Uncategorized Archive

Free Book Summary – Unfair Advantage: The Power of Financial Education – Written by Robert Kiyosaki

Robert Kiyosaki has one glaring message. The U.S. needs financial education. Right now our education system is broken and nothing is being taught that prepares people for financial freedom. All of Robert’s books are good and teach basics about financial education and the need for continuous learning. Rich Dad / Poor Dad is another famous book by this author. We will profile that book in a separate summaryThe Cashflow Quadrant is a very important concept that people need to cement in their memory if they want to get a handle on financial freedom. The quadrant consists of the following:1.) E – Stands for employee
2.) S – Stands for small business or self-employed
3.) B – Stands for big business (500 employees or more)
4.) I – Stands for investorTraditional education prepares us for the E and S quadrant. The mantra has been go to school and then college to hopefully get a good job and save in a 401K for retirement. As many of you know this is not a good model in this day and age. On a side note, I was very fortunate to grow up with an excellent financial teacher. My father taught the principles that Mr. Kiyosaki teaches in his books Rich Dad / Poor Dad, The Cashflow Quadrant and this book Unfair Advantage. I can also tell you that most people are financially uneducated. Authors like Mr. Kiyosaki as well as Dave Ramsey are really needed and our doing what should be taught in our school system at a national level.Why is this important to me?This can be answered by asking a few more questions. Do you know the difference between good debt and bad debt? Can you define an asset and liability in simple terms?Do you know there are three types of taxes for income?If you are unclear on any of these then you need to read this book. In short form, I will answer all of these questions. Good debt is anything that spits of positive cash flow and increases in value. Thus if you have a debt on a rental house that yields positive monthly cash flow then that is good debt. If you have credit card debt that you don’t pay off each month then that is bad debt. In a nutshell, good debt makes you money and bad debt costs you money.
Assets and liabilities! Anything that generates positive cash flow is an asset while anything that costs you money is a liability. Example: A business that generates monthly profit is an asset. Your home is a liability. I know many of you will disagree with this but your home costs you money each month. This is not a bad thing but because you need a place to live but it is a liability.The three types of income include: Ordinary, Portfolio and Passive. We will get into more detail on how these play a role in your financial freedom later in this summary. This book is important to you if you want to be financially free and escape the rat race of running out of money before the end of each month.There are several examples and details outlined in Unfair Advantage but for the sake of time we will cover each in summary.1.Knowledge – Knowledge put to use equates to power. There are several ways to make money be it in a business, real-estate, stock market, content creation, licensing deals, internet marketing or several other endeavors. The point here is that nothing happens without educating yourself. Warren Buffet the second riches man in the world is known for his constant reading and learning abilities. The premise of Unfair Advantage is with very high financial education, money flows in rather than out. You can pay zero in taxes and earn millions with very low risk by using other people’s money in good or bad economics. This creates an extreme unfair advantage.2.Taxes – Taxes are government incentives to get people to do what they want them to do. Thus because businesses create jobs and wealth, they have tax strategies as incentives to keep the economy going. There is one huge premise that people need to understand. I will lay out the difference. When you are an employee, you work, pay your taxes and then get your money to pay your expenses. When you are a business, you work, pay all your expenses and then pay taxes on what is left. This is totally legal and can boost rates of return legally. Remember one thing – Tax avoidance is prudent while tax evasion means jail time.3.Debt – Good debt creates true wealth by allowing you to use OPM (Other People’s Money). This is very powerful and requires discipline. This is one area I
wish this book talked about in more detail. Please note that debt used wisely can create leverage and unlimited wealth. To much debt used wrong can create financial ruin. Also, know that 85+% of the U.S. population has too much BAD debt. This is not what we are talking about. This needs to be taken care of as well to truly achieve financial freedom. The use of debt is an advanced strategy and needs to be used wisely which requires financial education.4. Risk – The biggest risk in investing comes from the financially uneducated giving their money to financial planners and hoping things work out. This by far has caused large losses for people. Inflation is running rampant right now even though the government says it is not. This is a bigger risk for savers than taxes. Saving money as an investment is a bad idea because over time the value is eaten away through inflation. 401K’s and mutual funds along with diversification are all pitched as NOT risky. This is furthest from the truth. 1. Mutual funds are subject to double taxes as well as fees which eat away at your returns. Also, you are not in control of your money. Note: This does not mean that ALL funds are bad. This is where financial education comes in. Several financial planners will tell their customers to diversify. According to Warren Buffet – “Diversification is a protection against ignorance.”5. Compensation – The rich don’t work for money. Think about hard work for a moment. If you work overtime then you are trading hours for dollars. The problem becomes that your marginal tax rate increases as you make more ordinary income. Your overtime is taxed higher as you work more. I am not against hard work. Just make sure you couple it with SMART and RIGHT WORK as well. The rich work to buy assets that create cash flow. Your goal should be to have your money work harder than you do and make you more money as soon as possible.What asset will pay for your liability? This concept was first covered in Rich Dad / Poor Dad. This simple question changes the whole frame of mind and if people followed it then they would be in much better shape financially. This means that if you want a new boat then what asset will pay for the boat? Once you grasp this simple idea then your world will change.I hope you have found this short video summary useful. The key to any new idea is to work it into your daily routine until it becomes habit. Habits form in as little as 21 days. I highly recommend ingraining the knowledge of compounding in your head. Answer the following correctly and you understand the power of compounding. Would you rather have $1,000,000 cash today or a penny doubled daily for 31 days? You can email me at [email protected] with your answer.

