Month: August 2020

How to Survive the Main Street Crisis

• 4 ways to “print your own money”
• The moment a person knows how to make money out of nothing or with other people’s money or a bank’s money, they enter a different world.
• Rickards Is Back with Urgent 2020 Election Update

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Robert Kiyosaki

Editor, Rich Dad Poor Dad Daily

Dear reader,

If you’ve read Rich Dad Poor Dad, you may recall that the title for chapter one of the book is, “The Rich Don’t Work For Money.” One of the reasons why those in the E and S quadrants have problems with that statement is because most went to school to learn to work for money. They did not go to school to learn how to have other people’s money work for them.

When Kim and I started The Rich Dad Company, we borrowed $250,000 from investors. We paid the money back once the company was up and running. Today, the business has returned multi-millions of dollars, not only to Kim and me but to companies and individuals associated with Rich Dad. As I said, capitalists are generous.

My point is that the moment a person knows how to make money out of nothing or with other people’s money or a bank’s money, they enter a different world. It’s a world almost exactly opposite the world of those in the E and S quadrants where they experience hard work, high taxes, and low returns on investment.

The reason most people believe saving is smart and a 10 percent return in the stock market is worth it is simply due to a lack of financial education.

Your best ROI is not a return on your investment, but a return on your information. This is why financial education is essential, especially for the uncertainty of the world ahead.

Taxes are Stealing Your Wealth

“Go to school to get a good job” are words that, from the beginning, program you to be an employee who pays the highest percentage of his income in taxes. When you are advised to work hard to make more money, you are inadvertently pushed into a higher tax bracket and sentenced to work for the highest taxed income: earned income.

Those educated in the mindset of the B and I quadrants operate by a different set of tax rules and can earn a lot more money and pay much fewer taxes if any.

One of the ways that the government steals the wealth of its citizens is through taxes. Printing dollars is an inflationary tool that the government uses to devalue the dollar—the more dollars there are in circulation, the less each dollar is worth. That is what we call a hidden tax, and it is a second way the government steals the wealth of citizens.

Today, the U.S. government uses inflation to steal from its own citizens by devaluing their labor and savings. In other words, the more counterfeit dollars the United States prints, the more dollars it takes for you and me to live.

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Print Your Own Money

To me, being able to print your own money is one of the better advantages of investing in your financial education. Since the government is printing more money, doesn’t it make sense to print your own money… legally? Doesn’t printing your own money make more financial sense than working harder and paying higher percentages in taxes, saving money in the bank and losing purchasing power to inflation and taxes, or risking your money for the long term in the stock market?

The way you print your own money is by achieving an infinite return on your money. The definition I use for an infinite return is “money for nothing.” More specifically, I print my own money when I get back all the money I used to acquire an asset, still own the asset, and enjoy the benefits of the cash flow from the asset.

With a strong financial education, I can print my own money via a business, real estate, stocks, and even commodities such as gold, silver, and oil. Again, the key is going for an infinite return—going for money for nothing.

#1 Print Your Own Money in Business

Kim and I started the Rich Dad Company at our kitchen table. Rather than use our own money, we raised $250,000 from investors. In less than three years, thanks to the growth of our business and the profits it provided, we returned 100 percent of our investors’ money, plus interest, and an additional 100 percent on their money to buy their shares back. Today, The Rich Dad Company puts millions of dollars in our pockets, even though we have none of our own money invested in the business. By definition, that is an infinite return.

#2 Print Your Own Money in Real Estate 

With real estate, our business plan is to use debt, other people’s money, to achieve an infinite return and print our own money.

For example, let’s say we buy a two-bedroom, one-bath house in a great neighborhood for $100,000. We pay $20,000 as a down payment and borrow $100,000 for the house and extra money for improvements from a bank and/or investors.

We improve the property by adding an extra bedroom and a bathroom. We raise the rent from $600 a month to $1,200 a month.

We refinance the property at a new appraised value of $150,00 and when we refinance the house, the banker gives us a loan of $120,000 (80 percent of new value). We get back $20,000, plus get an extra $20,000 to invest in a new property.

