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Real Estate Investing With No Money -Robert Kiyosaki

(uplifting music) – So what makes Rich
Dad Poor Dad different is that, as you know, my poor
dad was a PhD in education, but what does school
teach you about money? Did you learn anything
about money at school? Most people don’t. So that’s why I had my rich dad, who was my best friend’s father, and he was teaching me
what the rich teach me. So look ladies and gentlemen, if you wanna be poor, I hate to say this, you can go to school (chuckling) but you still won’t learn
anything about money. And education’s more important today, but what do you learn about money? Most kids now going to school, they’re coming out of
school deeply in debt with student loans, still not learning anything about money. Look at the middle class. You know, they may have high-paying jobs, but the jobs are going away. And what makes Rich Dad different is we teach what the rich teach people. – Hey everyone, welcome back to Advanced Lessons in Millennial Money, featuring Robert Kiyosaki. I’m Alexandra Gonzales. In this episode, we have a very special
guest, Shane Caniglia. He is the CEO and president of Rich Dad, real estate investor and business partners of Robert and Kim. Thank you for joining us Shane. – Thank you Alex, happy to be here. – Thank you. So everything so far
has been very valuable and my main question too,
after all this information and my financial education, is if I can barely afford
(chuckling) my avocado toast, how can I get enough money for a capital for a down payment for the investment? – Okay first, we’re gonna have
to cut the avocado toast out, no I’m just kidding.
(Alexandra laughing) So the first thing is, is
OPM, other people’s money. So let’s look at this from
a big picture point of view. I get this question a lot. Trillions of dollars move hands every day throughout the stock market,
throughout bank loans, throughout personal loans, car
purchases, retail purchases, so on and so forth. The reason I’m starting with that is is you have to get
the concept in your brain that the money is out there. And other people who have money, they wanna find good investments, but they don’t wanna put the
work into finding the deal. So once you learn how to find the deal, and you get a good deal,
and the numbers make sense, and you can give somebody a
return on their investment, it would be foolish to get into what a good return would be because each deal is on
a case-by-case basis, there’s not a magic number where you have to hit X% every time, so don’t fall into that trap, but you have to get a good return. So once you set that return up, you’d be quite surprised, once you start within your network, your family, your friends
and so on and so forth, how much other people’s money is out there that is looking for a good deal. They don’t have to do
a lot of work for it, they get a return on it and they also own part
of the physical asset, that physical asset being the
property you’ve purchased. These are things that a lot of
people actually get scared of and I find it interesting because actually, that’s
the most exciting part. That’s where you have to focus
on your financial education. You have to understand what
does other people’s money mean and how do you present that good deal? That’s why, at Rich Dad, we
preach financial education. – So Robert actually
explains OPM perfectly, so let’s watch a clip
of what he has to say. – You see the beauty about real estate is you learn to use debt to get rich. I’ll give you another tip. If you’re gonna be rich, you
have to learn to use debt. It’s called other people’s money. So when I hear poor people say to me, “I don’t have any money,” I say, “‘Cause you’re
an idiot, that’s why.” (audience laughing) You’re not supposed to use your money! You’re supposed to use
other people’s money. “But that’s debt, I don’t wanna do that,” and so they stay poor. (swishing)
– So OPM is something we’re not
taught about in school. Now I would like to pick your brain about the major considerations
investors need to look at, and look for, when they are
searching for a property. – ‘Kay, great, so, these
are the key questions that the considerations are, arguably, some of the most important things that you have to, not only address, but you have to make sure
that they’re in line. So, when we talk about considerations, the first one is you gotta look
at the top line of the deal, you gotta make sure your
numbers roll out and make sense. And in those numbers, you have to make sure
you’re considering things such as taxes, property
taxes won’t go away, you have to consider things such as a percentage of
potential loss from non-rentals, so empty, right, or
vacancies, that’s a big one. The next one would be
your maintenance issues, anything that’s gonna happen
from air conditioners, to toilet to plumbing
