Today I was thinking about financial growth, spending, investing etc. It all started with a discussion about owning a home vs investments. One of the key concepts from Robert Kiyosaki of Rich Dad, Poor Dad fame, is that when buying liabilities (such as a car or a house) you should instead put that money into an investment that can pay for the liability, or more accurately for the payments for that liability. This does come down to being a smart investor and finding investments that have your money work for you instead of just being there. Have you ever worked for a company that had one or more employees that just showed up. They are in their chair on time, and leave on time, yet just never produce. They spend time chatting with fellow workers, or customers, or something, yet never seem to do much work. Contrast that to the employee that works hard, goes the extra mile, makes the customer happy etc. Which employee would you want to hire? Which one would you let go? With investments, putting money into the bank or a GIC is just like that lazy worker that just shows up. That productive worker becomes the investment that returns 30% a month. So, take out a loan for that car, when you can hire a worker (or an investment) that will pay you enough to cover those payments, or more. Don’t hire someone that doesn’t work, and don’t put your money into an investment that doesn’t pay. Another way to look at If you do that 4% GIC, which might take a $100,000.00 investment to cover payments on an entry level Toyota, you may never get that car. Instead, a smart investor can find an investment that pays 4% a month, which means that $400/month payment only needs a $10,000.00 investment. Which do you want? Check out “cbwealth.quest4u.cc” or “wealth.coolbalance.com” for some pointers on how to learn to do this.
5 Aug 2007