The loan interest at 6 percent costs approximately $600 a month. Expenses are another $300 a month, which puts a net $300 a month in our pocket in the form of cash flow. The new loan and expenses are financed by rent from the tenant.

#3 Print Your Own Money with Paper Assets

There are many ways you can print your own money with paper assets such as stocks. One way is to use option strategies.

For example, let’s say I buy a thousand shares of a stock for $2 a share. I then go to the options market and sell an option to buy my thousand shares for a $1 premium per share ($1,000) for 30 days. If the stock hits $3 per share or higher, the person who purchased the option can buy the stock at $3. If the stock does not hit $3 in 30 days, I keep his option money of $1,000. Again, notice that I buy for the long term and sell time by the month.

In this overly simplified example, selling a 30-day option puts $1,000 immediately in my pocket. If I sell another 30-day option with the same stock on the same terms and the stock does not go above $3, I make another $1,000 off my original $2,000 investment while still owning my stock. I will have made 100 percent of my initial $2,000 back, and have printed my own money via my financial knowledge. To me, this makes more sense than leaving your money in mutual funds for the long term.

#4 Print Your Own Money with Gold and Silver

I have printed my own money by building gold and silver mines and selling shares of the company in the stock market. I realize that taking a business public is not realistic for most people’s current situations, yet it is one of the best ways to take an idea and create a personal fortune.

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The B and I Quadrants

Once you’ve learned to print your own money, you are now on the right side of the CASHFLOW Quadrant. This is where you start playing by the rules of the rich.

To be clear, there are rich people in all four quadrants. There are many rich employees and self-employed specialists such as doctors, lawyers, sports stars, and artists. In the E and S quadrants, there are both rich and poor people. But the richest people in the world live in the I quadrant. There are no poor people in the I quadrant. The amount of wealth they have may vary, but no one is poor.

Regards,

Robert Kiyosaki
Editor, Rich Dad Poor Dad Daily

P.S. Jim Rickards was one of the few people to get the 2016 election correct ahead of time.

Now, he’s back.

As we approach the most critical election of our lifetimes in 2020…

What should you expect?

Will the markets crash, or will we go on another epic bull run?

Will law & order be restored? Or will the chaos spiral out of control?

Will Trump be the first president to get impeached AND reelected?

Or, will Joe Biden capitalize on covid fears to win the election?

Click here for this former government insider’s take… along with the steps he believes you should be taking right now ahead of November.

What Happens When Major Cities Go Broke WORLDWIDE

• What happens when cities across the country, or the world for that matter, can no longer collect taxes from its taxpayers?
• God’s money and people’s money has much more value and safety…
• If you want to learn about the best cryptos and the #1 way to invest in them… click here.

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Robert Kiyosaki

Editor, Rich Dad Poor Dad Daily

Dear reader,

What happens when cities across the country, or the world for that matter, can no longer collect taxes from its taxpayers?

In major cities like New York and Vancouver, the taxes the city is able to collect is dwindling as many companies and individuals are struggling financially in the wake of the coronavirus.

A number of months ago, my co-author of the book Who Stole My Pension, Ted Siedle, and I did a talk in Miami to a group of real estate investors. Ted talked about the looming failure of city and state employee DB pensions, and I talked about the failure of DC pensions.

Later that day, two school teachers, a husband, and wife came up to me and expressed their concern about the security of their teachers’ pension. After I explained their DB pension was probably secure, they sighed a breath of relief.

I then added that, unfortunately, while their retirement might be secure, young people, the future taxpayers, are destined to lose via higher taxes and fewer government services. Not missing a beat, the teachers replied, “We don’t care. Just as long as our retirement is secure.”

The reason I mentioned the two schoolteachers I met in Florida is because they did not care about future retirees. They do not seem to care if their retirement security robbed taxpayers and kids of their future.

I explained to the two teachers that the depression I see coming may be caused by the collapse of pensions. Again, they didn’t seem to care. Their dual teachers’ pensions would put them in the millionaire category.

I pushed forward explaining that, if the pensions collapse, the Fed would bail out the retirement of Baby Boomers. And bailing out their teachers’ pensions would steal from the young.

