Wednesday, April 25, 2012

Robert Kiyosaki's Cashflow Quadrant - Why You Need a Home Business to Help Your Personal Finances

This is a simple review of one page of Robert Kiyosaki's book the Cashflow Quadrant. Imagine what's in store for you if you read the whole book! If your personal finances are not where you would like them to be this article will explain why instead of taking on a second job you need to consider starting your own home business; your own online home business. Imagine working in your pj's if you would like!

p.4 is Robert Kiyosaki's famous buckets of water analogy.

At the end of the story he asked the question: Are you carrying buckets of water or are you building a pipeline?

WOW! OPRAH LIGHT BULB MOMENT! AHA MOMENT! REVELATION! LET THE BELLS RING OUT AND THE BANNERS FLY. [Who said that by the way? A cartoon character?] Call it what you will. If you have read Cashflow Quadrant and this wasn't your experience you need to read it again.

My thinking was forever changed.

I had a job. I was carrying buckets of water. When I stopped the money stopped. I had all my eggs in 1 basket. Any number of things could take me down. My health, my employment situation could change, my family situation could change. We see it all the time and in this economic downturn it is magnified. We all know someone who has been down-sized, had health issues, become widowed or divorced. Any number of catastrophes can befall us. Yet we never believe it will happen to us.

When you are completely reliant on wages or salary for your income you are in a very precarious position.

If your personal finances are not where you would like; consider diversifying. Instead of getting by with less and less; instead of having an ever decreasing income circle; why not expand it? Why not take Robert Kiyosaki's advice? Instead of taking on a second job; why not start your own business? Why not start a home based business?

As long as you are working a job; you are carrying buckets of water. When you stop the money stops.

The definition of insanity is to keep doing what you are doing and expect different results. Perhaps this economic downturn is a wake-up call? It should be. Is your ladder leaned up against the wrong wall? If you are in corporate America that could well be the case.

Most people think they are financially literate but then you look at their personal finances. Their personal finances are a shambles. If you could see what people actually own versus what they have on credit there would be a lot of naked people driving around in phantom cars and sleeping in empty houses. Kind of like the story of the Emperor's New Clothes.

People tend to think if I only made an extra $10,000/year everything would be fine. Not true. People with 6 figure incomes are simply broke at a different level. They are wearing more expensive clothes, driving fancier cars and living in larger houses but they are still broke.

How many people do you know that have 3-6 months of wages saved? Do you?

If I ask you: "Is your house is an asset or a liability?" If you answer an asset you are not financially literate. People have stopped reading Kiyosaki's book at this point. So to clarify; he is not saying not to buy a house he is just making sure you understand the vocabulary of the financially literate. His definition of an asset is something that puts money into your pocket and a liability is something that takes money out of your pocket. If you stopped working tomorrow would your house feed you?

The confusion arises when you go to the bank and they get you to list your assets. They even let you name your car as an asset. And it is an asset; an asset for them! Not you! If you re-neg on your payments they get your car.

In conclusion the reason I recommend Robert Kiyosaki's Cashflow Quadrant is to give you a desperately needed wake-up call. What are your personal finances really like? Do you pay yourself 1st? Does 10% of your income get put where you can't touch it? Instead of taking on a 2nd job; I strongly recommend that you seriously consider starting your own home business.

Monday, April 16, 2012

Simple Ways Regarding How To Organize Your Personal Finances

Money is one the best causes of stress for individuals. Dealing with money takes some skill. However, an understanding of the best way to solve personal finance problems can make a huge difference in how you perceive the situation. This information will give you some advice and tips about how to get a grip on your finances.

Your credit score could even dip a bit when you first begin working on it. However, this is not an indication that you have designed a misstep. While you continue adding positive items to your credit score, your score increases.

No one is perfect with regards to personal finance. For those who have only bounced one check, your bank may accept waive the returned check fee. This may be a one-time courtesy that banks extend to get affordable customers.

Each individual should be aware of the value of their possessions. It can help a person decide whether it's better to throw something out, or start to sell it when they decide to eliminate something. You'll want to check on the significance items you might not have bought that you're considering eliminating. Sometimes an ugly vase may be a collectible to another person. A simple Internet search can give you some good info about the worth of certain items.

Some debt is actually great for your credit score. Good debts are investments like real-estate. Real-estate often increases in value over time, and all interest allocated to the loan can be deducted out of your taxes. One other good debt is affording university. Student education loans are known for their low rate of interest, and generally, students don't need to start the repayment process until after graduating.

A credit score of 740 or more will make your mortgage application a lot easier. More advantageous rates of interest are available to borrowers with scores only at that level. Improve you credit score before you take out a new loan. Whenever your credit score is low, you shouldn't apply for a mortgage unless you haven't any other choice.

Find out if anyone in your family or amongst your mates has worked in finance, as they can provide you with great advice for your business. If one does not have anyone like that, a friend or member of the family who manages money well can be sufficient.

Dealing with finances could be somewhat stressful. It will take away stress if you realize how to manage your personal finances. The preceding article was written to show you how to reduce your stress and proceed with confidence to manage your financial issues.

Monday, April 2, 2012

Educating the Next Generation on the Importance of Personal and Consumer Finance

Personal financial success in life can only be achieved through proper management of your finances. It is important that a parent educate their children, starting at a young age, to understand their personal finances and how to manage them correctly. This will set the child up for success later in life. There are many ways to teach a child about personal and consumer finance and how they can manage their own and we will address a few easy ways to start in the following article.

The most obvious way to start to teach your child about personal finance is to give them an allowance. One of the best things about having an allowance is that it teaches children about finance and helps to control their spending. It makes them evaluate and place determinations on which of the many items they want to purchase is the most important. It can also teach your child the value of the items he owns, as he will associate the cost with the item.

There are lots of ways to teach your child about earning money and you can start very young. Make sure that you can set up a "time-sheet" for your child, even if you are paying them in piecemeal for tasks. This allows a child to begin to associate and understand that money is a value placed on the time that is spent earning it. As the children get older, you can help them start small businesses of their own, such as lawn care services. This also can give your child confidence and self-esteem in life by showing that success comes to those who earn it.

You should start a savings account for your child just as soon as they can add two plus two. Starting early and establishing correct saving habits are a lesson that will serve your child very well in the years to come. It shows them that saving money makes them money. It can also be a great way for them to start saving for the big items that come up in life, like a car or car insurance when they are a teenager. Having a savings account is also a way to teach that you should have a cushion to deal with unexpected expenses that come up in life. Having that cushion can save you from financial ruin.

Take your child to the grocery store with you and don't just stick them in the cart and ignore them. Grocery shopping starts before you get into your car to go to the store. Walk them through reading sales ads, clipping coupons, and planning menus so as to stick to a budget. You can show them price per volume values and where to look for the best deals, like the bottom shelf. It is a great opportunity for you to teach them about advertising and how marketing affects spending.

By following some of the techniques listed above, you will be able to give your child a great head start in life by giving them the tools needed to handle their consumer finances as capable and mature adults.