If we are not to consider them on our plans, will they be able to survive on their own?

Giving back doesn’t mean to give it all back, but rather, think and build a consistent program that would have a continuous inflow of money from the business as well as the continuous inflow of money to the charitable organizations to help those in need. Ensuring the future of others would fulfill every bone of the body because you have somehow helped a lot of people that the Government wasn’t able to help before.

Businessmen were given the knowledge about money, everyone can learn it but not everyone lives through it. Once you have learned how to live through it, you have now the power to make a choice. It’s either to be greedy and continuously make money for yourself or be generous while continuously earning money for the community. The latter sounds better and it’s the path to a peaceful life. They may call you greedy or selfish for now but they do not know your future plans for them are. I suggest to every follower that you also do the same once you became successful, because the fulfillment of the soul is the most fulfilling filling ever in life. So, never forget to give back.

NOTE: IF YOU MISSED THE EARLIER CHAPTERS HERE ARE THE LINKS:

Insights on Robert Kiyosaki’s Guide to Investing – Chapter 41

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And now to end the Phase 4 of the book, we’ll now go on this Chapter that answers the question “Why do rich people go bankrupt?”. This has been a familiar sight to every person who have attain such successful milestones in their life ~ to declare bankruptcy. Most businessmen went through bankruptcy before they know it. The common downfalls was that they get into gambling, drug or liquor addiction or even depression but the most common of it was that they have poor financial literacy skills.

A lot of notable people who have attained great success over the years have declared bankruptcy like Allen Iverson, 50 Cent, Mike Tyson and Cyndi Lauper. There were a huge list of entrepreneurs who have also declared bankruptcy like Donald Trump, Walt Disney and Henry Ford. Actually, according to rich dad, the average entrepreneur went bankrupt three times before learning how to maintain the wealth gained from the business.

The good thing though is that with this book, I have learned a pretty good thing like identifying which are the good expenses against bad expenses as well as the good debts against bad debts. Though expenses and debts do have a negative connotation when it comes to business, there were some of them that might save us from any bankruptcy issues. If we have attain such riches we often think of a lot of things to splurge the money and never realize that we splurge ourselves into bad expenses like a yacht, fast car or a mansion. Whereas if we use such money to acquire a bigger building for the business, a warehouse or a new machinery that would help in the production, it would boost the wealth.

There also comes some good debts in availing of mutual funds, insurance or investment portfolios to secure the retirement funds for the employees or to be used in future expansion. The problem with the common entrepreneur was that they do not think that way. All they want was to have enormous profits and minimal expenses without thinking on where to put that amount of money that they have generated.

Solving the problem of having less money is good but being able to solve also the problem of having too much money is way better. There is no sense in solving that B-I triangle formula or in gaining the wealth you have dreamed of if you do not know where to put the earnings over the years. Every entrepreneur must learn on how to create and build more assets as they grow their businesses because it is the only way to maintain and continue further on the road to riches.

NOTE: IF YOU MISSED THE EARLIER CHAPTERS HERE ARE THE LINKS:

Insights on Robert Kiyosaki’s Guide to Investing – Chapter 40

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Good day everyone! I missed writing! As in badly, but my body does not cooperate. Every time I would start to write, colds is winning over me so I had to take a few days off and now I am procrastinating in finishing giving these insights. What a terrible person am I for not taking good care of myself? My bad, but since I am feeling better compared to a few days before, let me continue on this one as I have a few new ideas to write on besides on this one.

Going to Chapter 40 with the title “Are you the next Billionaire?”, it was another long read. I wonder now why the author is giving long reads after having a few chapters with short reads. I think it is because he thinks that If we reached that far in reading the book, more or less, we get to communicate with him and had the same mindset. Thus, he is now asking if we are the next billionaire. Are we? Only us ourselves can answer such a question.

Being a millionaire is a long way to go, much more for being a billionaire. Only a few people get the chance to become billionaires but it has been possible for everyone of us. If you have read my insights or the books itself you would have learned a few new things that might really help you in determining the path to riches. It is now up to you on which path to take.

