Rich Dad Power Investing Plan

Rich Dad’s Power Investing ...
a plan for people who want to afford anything they want. This is the basic plan that the richest investors in the world follow. The Rich Dad’s Power Investing Plan consists of, starting a business, investing the cash flow from the business into real estate, and then balancing your asset classes with investing your excess cash flow in paper assets.

ASSET #1: BUSINESS
Your own personal business is by far your best asset because, if successful, you can generate the most income with less work and with the least taxes.
The drawback: Of course, if you are not successful in building a profitable business, a business can be a very big liability and loss of money, which is why we often recommend starting a part-time business before quitting your daytime job.

Accelerator #1: Other People’s Money
The first accelerator in starting a business is to use other people’s money. As you become a better businessperson, this will become easier because investors like winners.

Accelerator #2: Entity Selection
Choosing the proper entity in which to hold your business is critical. You absolutely do NOT want to hold your business as a sole proprietorship or general partnership.
Review the various requirements and benefits of a C Corporation, S Corporation, Limited Liability Company (LLC), or Limited Partnership (LP) with your attorney and tax advisor to see which entity will provide the best protection for your business and result in the best tax advantages, thus maximizing your cash flow.

Accelerator #3: Other People’s Time
If you are a good business owner, you have the leverage of other people and systems doing your work. In other words, if you are a good businessperson, it is the same as earning money for nothing, once the business is up and running. Most people will have to work for money for much of their lives because they work for a business rather than work to build a business.

Accelerator #4: Tax Laws
The taxman is on your side as a business owner. Review Chapter 5 of the book Rich Dad’s Who Took My Money on how the tax laws were written to benefit business owners and investors.

Accelerator #5: Charity
My rich dad always reminded me of the saying, “Give and you shall receive.” Being generous and giving back to the community are essential elements in growing your business. You may not know how the returns on your charitable giving will be realized, but they will be. The more people you serve, the richer you will become.

ASSET #2: REAL ESTATE

Accelerator #6: Other People’s Money
My banker is on my side for investing in real estate.

Accelerator #7: Entity Selection
Entity selection is again critical in understanding the secrets and strategies that the rich have used for generations to protect their real estate assets.

Accelerator #8: Tax Laws - Depreciation and Real Estate Paper Losses
The tax man offers great accelerators in your real estate income and cash flow in the form of depreciation. You will want to get competent advice from your tax strategist, as the choice may also be important based on your state/local laws.

ASSET #3: PAPER ASSETS

Accelerator #9: Tax-Exempt
The tax man offers even greater leveraged advantages to investors who invest in projects the government needs financial assistance in.

Accelerator #10 – Hedge Funds
Hedge funds allow me to invest with insurance. They have the benefits offered by mutual funds in that they are “easy,” but without the downside risk. There are many different hedge fund strategies but their primary goal is to reduce volatility and risk while preserving their investors’ capital and delivering positive returns under all market conditions.

Accelerator #11 – Options
Investing in stock options allows me to leverage my investments in paper assets. Instead of buying the stock I can still control it through the purchase of options for a fraction of the cost.

Accelerator #12: PPMs (Private Placement Memorandums)
A private placement memorandum, however, is an offering of stock in a company that is exempt from federal registration. In March 1982, the SEC adopted Regulation D to coordinate the limited offering exemptions and to streamline the existing requirements applicable to private placements and sales of securities. Again, the documentation and legal requirements of this type of investment are critically important. You need competent securities legal advice as well as tax advice to select the funding tool appropriate for your situation.

Accelerator #13: IPOs (Initial Public Offerings)
An initial public offering (IPO) is a company’s first sale of stock to the public. Typically, an IPO involves the stock from a young, new, and not usually well known company. An IPO is highly regulated and costly to prepare, as it requires tremendous legal and accounting professional time.

Money Life Cycle Of The Poor, Middle Class and Wealthy.

Let’s discuss it in a more detailed manner.

1.) Poor – as you can see, immediately after receiving their income, they spend it for all their doodads. These people have lots of stuff in their house even if some of those are not needed.

2.) Middle Class – now this one’s a little different. The middle class thinks that buying something like a house or a car will give them an asset. But according to Rich Dad, “an asset is something that puts money into your pocket.” So they pay the down payment and the monthly dues which in turn becomes a liability because it takes money away from their pocket every month. They thought that they had an asset, but eventually it’s a liability. So the money cycle ends to expenses like in the case of the poor.

3.) Wealthy – this is the operating standard of the Create Abundance Business Community. After receiving the income, they put it on money generating assets and the profit that they acquire from those assets are the one’s they used for their expenses/liabilities. You can observe that among the three, only the Wealthy has the complete cycle. Because they prioritize passive income generating assets. That’s why even if they don’t work, money comes in.

This is one of the life-changing diagrams I’ve ever seen. Before, I had a money cycle of the middle class(at times, poor). But now, I made a solid decision to have the money cycle of the WEALTHY.

I say that if you want a radical change in your financial life, you have to start it with yourself. Its very hard to pass the core team membership. But if you’re a HIGH ACHIVER, I don’t think it can stop you. Instead, it can propel you to a new level of personal growth and success. The challenge is really on for those aspiring members and we want you to take part of it. So the question is, are you in or out?

Scarcity Mentality VS Abundance Mentality

YOU KNOW YOU'RE IN SCARCITY WHEN...

Your friend at work gets a promotion and you find yourself feeling jealous, rather than happy for him.

You see a person driving an expensive car and find yourself feeling resentful or judging her.

You make purchases on credit and live beyond your means, you're dissatisfied with what you have.

You postpone important purchases that would add dramatic value to your life, even when you have the money to make them, because you can't stand to part with your cash.