and so on and so forth. The other one would be
basic type of udpates that you have to do when a tenant moves in and out. So for example, anything from
the cleaning of the carpet, to the replacement of the carpet, to dishwasher, appliances,
things of that nature, and then everything else
starts to drill down to, now there are other things. If we get into ’em all,
this video will be too long, but these will get you thinking. And then the next level is when you start getting into
back to the top of the line, in terms of that mortgage
payment, the interest rate, how long is the note gonna be carried. And you also have to include a percentage, if you’re not going to
manage the property yourself, then you have to have some feel, or some concrete number to use, that you’re gonna pay a property manager that’s gonna take care of all these issues that could pop up. – In 1997, when I released
Rich Dad Poor Dad, that booked caused a bit of an upset because I said, “Your
house is not an asset.” So in today’s world, if you wanna be rich, you have to know this, between
assets versus liabilities. One of the reasons so many people are struggling financially today, is simply because they’re calling
their liabilities, assets. Such as, your house is not an asset, your car is not an asset
and things like that. So very simply, when I was a young boy, my rich dad taught me, he says, “You have to understand
a financial statement.” So this is an income statement,
this is a balance sheet. Now this is overly simplified. He says, “What creates
something to be an asset “is very simply assets cashflow money “into your pocket. “And a liability takes
money from your pocket.” So for most people, their
houses are not assets, they’re liabilities, ’cause every month it takes
money to live in that house. Even those who say, “Well I don’t have any debt
on my house, I paid it off.” Look, you still have
insurance, still have upkeep, you still have maintenance. – So recently, over the summer, I planned to practice
the Rich Dad philosophy and I searched for my investment property so I could be prepared for the future, just like we’ve been taught here. – That’s awesome.
– Doing the real thing. And I just realized that the numbers really didn’t make sense and I did go through
that emotional attachment that you talked about, which was what was really hard for me when I tried to separate from the deal. But I realized that if the
numbers don’t make sense, at least I went through
the process, learned, and now I’m prepared if there is a crash then I can go in and take advantage of the
education I received from this. – Right. So the great thing you said there is that you put into practice the Rich Dad education. So you took what you learned and you actually practically
applied it to a real deal, and that deal, at the end of
the day, did not make sense. That’s just as important
as making the deal itself, because you didn’t make a mistake. Now we don’t wanna be
caught into the space of being too afraid to make a mistake. That we have to be really careful of because eventually, you’re gonna have to sign on the
dotted line, as they say. But I just wanna repeat,
you have to take action. You can only do so many things and learn so many things before you take it, and you apply it and you learn what the
actual world is really like. So, I’m gonna say it just one more time, doing the real thing, is
where you will really learn and making sure you are
emotionally responsible and strong to walk away, like you did, if the deal doesn’t make sense. Very important. – I agree 100%. And one thing that you
mentioned very valuable was the best deal is the
one that you walk away from. – Exactly.
– And that was crucial for me because I would’ve been
stuck with an investment that had negative numbers because of the emotional attachment. – The negative numbers, now stop you from going on to deal two,
three, four, so on and so forth. And it doesn’t just stop you emotionally because you’re gonna be
stressed out about it, but it stops you at the bank.
The bank’s gonna look at that and say, “Hey, you’ve gotta “straighten out this first property, “or you won’t be able to
use that first property “on your list of assets “when you try to get
approved for the next loan.” And you just don’t want that to happen. So being emotionally
responsible is very important, but again, can’t say it enough, you gotta get at it, you
gotta do the real thing, you gotta apply your education. – Thank you so much Shane for teaching us all about
financial education, OPN, and the pros and cons of
renting versus buying. – You’re welcome, happy to do it. – Thank you. Join us next time for Advanced
Lessons in Millennial Money. Don’t forget to subscribe,
hit the like button and comment below. (Alexandra speaking in foreign language) (uplifting music)

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