Reaching the billionaire landmark is really fulfilling to anyone but it is not impossible at all. All we need is to emulate the methods that work and that is through becoming an Ultimate Investor. Why? Because once people have seen your growth  ~ through consistent gain of knowledge, experience and riches ~ they would trust you with their hard earned or excess money to put into the business you are thinking of. They are now willing to go all the way with your plans on becoming rich.

Thus, once you have such kind of persons around you, it should be your aim to grab that opportunity and never waste it. You have a lot of dreams and goals with you. I know that you may never thought of a way yet on how you would attain such riches but you will figure it out just like how you did it in your first million. Being a billionaire through the path of the ultimate investor is the recommended way of the author for a reason. It may be hard in the beginning because there a few new things to learn but once you get used to it, it will be easy. Warren Buffet have done it, so as Bill Gates and many others. A lot of people have trusted their ways. Now, it’s your turn.

NOTE: IF YOU MISSED THE EARLIER CHAPTERS HERE ARE THE LINKS:

Insights on Robert Kiyosaki’s Guide to Investing – Chapter 39

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I took off a Christmas break in blogging too, for those who are asking. I’m sorry if I failed to finish giving insights about the book before Christmas but I am definitely sure that I will finish this before the year ends. Now heading to Chapter 39 about “The Ultimate Investor”.

Although the chapter has already been discussed somehow on Chapter 26, this chapter deals with the author’s road on becoming the ultimate investor. I was pretty amazed with the story that even though it spanned a few pages and certainly a long read, I never get bored. The way that the story has been told is like a masterpiece. I would love to read it all over again. He told it from the moment he planned it until he met someone knowledgeable enough to help him in his plan and eventually until he learned everything he can. There are obstacles and challenges in between but the best thing that this chapter taught me was to never lose faith.

Losing faith is losing all the hope that we’ve got. It can also lead to losing self-confidence, and lead to a life full of misery that only some people get over the hump with. Yes, there will be times of hopelessness, times that will lead us to giving up and times that we would want to quit in our established goals and objective. Even our great author Mr. Kiyosaki had been in the same position, but he went on.

This was entitled as “The Ultimate Investor” because after being financially free, the author now seeks the path to become an Ultimate Investor. He does not want to capture and meet the same business-minded people, he now wanted to capture everyone through the stock exchange.

It was the dream of every business enthusiast, to see a lot of people get interested to grab a minor interest in the firm or business that you had built. It goes to show that you have established a good business that everyone would want to become your co-owner. Though his means of learning it was difficult, he never failed to open his eyes to everything that he could learn from his mentor. He learned a lot better than what can be provided by an educator. Through  this chapter, I had became more certain and focused on the plans I wanted to pursue this coming year.

NOTE: IF YOU MISSED THE EARLIER CHAPTERS HERE ARE THE LINKS:

Insights on Robert Kiyosaki’s Guide to Investing – Chapter 38

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I cannot believe what is this I am doing. I am already on the 38th Chapter of the book and still writing. This chapter now deals with “Analyzing Investments”. Something that every aspiring investor should know.

Just to confess, this chapter got me bored. It brings back the memories of my life as an Accountancy student. The ratios and formulas illustrated on this chapter is something that I already know. I know they by theory I must say, but I don’t know them by heart. And good investors know them by heart or asks a consultant to provide them with the ratios.

The author discussed only a few ratios in the chapter. I would not discuss those one by one but rather educate you, my readers on how the ratios help the investor. Those financial ratios can easily be provided by our reliable friend Google, but their roles and usefulness is something that only a few tell.

Whenever provided for by a financial statement, everyone would love to look at the results of operations or the profit or loss statement, because it depicts the performance of the business. Followed by the balance sheet that the only thing investors would be concern of is the assets. The financial ratios are not even provided for by the financial statements and that is why investing becomes risky.

The ratios help the investor to identify potential weak spots, problems and red flags that he should look out for. There are a lot of businesses that reports an attractive net income but if the ratios will be used, it unmasks the unreported story of the business. Once an investor or outsider learns how to unmask every business he get in touch with, it would be easy to identify which business would really be profitable in the future.

The thing to watch out for in using ratios is we tend to fail to look at the people who run the business. There are businesses that are operating good on paper that even using ratios would not unmask the decisions taken by management that would have significant effect on the business. Thus, ratios would not be enough but also perception. As an investor, we should look out also what is happening inside the business through the news and current events available, much better if you have a friend or someone inside the organization itself and ask him about his experiences with the firm.