Are You Ready For Online Business Success?

Starting an online business become a challenge for you, especially when you’re equipped with the proper knowledge, planning and business strategy. Choosing the market share is the first step towards your online business, but there are many other important factors to consider before starting. Are you ready for a successful online business? Here are some important things to consider so that you are really ready to do business online:1. Prepare Business Ideas Before You Begin
By your thinking about an idea before you start an online business can help you decide which online business that needs to be done or started, so it can provide benefits and new challenges for you in business online.2. Marketing Plan
Your marketing plan will consist of a variety of ways you plan to promote and build your network. This includes both clients and customers, and represents an important step for your business, both online and offline. If your internet business ideas can not be promoted properly, you will not get the right opportunity. Designing a marketing plan is an important step toward success. Whether you choose to launch a retail site, newsletter, or even a blog, consider different approaches to prefix your online business can succeed.3. Designing Your Website or Blog With Success
If you do not know or not a web expert with enough to build or design their own Web sites, you can rent or hire a professional web designer to manage your website. Make sure you choose something that will attract customers and make it easier for people to find your product. You can also take advantage of free blogs as well. You want customers to be able to continue to receive from you with ease, so a good idea to include your e-mail address or phone number for contact. Whether it’s from a retail or service business, a presentation that can help you make the sale.4. Build Online Credibility
Online business you need to build credibility to attract customers, clients and customers. You can do this by marketing and promoting your website using the existing variety of ways. By using various strategies to build credibility online, and you’ll start seeing quick profits from the credibility that you build.5. Study
Many learning and experimenting can help you also in achieving success, but it takes patience and for all that there are stages of the process. The more we learn it the sooner we achieve success. But we also have a lot to learn from people who have been successful in doing business online.Easy – I hope this can be useful for those of you who will start an online business, good for a beginner you do not know yet who will be the online business. congratulations for your business.