Again, they didn’t seem to care. All they cared about were golf courses and cruising the world.

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All cities count on income tax, sales tax, & real estate tax

All public pension stakeholders—American taxpayers and pensioners—need to get educated fast as to the causes of coming pension collapses and learn what they can do about it now.

Sal DiCiccio, Phoenix City Councilman, had this warning to taxpayers:

“State and local governments long ago made a proverbial deal with the devil. Politicians who didn’t want to face the music for their bad decisions made a deal with the government unions representing all these various pension funds to deliberately underestimate the average annual cost to taxpayers—so they can keep buying votes with money they don’t have. But they’re only making the problem, and the bills when they come due, dramatically larger.

How much each city, county, state, or local school district owes for their pension liabilities are determined by how much they have promised, how much money is currently in the fund, and the rate of return that fund is projected to return in the market, along with a host of actuarial assumptions like when each person will retire, and how long they’ll live after that. The higher the projected rate of return, the later retirees start collecting their pensions, and less time they’ll collect those checks before they pass away, the less a local government is forced to pay into those funds.”

The fact that America’s public pensions are underfunded has received a lot of national attention. States with the worst pension fund shortfalls include Colorado, Connecticut, Illinois, Kentucky, and New Jersey which have less than half of the assets needed to pay promised benefits and another 17 states have less than two-thirds.

Warren Buffett has described America’s underfunded public pensions as a “disaster” that companies and individuals should consider when deciding whether to expand or move into a state.

“If I were relocating into some state that had a huge unfunded pension plan, I’m walking into liabilities,” Buffett said. “Cause I mean, who knows whether they’re gonna get it from the corporate income tax or my employees—you know, with personal income taxes or what. That liability isn’t gonna—you can’t ship it offshore or anything like that. And those are big numbers, really big numbers.”

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The Fed is Printing Fake Money

I’ve said numerous times that “bailouts are the name of the game.” If Quantitative Easing (QE) continues and more fake—fiat—money is printed (coupled with ZIRP, Zero Interest Rate Policy) the world economy will move closer to the brink of collapse and wipe out the middle class and the poor. And the house of cards? It comes crashing down.

Will the next wave of big bailouts be pensions? I think so. Once again, bailing out pensions protects the “too big to fail” banks who get rich selling fake, toxic assets to the world. When the pensions go bust, the big banks will once again be bailed out in the name of saving pensioners’ retirements.

My concern is that, as the global pension crisis worsens, more and more people will turn to socialist and communist ideals—and politicians who embrace them—for salvation.

Rewrite the Rules of the Game

In 1944, 44 nations gathered at Bretton Woods Conference to agree upon the new rules of the post-WWII international monetary system.

Prior to WWII, the British pound sterling was the top dog in the world of money. Fighting WWII caused England to ship its gold to the United States to pay for the war. As WWII was coming to an end, the United States held much of the world’s gold. Since the United States had the gold, it promised to back its dollar with gold, and the U.S. dollar became the “reserve currency” of the world. In 1944, the U.S. dollar was as good as gold. Literally. The dollar was trusted and respected. That soon ended.

Between 1950 and 1960, Germany, Japan, England, and the rest of Europe recovered and began exporting products to the United States. Gold-backed dollars left the United States and Nixon and his buddies panicked.

In 1971, Nixon broke the promise made at Bretton Woods, and the United States began exporting fake money in exchange for real products such as Volkswagens and Toyotas.

The world gladly accepted these fake dollars as long as the world had confidence in the leaders of the United States. That confidence was severely tested after 2008.

Is that confidence nearly gone? Is the end near? Is the mountain of debt too high? Will more fake money keep the avalanche from coming down the mountain? Is the last snowflake on its way?

I believe so.

I believe that as the dollar continues to die, there will be another conference to rewrite the rules of the game.

That’s why I buy god’s money (gold & silver) and what I call people’s money (cryptocurrency) because I want to play by my own rules—outside of the Fed.

God’s money and people’s money have more integrity than central bank money.

Regards,