Financial ratios is something to be analyzed on and something that must be a guide but we should not rely on it entirely for there are things that the financial statements and the ratios would not be able to tell. Knowing them is an advantage for it reduce risks of loss but it does not eliminate the loss. Every investments has its risks and rewards, thus, one must learn and analyze everything before deciding.

NOTE: IF YOU MISSED THE EARLIER CHAPTERS HERE ARE THE LINKS:

Insights on Robert Kiyosaki’s Guide to Investing – Chapter 37

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And now after covering the three phases that answers most of an aspiring entrepreneur or investor’s question, we proceed to the fourth phase of the book that asks “Who is a sophisticated investor?”. If you are a consistent follower and reader of these insights I am giving from chapter to chapter, you already know what a sophisticated investor is from Chapter 24.

But why is there another phase dedicated on what is a sophisticated investor? Because it is the easiest and most conservative way of becoming rich. If we would only know what the lawyers and consultants know, or even just a glimpse of their knowledge and background in business, we can use the knowledge for our own benefit. The book itself has illustrated a scenario that demonstrates how the knowledge in laws would be favorable in the business. After realizing it, I was amazed as well as encouraged to go and build my own business. If only existing business-owners would know what is in store for them, they might just get a consultant in an instant.

That’s too much of an introduction on the fourth phase. I haven’t even mentioned the title chapter for this one. Moving forward, the chapter discusses about “How a Sophisticated Investor Thinks”.

As I mentioned in Chapter 24, a sophisticated investor is someone with the three E’s or Excess Cash, Experience and Education. The thing I failed to mention and elaborated was on how the Sophisticated Investor thinks. I never planned it, but it brings me favor that you have to read through but we should take note what are the ideas inside the head of a sophisticated investor.

If we are to observe, most businesses had their own tax lawyers and resident specialists that help them on matters with the authorities. Tax can be the most burdensome expense for a business because it does not benefit the business, but like every costs, it can be minimized with the help of experts and that is the mindset of sophisticated investor. He is always thinking out of the box. He doesn’t go for the usual but rather for the unusual. He would think of something that was never done before and consult his lawyers for comment on the legality and effects on the business. Something that only a few could do.

Do you something in your mind that could benefit you and your business but is not sure on how to do it legally? Are you implementing something for your business but is doubting the legality in the future? There are a lot of legal questions a business should answer for themselves. Legal issues can make or break a business, which is why being a sophisticated investor should always be a consideration in planning to be one among the 10% of people who earns the 90% of the money.

NOTE: IF YOU MISSED THE EARLIER CHAPTERS HERE ARE THE LINKS:

Insights on Robert Kiyosaki’s Guide to Investing – Chapter 36

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Here we come now to the final chapter of Phase 3  that answers the question “How do you build a strong business?”. If you have read the previous chapters of the phase that starts with chapter 30, you are now very eager to know  the last building block that completes the B-I triangle.

Without further ado, I give you the last building block which is the “Product Management”. After introducing the cash flow, communication, system and legal managment, the author now gives emphasis on the product management. Product management now deals on how an entrepreneur would manage the product from its conceptualization, creation until its disposal or expiry.

According to the author, product management is the building block that does not require too much attention as compare to the earlier mentioned building blocks. I am really not convinced at first because for me, the product should be the primary concern for if you would not have the best product out there in the market, you will not be able to sell any and the business will fail, but I have been proven wrong.

It is the least concern because everyday, every hour, every minute, there is a new product or offer that becomes available to consumers or buyers. Competition will always be present and if you would compete by means of a product, you would end up losing valuable time in thinking of how your product would be more unique, better and presentable than to those of your competitors.

Whereas if you would just use that valuable time in going out and try to market your product, prepare a reliable financial statement to obtain a loan from a bank for a better cash flow, gather ideas from your team on how to improve operations or service or obtain various contracts with the help of your legal team, you would have a better business. Although a product is a necessary piece in building a business that follows the B-I triangle format, it is of the least concern because the market continuous to develop. The only time one must focus in product management was when new and innovative products or services are being offered by your competitors and you were left behind.