The Lure of Easy Money: Islamic Finance in the Age of Capitalism

Money. Money makes the world go round, or, well, any direction you want if you own it. So, when it comes to easy money, boy, it makes the world go haywire! Easy money – that is earned without the sweat and toil, normally, required for earning a livelihood. Who wouldn’t, at least, be tempted by it?Society and its priorities change with the seconds of the change in time. Whereas morality and integrity were of utmost significance at a time in an obscure past, the priority of society, today, is amassing heaps of wealth. One may question, why not? If, having more zeros after a figure in your bank statement, surely, means having a greater influence and a vaster dominion over the world, then why are you playing the guilty conscience card on us?Well, but, I say, wasn’t it us, in the first place, to form a direct proportion between wealth and influence in the world? You, seriously, cannot tell me that this is how it has been since time immemorial! About time we embarked on some insightful journey, wouldn’t you say?If money was really directly proportional to influence, then the exemplary case of the second caliph of Islam, Umar ibn al-Khattab r. a., for instance, would be a scientific anomaly!It was in 637 AD that after a prolonged siege of Jerusalem, the Muslims finally took the city. While Heraclius, the Byzantine Emperor, had fled, Sophronius, the Greek Orthodox patriarch, surrendered the city on the condition that no one was to be harmed. The terms were observed and the patriarch gave the key to the city to Umar ibn al-Khattab r.a.Umar r. a. entered Jerusalem, to sign the peace treaty, with humbleness, walking in by foot alongside his servant who was comfortably being conveyed by a camel. Umar r. a. and the servant had been travelling by foot and on the camel in turns (Muir: 135).When Sophronius met the Ameer-ul-Mo’mineen, Umar r.a., one of the most influential men in the history of Islam and the rest of the world, he was dressed in his travel-stained battle tunic, while Sophronius was attired in sumptuous robes. Sophronius was very surprised to find the Commander of the Muslim world dressed in anything but royal clothes and even questioned Umar r.a. about the simplicity of his apparel, to which he replied that Allah SWT doesn’t “demand extravagance”.The Patriarch then explained that he did not wear all the regalia to adorn himself but to ‘check the confusion and anarchy in the world’ and he was “God’s office”. In other words, for the sake of appearances, he had to portray in his dressing that he was a representative of God. It is, indeed, the concept of appearances that has confused us as to what influence is in actuality. That confusion has, consequently, led to forgetting the reason behind the creation of lofty appearances earlier in time, even if it was a result of flawed thinking.Sam Polk, a former hedge-fund trader and founder of a non-profit organisation, Groceryships, brilliantly scrutinized the reality of the addictive rat race of amassing money in a New York Times article saying that the money-spawning Wall Street, in reality, is “a toxic culture that encourages the grandiosity of people who are desperately trying to feel powerful”.Thus, today, the focus of our society has been reduced merely to the goal of generating easy money. Money that is easily earned does not worry about the path or means chosen for reaping it. Every professional field has ample of evidence with this regard, in fact, every professional field has become an example of this problem.Whether it is a doctor prescribing extra medications or recommending unnecessary laboratory tests to earn extra commission; or a judge ‘fixing’ a case with a politically influential defendant in return for a nomination to be elected to the District Court; or even a teacher passing a failing student, who goes to his/her house for private tuitions; or the role of media in selectively portraying jigsaws of a scenario that misrepresents the entire picture of truth to please governments and ruling powers of the world; the evil of easy money tempts and ensnares us with its shiny traps in every sphere and every nook and corner of our lives.Deep down everyone knows between right and wrong. Every one of us feels a pang of guilt when we are about to board the bus leading to bribery, dishonesty, greed, et cetera. The effects of friction between our conscience and our choice are terser, initially. However, with time and continuality, the friction smoothens out and choosing a wrong, but an easier path, to our goals doesn’t seem to disconcert us.In fact, calculated steps are taken by big businesses and governments to erase the divide between what is the right or wrong method and/or means of earning an honest livelihood, as it, ultimately, means expansion and prosperity for them in this chain reaction. So is the case with Islamic finance and the concept of Sukuk – Sharee’ah bonds.A conventional bond is a certificate which, as per the terms set, when once bought from the issuer requires the issuer to pay the holder of the bond the face value in addition to the agreed amount of interest when it reaches maturity, or to pay other benefits, such as prizes given by drawing lots, or payment of a fixed amount, or any rebate. It is an asset-based investment, where the holder of the bond, strictly, does not have ownership of any tangible assets associated with the investment they made, save the certificate.According to the Islamic Fiqh Council, having any kind of dealing with bonds of the above stated terms is haraam (forbidden) no matter whom it is issued by and no matter what name it is given as a disguise, according to the Sharee’ah (Islamic law), because they are riba-based loans, and riba (interest) is haraam in Islam.The reason why Islam strictly forbids dealing in interest in any arrangement is because it is deemed an exploitation. In Islam, if a person contributes towards the capital of any business, they should be entitled to ownership of the associated assets and an equal bearer of