When your spouse or child asks you to buy something, more often than not your immediate response is that you can't afford it.

You find yourself frequently wishing for a better life, yet you think that it would be futile to strive for something better; there's never enough time and money to do the things you want to do.

You have ideas about how to make your life better, like switching careers or starting your own business, but are afraid to put them into action.

You keep your money in "safe" investments like Time Deposits and money market accounts because you fear losing it.

You pick the riskiest investments, cross your fingers, and hope for high returns, thinking that gambling and luck is your best path to wealth.


YOU KNOW YOU'RE IN ABUNDANCE WHEN...

Your primary focus in life is to lift, serve, and bless the lives of others.

You feel happy when others succeed-even those who may viewed as your competition-and you never feel threatened by others.

You feel satisfied, complete, joyful and calm.

The purchases you make align with your core values.

Your investments are wise; you're not naive, nor are you overly skeptical.
You perform wise, patient research and make an educated decision.

Rather than saying "I can't afford it," you ask, "How can I afford it?"

You consistently overcome fear, through faith and courage, to pursue your dreams and a career that aligns with your passion and purpose.

You're able to work with others to achieve things that you couldn't do alone.

You take responsibility for your life and your work and use your internal strength to overcome all challenges and transcend external circumstances.

What have you done today in your journey towards financial freedom?

What have you done today in your journey towards financial freedom?

Financial freedom is the dreamland of personal finance. It is the freedom to stop working when you want and maintain a lifestyle you desire.

To achieve it, the secret is to have a source, preferably have many sources of passive income. Passive income is earned without your direct involvement. It may come from rental property, stock dividends, royalties on an invention or creative work.

If you want to earn more, work less, and enjoy a decent retirement, you must create income streams that do not require your direct involvement.

To achieve financial freedom, your passive income should be greater than or equal to your expenses.

My journey towards financial freedom started years ago when I noticed that I am not getting ahead in life due to the financial mistakes I was making caused by my antiquated values and mindset which I absorbed through society's conditioning. This is when I said to myself if I want to become wealthy while I'm still young, I need to learn how things really work in the the world of business, finance and money. I started to read books on the subject and enrolled myself in an MBA course. This is a lifelong learning process so I'm continuously educating myself on these matters given the dynamic environment we live in.

I am now putting the things I have learned to practice by starting to buy rental properties. I will also start to actively invest in stocks that will give me regular dividend income hopefully in the next few months.

What have you done today in your journey towards financial freedom?

How to get out of the rat race?

Four Types of Person

There are Four Types of Person regarding Time and Money Freedom:

1) People with no time and money. They have no time because they must devote themselves to work. And they have no money because they have to pay their bills and expenses everytime they receive their salary, leaving them broke every end of the month.

2) People with time but no money. Because they don't have work, they have lots of free time. And because they don't have work, they don't have money.

3) People with no time but with money. These people are strict savers, they don't have time like the # 1 person because of work. But they have money because they save too much.

4) People with time and money. They are called, the wealthy. They have time for their loved ones, and they can do whatever they wish. Because they have passive income, they don't need to work. And its the same reason why they have money, because what they have is multiple streams of passive income..

You can be one of these persons. But you have a choice to change if you don't like your standing. In fact, a lot of people think they are destined to be where they are now. And they never realize that they had choosen to be what they are.

For me, I had choosen to be a number 4 person. And I know I can do it,

The Leader in You

Gratitude, devotion, hard work, and bold action. These words trip easily off the tongue. But they forge the soul of a samurai and lie at the heart of leadership. Practice them, and you will transform your life, as I did.”

“…Cynics may view gratitude, hard work, bold action, and devotion as simplistic notions undeserving of their attention. But observe the world around you. Note that ungrateful people are unhappy people. Note that hard work is the single most important determinant of success in life. Note how luck favors the bold. Note how devotion—to parents, to children, to superiors, to subordinates—benefits the devoted a hundredfold.

“Some may think these simple concepts apply only to followers, not leaders. But those who aspire to lead must first learn to serve. And those who would master others must first master themselves. The principles of leadership therefore apply equally to superiors and subordinates alike

Secret of Gratitude: Leaders must be grateful

Being a leader gives as an opportunity to serve others by showing them how make things happen, making a stand for them and fighting with them to meet their dreams and goals in life. We are grateful to our followers since leading them is an honor and privilege. We learn a lot about anything and grow ourselves faster by being a leader. We learn more about our strengths and weaknesses as our followers became a reflection of ourselves.

Secret of Striving: Leaders must work harder than others

Since we work harder than others we get more, we learn more, we get the best of everything the situation and the circumstance has to offer. All the money and wealth flows to the leader. A leader that works harder get to his/her dreams and goals in life faster.

Secret of Decisiveness: Act boldly at critical moments

Not only the rewards and benefits that goes to the leader but also the responsibilities and obligations. The duty to protect the community, tribe and group comes with the package called leadership. We act boldly in critical moments, we never wait for somebody to take charge. We take all the credits and blames and face all the circumstances of our actions and decisions. No matter what happen, it can be right or wrong what is important that we act and show our people that we are somebody they can rely on.

Secret of Devotion: Dedicate yourself to your leader

A leader must firsts become a follower. A follower gives full devotion to their leader. It really felts overwhelming when a follower expresses his/her devotion to your leadership. For example in our community an apprentice would come to you and say: "I will devote myself in learning everything that is needed to know to be a successful entrepreneur so that I can be of use to the community and humanity, and contribute to our vision and mission" With such powerful declaration of devotion moves and inspires the leaders.

I clearly remember when i went to my mentor and said: I will work hard and smart in order to make your business organization big and strong. As i keep that declaration and put it in action I realized that I became a leader in the process. Leading people inside my mentors organization therefore making my organizations big and strong as well.