Tuesday, March 10, 2009

Rich Dad TV Podcasts

I have listened to the 11 Rich Dad TV Podcasts.
These shows are about 30 min longs and here are the ideas I found valuables:

If you have an idea, protect it with the help of a lawyer, this means copyright, trademark, patent and more!

There are several type of companies that will provide different advantages:

Sole-proprieatorship is bad
=> good for taxes but not protection

general partnership is horrible...
=> you are responsible for all partners !!!

C-Corporation has no protection and more taxes

S-corporations are good.

Use LLC & LP to hold assets, to protect properties.
You should use 1 LLC for each property.
$675 attorney fee for LLC + filing fee
Create your corporation in Wyoming or Nevada => These states have the best asset protection laws, then qualify the corporation in your home state.

Investing in stocks is not too risky if you use tools like "put" and "calls"

If a stock starts to go down, you can set automatic sell order.
"Stop losses" use "put" and "calls"

If a stock goes up buy a put at current value, it's like an insurance.
buy another one later on if stock keeps raising...
if market drops... you get your stock at put value...

Mutual funds or stocks should be insured => automatically sell if loses 5%.

The rich are trying to get deeper into debts.
A bad debt, is the debts you pay off yourself.
A good or investment debt is paid by tenants.

Get Rich by taking companies public!
You wanna be a private investor in a company before it goes public
You wanna be a "selling Shareholders" (sell for 10 times what you paid)
Company going public => IPO Initial Public Offer ("buying shareholders" get the share, usually multiply by 2 or 3 quickly)

How to find companies that might go public soon?
=>Ask brokers what's hot, then find out which private companies do that, and try to invest in them and take them public.

Real estate could give you 100% return
$100 000 property
$20 000 down
$10 000 net income after expenses.
=>cash return 50%

If you could get the same house if $10 000 down your return would be 100%

Investors looks for apartment complex which are badly managed then fix the problems: reduce expenses, increase rent, reduce vacancies, restore the property...

After some time, mainly if you fixed the property and the asset value or equity has increased, you can refinance, and get the down payment back tax free because it's a refinance and you improved the equity, so no need for down, then your ROI is infinite (0 down payment)
Take your down, start something else.

In real esate, flippers are losers.
=> They have lot of work, pay a lots of taxes, and risk that the house depreciates

Rich move their money, The velocity of money.
example, you start investing in a 10 units => 100 units => 800 units => 1200 units... and you don't pay any taxes building your wealth thanks to the 1031 program.
=> cash flow of $50k / month (passive income)

Debters are winners with devaluation of currency
saves are losers with inflation

Fiat Currencies don't store value. They are not money. Fiat Currencies have value because an authority/the government says so.

If you would measured the stock market in Gold Value instead of Dollar Value, it shows that the stocks are crashing, down 50% for more than 10 years.

Government keeps printing more currency and devaluates the existing.

You should put some of your portfolio in gold, when the value of the currency goes down, the value of gold goes up.
Gold is a tool to help stabilize your portfolio.

Avoid Negative People.

When you take the money out of 401K (growing tax free), you are taxed as earned income,
so unless you are planning on retiring poor (meaning taking out a little money every year) you will pay the highest rate of taxes!

Hard Work will not make you rich.
You don't wanna be a 'W2' worker, no tax advantages, nothing to save you !

You want to convert earned income into passive or portfolio income.

The Game 'CashFlow' Punishes you for making more money, buying doodads and rewards you for investing.

Fast Track => When your passive income is higher than your expenses, then you become free.

"Mutual fund morons think they are investors"

"Diversifying is like going to a horse race and betting on every horse. The only way you win is if the darkest of dark horses wins."

How to pick a Location to invest in Real Estate
- Jobs
- Demographics, Population retiring, Population Growing
- Affordability

(Las Vegas will grow, baby boomers will go soon and keep working for cheap as they can't afford retiring fully)
(Location with lots of immigrants, they are good renters and don't buy houses)
(21 Year olds population)

Proforma financial Statement = As If = best case scenario = Lies != Actual financial Statement

Opening a franchise is an easy way to go on the B side (business owner), the franchise will help you, but don't do it your way. build a good team, hold people accountable, show leadership

Choose your advisors but take the decisions yourself and assume them.
Women investment clubs beats Men investment clubs

My assets buy my luxuries.
My goal is to create a business, then buy 2 houses a year.

Suggested Readings

Why We Want You to Be Rich: Two Men - One Message by Donald Trump & Robert Kiyosaki
Rich Dad's Advisors®: The ABC's of Real Estate Investing: The Secrets of Finding Hidden Profits Most Investors Miss by Ken McElroy
Rich Dad's Real Estate Advantages: Tax and Legal Secrets of Successful Real Estate Investors by Sharon Lechter
Rich Dad's - How To: Get Your Banker to Say "Yes!"
Rich Dad's Advisors: Own Your Own Corporation: Why the Rich Own Their Own Companies and Everyone Else Works for Them by Garrett Sutton


  1. http://finance.yahoo.com/expert/archive/richricher/robert-kiyosaki/1