the profits and loss of the assets they are backing.There have been Muslims, who, despite knowing that interest is forbidden in Islam, have voluntarily dealt in it, because of the lure of easy money. However, there has been a great number of Muslims, who have consciously avoided going down this path, adhering strictly to their religious doctrines. This, evidently, was a big loss for banks and businesses that were interest-oriented. Therefore, to include that large section of the Muslim population that avoided dealing in interest-based money, the big fish in the world of finance, came up with the idea of “Islamicizing” banks and other concomitant businesses, and as a result, bonds, too.What started off with a fa├žade of a sincere attempt at creating Islamic banks, which was a huge success among the Muslim masses, very soon overtly degenerated into the capitalist pothole. The only difference that remains today betwixt common banks and Islamic banks is the inclusion and/or exclusion of the term Islamic. The products on offer at Islamic banks are the same that are offered by a conventional bank, barring the difference in English and Arabic terminology.Semantics does not really qualify as a stamp of religious approval and, frankly, accounts to nothing. A spade is a spade no matter what colour it comes in. The fact is that 97% of the world’s money is intangible, created not by the governments, but by banks when loans are made. That money is only visible in our bank statements. Therefore, if banks were creating Islamic finance products, it obviously was not going to be based on tangible cash, as it only existed in electronic form.Correspondingly, Sukuk (bonds) are also one of the concomitant features of “Islamic” banking and have been extensively endorsed by many Islamic banks. The market of Sukuk has rapidly augmented in recent years with a net worth of billions of dollars. So much so, that CNBC called the year 2014 as the year of Sukuk bonds.Traditionally, what differentiated Sukuk (bonds) from conventional bonds was that the buyer of Sukuk became its legal owner of a portion of an/some asset sold by the issuer. The buyer is then allowed to rent that portion of the asset(s) to the issuer.Consequently, the assets should be tangible, with physical substance rather than an intangible asset. Perceptibly, this concept is much more secure than that of the conventional bond dealing with electronic money – a substitute for hard cash.It was not that the concept of Sukuk was drastically different than conventional bonds that made it such a hit, but, predominantly, the fact that they were backed by religious scholars that ignited its phenomenal growth. Since Sukuk issuers did not follow this traditional concept but a tweaked concept of Sukuk bonds, where the buyer does not get ownership of the assets that he/she buys. The namesake Sukuks were just as intangible as the conventional bonds, which is in violation of the Sharee’ah.According to a Bloomberg’s report, Sheikh Muhammad Taqi Usmani, chairman of the Bahrain-based Accounting & Auditing Organization for Islamic Financial Institutions (AAOIFI), an authentic authority on Islamic finance, stated that 80% to 85% of Sukuk issued were not in compliance with the Sharee’ah.But, as stated earlier, corruption and its infesting claws have reached every capillary of the human world, and thus, in order to procure the respectability of religion and beguile the uninformed Muslim, and, of course, the partially tempted Muslim, Islamic approval is bought from dishonest and immoral, shady ‘scholars’. As per a BBC report, a Dubai-based investment banker revealed that the same products that are offered at conventional banks and businesses are created, however, for them to be Sharee’ah compliant, the banks keep trying their luck with Islamic scholars by calling them up one after the other, until finally, one cedes into the easy income in the form of a handsome bribe and sells his services that include, the glowing Fatwa (seal of Sharee’ah approval).Even the method of gaining an approval is not an example of ingenuity, just like the products. Obtaining approval via bribery in the financial market has been in existence since a long time. You can draw a parallel with the way investment banks bribe rating agencies to award their conventional bonds with a triple A rating.In consequence, with the endorsement of this ‘legal’ deception, the same conventional banking products, albeit with a new dress of Arabic terminology and religious sanction, are sold to millions of this fresh, unexplored sector of the Muslim population, which was difficult to access prior to this stroke of imitativeness.Nonetheless, all is not gloomy. What still remains with us is of great significance and that is the liberty of choice.Times are tough, we have to walk on tiptoes to safeguard ourselves from falling victims to the lure of easy money, yet we have the independence of making our decision, whether it is to yield into the materialistic world or honour our sense of conscientiousness.We will be beset with fraudulence and trickery every step of the way, whether exploiting us in a disguise of religious sanctity, or through some other agency that appeals to our sense of right and values. But then again, essentially, we have been bequeathed with the faculty of thought, analysis, and making calculated decisions. What decisions we make will be decisive of who we are as individuals.The Panama Papers incident should make us question whether the ‘influential’ public figures of today were successful in earning respect for themselves through their scheme of making easy money. That should serve as a reminder and what we should ask ourselves before giving into ways of generating easy money is: whether it really is going to make us more influential, or not? Whether earning money through someone else’s hard work, actually, accounts for anything, or not? Whether influence exists without values, without honesty, without honour and integrity? Whether influence really is directly proportional to the accumulation of wealth?