Robert Kiyosaki is the popular creator of the Rich Dad Poor Dad series of books. He also runs his YouTube channel 'Rich Dad Channel' which has over 3.3 million subscribers. Although Kiyosaki has caused a bit of controversy in the investing world, his most basic financial tips provide solid advice, especially for novice investors.
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Here, take a look at some of the best advice Mr. Kiyosaki has to offer and how you can put it into practice in your financial life.
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educate yourself financially
One of Kiyosaki's most important pieces of advice is that you need to be financially literate, especially as a novice investor. Kiyosaki says schools don't teach financial education, so he has to work on it himself. This is especially true if you plan to use debt to create wealth, as Kiyosaki and other wealthy investors do. Debt can drain you and leave you poor if you don't understand how to use it. Education also allows you to truly understand what you are investing in. Otherwise, Kiyosaki says, anything you invest in becomes just speculation.
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invest for cash flow
Kiyosaki's preferred investment method is for cash flow. There are many ways to do this. The most obvious one is investing in rental real estate. If you buy the right property at the right price, you can earn enough rental income to not only cover your costs but also provide positive cash flow. From there, over time, you can use that excess cash flow to purchase additional assets to further increase your income.
Another way to invest to ensure cash flow is to build your own business. One of Mr. Kiyosaki's principles is that you should not work to make others wealthy, but only to make yourself wealthy. Therefore, Mr. Kiyosaki believes that if you are an hourly worker who trades your time for money, you are unlikely to become rich. But when you run your own business, other people work to generate profits for you.
The last investment method to ensure cash flow is stock dividends. Kiyosaki says that while investing in stocks can be risky in terms of capital gains, the dividends actually put money in your pocket every quarter. If you choose a high-quality company, the dividends will tend to increase over time. Once your financial education is a little more advanced, Kiyosaki suggests considering a covered call option strategy.
This is a way to earn regular income using your stock portfolio as collateral. You can keep both the stock and the income from the call option, even if the stock's price stays the same or goes down. If the value of the stock increases, you still get the price determined by the option, but that price should usually be higher than the price you paid. This is a more advanced strategy with a lot of moving parts, but it's a way to generate even higher returns from your stock portfolio.
Get started today
Perhaps Kiyosaki's best advice is to start planning for your financial future today. In this, Kiyosaki echoes the views of many other financial commentators and advisors, although his views differ slightly. Mr. Kiyosaki can learn about finance, gain experience in how businesses work and fail, and use all his spare cash and effort to continue growing until he generates enough cash flow to support him for the rest of his life. I think you should put it into your business and other assets. , including retirement.
Other advisors may recommend starting investing in the stock market or 401(k) as soon as possible, but the general principles are the same. In other words, the sooner you start learning about the world of investing and getting your feet wet, the better. , you are more likely to achieve long-term success.
Notes on Mr. Kiyosaki's advice
Decades after Kiyosaki's first Rich Dad Poor Dad book was published, some of Kiyosaki's critics believe that his job now is to provide sound financial advice. Others say it's about selling books and promoting your empire instead. It's also worth noting that Kiyosaki admits he currently has $1.2 billion in debt and filed for bankruptcy in 2012. However, while not all of Kiyosaki's advice and strategies may be suitable for all investors, the basic concepts he outlined above are sound and upheld. It is also valued by many successful investors.
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This article originally appeared on GOBankingRates.com: Robert Kiyosaki: 3 Best Investing Tips for Beginners