The best example of this one is Nokia, they were the pioneers and innovators of cellular phones, but because they focused solely on one aspect among the five building blocks of the B-I Triangle, they failed to go with the flow of the market that resulted to their downfall. It was really hard for them and it won’t be the last for sure. Any of the five building blocks of the B-I triangle shouldn’t be left out. Though some might be more important than the other aspects, equal attention must still be observed to strengthen the established business. Once the right formula has been figured out, money will follow.

NOTE: IF YOU MISSED THE EARLIER CHAPTERS HERE ARE THE LINKS:

Insights on Robert Kiyosaki’s Guide to Investing – Chapter 35

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I am very thankful this past few days, a lot of events is about to come but the most important one would be Christmas time and I am running short of time. There were still a few chapters left from the book that I haven’t read again for all of you. I also have random ideas to write on for to follow-up on this very good book but nothing’s still certain. Oh! The holiday feels, how could I get by this?

Going on Chapter 35 with the title “Legal Management”, it discusses another important building block of the B-I triangle. Being able to manage the legal affairs of the business, finances could follow. The saying that “it takes an idea to be rich” specifically applies to this building block. Having a good and profitable business idea without having the knowledge and guidance by a legal counsel would definitely of no use.

A lot of people have a lot of ideas but what separates the rich from the poor and the middle class is that the rich can buy ideas and make use of such ideas for their benefit. Throughout my life, I have seen a lot potential businesses that fail because they failed to own and secure the idea they had thought of. They never seek legal assistance to have their idea patented or copyrighted, the ending, some rich fella will buy the idea and do the legal work to claim it, after some time, those who thought of idea would regret everything. Because all they can do is to watch their dreams come true ~ the growth, the attention, the earnings ~ of the idea that they have thought of. The lonelier part is that they cannot proceed in starting over again with the same idea because the idea has been registered as an intellectual property of the buyer.

There were some who were aware of the fact that they needed to register such an idea to the intellectual property rights but failed to do so because of financial constraints. All I can wish for those people is for them to generate another good idea that can make them rich and eventually the next time, they know how to protect their idea.

A lot of business ideas has been generated by business-minded people everyday but they failed to capitalize on the idea because they never seek legal assistance or whatsoever that could preserve their claim to the idea. In this world where everything seems to be so fast, one must learn to protect his own idea before someone else get the benefits of the idea in a blink. Thus, if you have an idea that you thought would be profitable in the future, never fail to seek legal assistance.

NOTE: IF YOU MISSED THE EARLIER CHAPTERS HERE ARE THE LINKS:

Insights on Robert Kiyosaki’s Guide to Investing – Chapter 34

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First it was Cash Flow Management, followed by Communications Management, now we go to chapter 34 about “Systems Management”.

System management also traverse through a wide definition but the book is referring to the systems implemented by management in the business. It refers to the system in use by the business in its daily operations. Without a feasible and reliable system in place, there will be a lot of problems in the future.

A lot of businesses benefit heavily from the result of a systematic operating procedures. Having one is a must for every business to continue its growth and market share. When robotics has been introduced, General Motors availed it to replace the workers who have been paid their salaries, allowances and benefits. That move of GM has been criticized but it paid dividends in the end. Their production of cars has become more consistent. They have reduced their future liabilities because they have no pensions and benefits to pay for every employee who retires. But the best benefit they got is that they been recognized as producers of high quality cars.

Once quality has been established through the market, earnings will follow. If a systematic process of producing the same product over a period of time can be achieved, it will be easy for the business to grow because they will have a reputation and that reputation will easily traverse through people by word of mouth which is the most effective (and also destructive) way of marketing. The same goes for a service provider, if the service rendered is of high quality, there will surely be repeat customers and referrals would be easy to get by word of mouth.

Having an effective business operations is vital for every business. It is as important as the cash flow management as well as the communication management as discussed on the earlier chapters. Those three are inseparable and must be keenly observed for the overall growth and development of the business. Once it becomes a concern for the enterprise, it must be taken up seriously because it could lead to unsatisfied customers, potential client loss and even negative connotation. Thus, one should not leave an odd eye on the operating side of the business.

NOTE: IF YOU MISSED THE EARLIER CHAPTERS HERE ARE THE LINKS: