It’s Time to Rise Above and Beyond
We just celebrated Mother’s Day and are reminded just how much time and effort so many women out there sacrifice for their families. If you are one of those Moms, it’s time to think about yourself for a change.
What are your goals for financial freedom?
If you don’t have any, ask yourself what you really want to accomplish in life, and start making your dreams a reality. And there’s no reason to dream small. As our friend Donald Trump says, “I like thinking big. If you're going to be thinking anything, you might as well think big.”
Don’t let fear get in your way. Surround yourself with supportive people and increase your financial education every day. For help, check out the Triple-A Triangle™ of Aspire, Acquire and Apply to help you reach your dreams and our resources on the site. You’ll also find inspiring stories from several women who overcame their fears, pursued their dreams and are now well on their way to financial freedom in my book, “It’s Rising Time!”
And for those of you who have already started investing in assets, it’s time to dream bigger and turn good deals into great deals.
How do you do that?
Well, instead of just looking at the cash flow on a potential investment, start looking at the upside, or “what you can do to increase the value of an asset.” For example, you may be able to add coin-operated washers and dryers or covered parking to your apartment buildings. Perhaps, you learn about a new, medical breakthrough and can invest in a business that has expertise in this new technology? Finding solid investments that provide cash flow is good, but when you find investment opportunities that increase value with outstanding upsides, that’s exciting!
How do you find upsides?
Being successful in anything in life is all about solving problems, knowing what your customers want and delivering it. Think about it. Steve Jobs gave us the personal computer. Henry Ford made it possible for the masses to have their own automobiles. Sara Blakely gave us Spanks® body wear. Anita Roddick gave us natural skin-care products through the Body Shop... the list go on. The same goes with finding investments with upsides.
Think about a problem that needs to be solved. For example, do your tenants want a washer and dryer in their apartment instead of having to carry their dirty clothes to a laundry facility? If so, look at the costs involved and how much you can increase the rent by adding the machines or hook-ups to each unit.
If the Net Operating Income (NOI), or the gross income minus expenses, increases with this change, then you increase the value of the property. This means that you are not only giving your tenants what they want and helping to solve their problems, but you are also increasing your cash flow in the process!
Be creative!
Instead of stressing out about solving problems or purchasing a specific investment, be creative. Start thinking “outside the box” and get to know what your customers want so you can help make their lives easier. It can actually be an enjoyable process because you get to think of crazy solutions. And if none of them work, then you don’t have to purchase the investment. However, if your idea works, you may end up with a great upside, a more valuable investment and additional cash flow. Now, that’s fun!
Stop worrying and start increasing your cash flow!
With so much going on in our busy lives, it can be easy to put our dreams aside to make sure we fulfill our responsibilities to family members, friends, partners, bosses, and more. But in order to achieve financial freedom, it’s essential to have a goal, get the financial education necessary to make that dream a reality and take action on what you learn to make it happen.
And once you start pursuing your goals, don’t forget to think big. Instead of fearing problems, get the support you need to be successful. Have fun and be creative. Then, you will be more likely to find solutions that will help your customers and turn your good deals into great deals.
Have you found an upside to your investment? Please share your insights below. We’d love to hear from you!
For more help to support you on your journey to financial freedom, check out our free, financial education community here.
And to give your children the financial education they won’t receive in school, check out Robert’s new book, “Why ‘A’ Students Work for ‘C’ Students” here.
This week I would like to use a video to show you how you can find some very important economic data for yourself.
This video provides step-by-step instructions on how to use the website of the Bureau Of Economic Analysis to find data on the US Gross Domestic Product. To watch the video, click on the first link below.
After you watch this 7-minute video, I suggest you re-read one of the first blogs I wrote for Rich Dad: Economic Forecasting 101. To do so, click on the second link below.
Please let me know if you found this video useful.
Richard
Link 1:
http://vimeo.com/66266325
Link 2:
http://www.richdad.com/Resources/Rich-Dad-Financial-Education-Blog/February-2012/Economic-Forecasting,-101.aspx
What your words say about who you are and what you believe
My rich dad once said to me, "If I listen to a person's words, I begin to see and feel their soul." Rich dad understood what many successful business people understand, that being able to quickly measure up a person based on things like body language or the words they use is just as important as understanding financial statements and economic reports.
One of my rich dad's greatest skills was being able to "read" people, but he also believed you couldn't judge a book by its cover. Like Henry Ford, my rich dad didn't have an excellent education, but both men knew how to hire and work with people who did. Rich dad explained to me at an early age that the ability to bring smart people together and work as a team was one of his primary skills.
As a young boy, I sat with my rich dad when he hired people. From those interviews I learned to listen, not so much for just words, but also for core values. From that experience, I learned that, when it comes to the CASHFLOW® Quadrant, people in each quadrant—E for employee, S for self-employed, B for business, and I for investor—had their own way of talking that expressed who they truly were at their core.
E-quadrant words
A person who comes from the E quadrant might say, "I'm looking for a safe, secure job with good pay and excellent benefits."
Words like these tell me that a person's core value is security in the face of fear. People who embrace security as a response to fear like to have things in writing, knowing exactly what they'll make and what their benefits are, such as health insurance provided by the employer. For them, the idea of security is often more important than money.
Employees can be presidents of companies...or janitors. It's no so much what they do but the contractual agreement they have that's important to them.
S-quadrant words
A person who comes from the S quadrant might say, "My rate is $75 per hour." Or, "My normal commission rate is six percent." Or, "I can't seem to find good people to work on this project and get the job done right." Or, "I've got more than twenty hours into this project."
Those in the S quadrant like to be their own boss or "do their own thing." When it comes to money, those in the S quadrant don’t like to have their income dependent on other people. If they work hard, they expect to get paid for their work. Conversely, they understand that if they don't work hard, they don't deserve to get paid well. They have fiercely independent souls.
B-Quadrant words
A person operating out of the B quadrant might say, "I'm looking for a new president to run my company."
Those in the B quadrant are almost the opposite of those in the S quadrant. They like to surround themselves with people who can do the job better than they can. Their true motto is, "Why do it yourself when you can hire someone to do it for you, and they can do it better?"
Those in the B quadrant like to work on their company and hire smarter people to work in it.
I-Quadrant words
Someone operating from the I quadrant might say, "Is my cash flow based on an internal rate of return or a net rate of return?"
Investors make money with money. They don't have to work because their money is working for them. Because of this, they know how money works. They understand the language of money, and they speak it fluently.
What do your words say about you?
Have you ever stopped and listened to the words that you use? A good exercise this week would be to slow down and listen to yourself. Find out what you say and how you say it. You may find that at your core, you're someone different than you thought you were.
The same holds for those you work with or who work for you. Listen to their words this week as well.
In the end, our words are good indicators of what's really important to us. The good news is that once we understand who we are at our core, we can then decide if we like that person or if we want to aspire to be something more. But it all starts with listening.
Want to learn about finanical education with other like-minded individuals? Join our free, financial education community here.
You have many choices on your path to financial freedom
Last week, I talked about what you should invest in for your own financial freedom. It’s a personal decision, and you have many choices when it comes to assets (or those investments that put money in your pocket). Each asset class has pros and cons and requires different levels of time, effort and education.
That’s why most people invest in paper assets, or the stock market. These are the easiest assets to get in and out of. And even though your financial planner or advisor may tell you that your retirement funds or 401K investments are diversified, they really aren’t. Why? To be truly diversified means to diversify, and that means to invest in more than just one asset-class.
What are the top four, asset classes?
There are numerous ways to invest and build wealth. And once you increase your financial education, you’ll have a better understanding of the best investments for you. But to help you get started, here are some of the most popular asset-classes.
Paper Assets
As I mentioned above, these are assets like stocks, bonds, mutual funds, and retirement accounts where you can invest in stock options, stock futures and foreign exchange. Paper assets also include real estate investment trusts, or REITs, and exchange-traded funds (ETFs). Whether you are investing for capital gains or for cash flow via stock dividends, there are many, paper assets to choose from.
Commodities
Commodities include metals (gold, silver, copper, etc.) food (grains, corn, coffee, and sugar) and raw materials (oil, gas, cotton, etc.). Commodities are generally a capital gains, or loss, investment, and you can buy future contracts of any commodity through the future exchanges. If you are a new investor, start small and build your financial education. For example, purchase a silver coin and then watch its value increase or decrease in your daily news. Your financial IQ will go up.
Business
This is an asset that people are becoming more aware of with television shows like “The Apprentice,” “Shark Tank,” and others. You can invest in your own business or someone else’s private business or company. The whole point is to generate a return back to you, the business and your investors and/or lender. Just be sure to do your due diligence and analyze the project, the partners, the financing, and the business and management team before making a business investment.
Real Estate
I saved my favorite asset class for last – I invest primarily in real estate because it fits my formula for financial freedom. Real estate investments either provide cash-flow from rental properties or capital gains from buying and selling (flipping) a property.
With real estate, you use leverage, or the ability to use other people’s money (OPM) to purchase the asset. As I talk about in “It’s Rising Time!”, “A property that is highly leveraged means there is a lot of debt on the property compared to the equity, or current market value minus the debt. The higher the debt on the property, the lower the cash flow. The lower the debt, the higher the cash flow.”
What Assets Will Give You Financial Freedom?
When it comes to choosing investments for your financial freedom, it’s a personal choice that depends on your specific goals in life. And while it might be overwhelming at first, start small. As I say in the Triple-A Triangle™, Aspire, Acquire and Apply. Set your goals, research and increase your financial education and then take action. Many women (including me) have changed their life for the better by investing in assets, and you can too.
What one step are you going to take today on your journey to financial freedom?
To get more information and inspiration from others as you start your journey to financial freedom, check out our free, financial education community here.
And to give your children the financial education they won’t receive in school, check out Robert’s new book, “Why ‘A’ Students Work for ‘C’ Students” here.
The necessity of knowing what you believe about money and what's important in life.
Most people don't take the time to sit down and understand what they really believe about money. For some, money is the root of all evil, to be avoided at all cost, not talked about, and demonized. People who make money are the enemy. It's the rich against the poor.
For others, money is everything. They'll sacrifice friends, family, and integrity to get it. It's a dog-eat-dog world.
For others still, money is merely a tool.
For better or for worse, our understanding of money often shapes our life. And our understanding of money is often something that is passed down to us from a young age, received without a critical eye, and lived out in unseen ways. Because of this, money often rules us in ways we can't understand, because we don't truly understand money and the way in which it works.
Money is evil?
My poor dad had a strong belief that the love of money was evil and that excessive profit meant you were greedy.
As the head of the Hawaii school system, he felt embarrassed when newspapers published how much he made because he felt overcompensated in comparison to the teachers who worked for him. He was a good, honest, hardworking man who did his best to defend his point of view that money wasn't important in life.
My highly-educated, yet poor, dad constantly said:
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"I'm not that interested in money."
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"I'll never be rich."
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"I can't afford it."
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"Investing is risky."
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"Money isn't everything."
Money is an important tool
My rich dad had a different point of view. He thought it's foolish to spend your life working for money and to pretend that money wasn't important. Rich dad believed that life was more important than money, but that money was important for supporting life.
He often said, "You only have so many hours in a day, and you can only work so hard. So, why work hard for money? Learn to have money and people work hard for you and you can be free to do the things that are important."
To my rich dad, what was important was:
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Having lots of time to raise his kids
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Having money to donate to charities and projects he supported
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Bringing jobs and financial stability to the community
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Having time and money to take care of his health
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Being able to travel the world with his family
Those things take money," said rich dad. "That's why money is important to me. Money is important, but I don't want to spend my life working for it."
What's important to you?
Most people find the same things to be important that my rich dad did. I know my poor dad did.
The problem for my poor dad, however, was that his attitude towards money kept him poor. And because he was poor, he didn't have the ability to fully do the things that were important to him.
The truth is that money isn't everything, but it does help us do everything we love.
So, what's important to you? Are you freely able to do the things you love? Or are financial struggles holding you back?
And how do you view money? Is it evil or is it a tool to help you do what's important?
How you answer that question changes everything.
Need help answering that question? Join others in our free, financial education community here to help you answer that very important question.
This is the final post I’m writing in a series on what I call Rich Dad Scams, scams designed by the rich to keep you in your place. They are the “rules” you’re supposed to follow that will keep you an employee and keep you from getting rich while the rich get richer.
The reason why so many people buy into these scams is because some of them, like working harder and saving money, used to be viable. If you followed them, there was a reward, but not anymore.
As we’ve seen in other scams like paying off debt, living within your means, and saving your money, the Rich Dad Scams I’ve identified keep you from truly putting your money to work. They keep you from turning your money into more money. In other words, they keep you poor.
Today, we’ll take a look at Rich Dad Scam #8, “Invest for the long term in a diversified portfolio of stocks, bonds, and mutual funds.”
The investment illusion
If there’s anything to be learned from the last few years of financial mess, it’s that nothing is guaranteed. And that includes all the long-term investments that your financial planner will encourage you to buy, such as mutual funds, stocks, and bonds.
It’s worth noting that financial planners didn’t exist until about forty years ago, when people were forced to take control of their own retirement funds through vehicles like the 401(k). Financial planning is an industry created by the banks to make money off the financially illiterate. It takes only thirty days of training to become a financial planner. You have to go to school for more than a year just to become a massage therapist.
Nearly every financial planner will tell you that in order to be financially secure, you must diversify. By this they mean to invest in stocks, bonds, and mutual funds. Unfortunately, this is not true diversification. Rather it is diversification in only one asset class, paper assets—the class where banks make big money in the form of fees. Virtually ignored are the other asset classes, real estate, commodities, and business.
The diversification trap
But, you say, my financial planner helped me plan wisely. We invested in lots of different things, so that if one company’s stock or one mutual fund takes a hit, there are others that will go up. This is one of those scams that make sense on paper. Of course, the more spread out you are, the more protected you are from losing money.
Except for the fact that everything you’re invested in is still on paper, it’s based on the same fragile economy, and the same investment model. When the stock market goes down, it goes down everywhere, not just in certain places. Investing in Microsoft and McDonald’s won’t make any difference if the market tanks and everything goes down. Widely investing in different mutual funds spreads that risk around even more, but the risk is still the same and the hit will be the same when things go south.
True diversification is investing across different asset classes, not different stocks. This holds true with any of the asset classes. If I’m invested in condos, apartments, and houses, my portfolio looks diverse, but they’re all still real estate assets. So I have real estate assets, commodities assets like gold and silver, business assets like my companies, and yes, some I have some paper assets as well. But I know they’re not going to make me rich.
Taking control
The real issue here is that by buying paper assets at all, you’re putting control of your money in someone else’s hands. A CEO makes a bad decision, and you’re left holding the bag for his mistake when the stock drops. The only control you have over paper assets is to sell them. Holding on to them, you’re just playing a waiting game and crossing your fingers. And it’s even worse if you put those paper assets into a 401(k), you have even less control, they’re locked in, and you’re penalized for taking those funds out or borrowing against them.
True diversification requires financial intelligence, which comes from financial education. If you don’t have the desire to increase your financial intelligence, then by all means continue using your financial planner and investing in only paper assets, as those investments are set up so that even a monkey could do them. If, on the other hand, you want to be rich, I encourage you to ignore Rich Dad Scam #8, “Invest for the long term in a diversified portfolio of stocks, bonds, and mutual funds,” and instead increase your financial education and begin working towards true diversification.
Financial Freedom is About You
Kim, what should I invest in?
I am asked this often, and it’s a question I can’t answer. Why? … Because your goals of financial freedom are very personal, and they depend on what you want to accomplish in life.
And for many of you out there, this may be a new concept. Instead of thinking about your children, spouses, friends, aging parents, and others first, you actually need to focus on what you want.
It’s just like on an airplane when the flight attendants tell you to secure your own air mask prior to helping your children – If you don’t take care of yourself first, it’s very difficult to care for others. With this in mind, a good place to start as a new investor is to ask…
What investments interest you most?
As you increase your financial education and conduct research, you’ll find that there are many investments out there. Most of the major, financial magazines and television shows focus on stocks, bonds and mutual funds, also known as paper assets.
Many of the financial “experts” out there promote these investments as less risky and the “safe” way to go. And those who do not have financial intelligence often just hand their hard-earned money over to these people. Why not? It’s easy just to let someone else handle their finances so they don’t have to think about it!
But know that there are many, “alternative-investments” available to help you reach your goals of financial freedom.
Pay attention to the investment areas that you find most interesting. It’s crucial you choose the asset that best suits your personality, values and lifestyle. After all, being an investor is a lifelong activity so you want to find something that you’ll actually like to study.
And this doesn’t mean that you need to stick with just one type of investment. In fact, you’ll want to diversify your investments across several classes. You’ll frequently hear financial planners say, “Diversify your portfolio,” meaning to spread your money over several investments to reduce risk. They are usually referring to the various types of investments you purchase within your stock portfolio, like large and small cap, high technology, alternative energy, etc. But when you do this, you still have all of your money in the same asset class, paper assets.
To truly be diversified means to diversify, not just within paper assets, but across all asset classes.
There are many types of assets you can invest in, but the four primary assets are business, real estate, paper assets, and commodities. I’ll go into these in more detail in the future, but for now, open your mind to other, investment possibilities. Look at what is out there and stop handing your money over to others to manage just because it’s easy.
If you truly want financial freedom, it’s time to change your mindset about investing and take action!
What are you going to do to learn one new thing about investing today? Let us know below.
To conduct more research on various investments and start your journey to financial freedom, check out our free, financial education community here.
And to give your children the financial education they won’t receive in school, check out Robert’s new book, “Why ‘A’ Students Work for ‘C’ Students” here.
In November 2002, (then) Fed Governor Ben Bernanke made the most important speech of his life. It was called “Deflation: Making Sure It Doesn’t Happen Here”. In that speech he said, “I am confident that the Fed would take whatever means necessary to prevent significant deflation in the United States…” ; and he outlined the “means” he had in mind. First, the Fed would cut short-term interest rates (the Federal Funds Rate) to zero. And, if that didn’t do the trick, it would print money and buy long dated bonds issued by the government and by Fannie Mae and Freddie Mac, in order to push down long-term interest rates, too.
Well, the Fed has cut short-term interest rates to zero. It has also printed more than $2 trillion and used that money to buy long-dated government bonds and mortgage-backed securities, thereby pushing down the yield on long-dated bonds. The yield on 10-year US treasury bonds hit an all time low of 1.4% in July 2012. In fact, the Fed is printing money more aggressively now than ever – at the rate of $85 billion a month since January.
But, IT’S NOT WORKING! Despite the Fed’s best efforts, the threat of the United States sinking into deflation is intensifying. Last month, the inflation index that the Fed watches most carefully, the Personal Consumption Expenditure (excluding food and energy) Index, increased by only 1.1% compared with one year earlier. And, as can be seen in the attached chart, the trend in inflation is decelerating rapidly.
Since 1960, this measure of inflation has never been lower. However, it looks like it will be lower soon. The global economy is very weak and weak demand is driving down most commodity prices. The Financial Times recently reported that Brent oil is down 34%, copper down 31% and corn down 21% from their recent respective peaks. Numerous economic articles have begun to argue that the “Commodities Super Cycle” is over and that prices have further to fall. Sharp drops in commodity prices lead to lower levels of inflation even in those indices that strip out food and energy prices.
Meanwhile, almost all the recent economic data out of the Unites States indicates that increased taxes and reduced government spending are causing the economy to slow sharply in the second quarter. Austerity is also causing the recession/depression in Europe to intensify. Even China’s economy is slowing more rapidly than most had anticipated. In short, all signs are pointing toward a growing danger that Deflation could soon take hold in the United States as it did in Japan more than 20 years ago.
The question, literally the trillion-dollar question, is: What Is The Fed Going To Do About It?
I feel pretty certain they are going to do something. As I wrote in my first book, "The Dollar Crisis", deflation is the Fed’s worst nightmare. Bernanke has staked his reputation on the Fed’s ability to prevent deflation. I don’t think he will stand by idly while his “Bernanke Doctrine” (to coin a term) is proven to be false.
The odds are rapidly rising that the Fed will soon once again increase the size of QE 3. In mid-April, James Bullard, a voting member of the Fed’s Federal Open Market Committee, publicly stated that he would support such a move if inflation continued to weaken. Alternatively, the Fed may attempt to pull a new trick out of its hat. Chairman Bernanke once mentioned dropping money from helicopters. Don’t underestimate how far he will go to prevent deflation… and to defend his reputation. Deflation would ruin him.
The Fed is meeting now (April 30th to May 1st). It’s statement at the end of its meeting on May 1st could set off fireworks in the financial markets. If the Fed does announce any kind of additional monetary stimulus, stocks and gold are likely to rise and the dollar is likely to fall (in the near term, at least). If no additional stimulus is announced on May 1st, keep an eye on the core PCE price index when it is released at the end of May. It may show the lowest rise since 1960. If so, the chances of additional stimulus from the Fed at its June 18th – 19th meeting will jump sharply.
Finally, on a personal note, I would like to thank all of you who have signed up to watch my course, Capitalism In Crisis. For those of you who have not, I would recommend that you do. The offer’s still open. Please click on the following link for details:
http://www.richdad.com/Resources/Updates/capitalism-in-crisis-he-global-economic-crisis.aspx
Anyone who says that money isn't important obviously has not been without it for very long.
The year 1985 was the longest and hardest of my life. Kim and I were homeless. We were unemployed, had little-to-nothing left in our savings, our credit cards were maxed out, and we were living in an old, brown Toyota. After three weeks of that, a friend found out about our financial situation and invited us to stay in a basement room. We stayed there for over nine months.
During those times, Kim and I often fought and argued. Fear, hunger, and uncertainty has a way of shortening our emotional fuse, and we usually end up fighting with the one we love the most. Yet, love held us together through those hard times.
Get a job?
We kept our financial woes quiet for the most part, but when a friend or family member found out about our struggles, the first question they always asked was, "Why don't you get a job?"
At first we attempted to explain ourselves, but it didn't do much good. To someone who values a job, it's difficult to explain why you might not want one. We had a few odd jobs here and there, but those were only to keep us fed and gas in the tank.
At the time, the idea of a safe, secure paycheck was certainly tempting. But we didn't want safety and security. We wanted financial freedom. By 1989, we were millionaires. By 1994, we were in a position to never work another day in our lives.
No money, no problem
I often hear people say, "It takes money to make money." This is not true. For Kim and I to go from homeless in 1985 to millionaires in 1989, and then to financial freedom in 1994, it didn't take money. We had no money when we started, and we were deeply in debt.
It also didn't take a formal education. I have a degree, and I can tell you that achieving financial freedom had nothing to do with what I learned in college. I didn't find much demand for my skills in calculus, spherical trigonometry, chemistry, physics, French, and English literature in the real world.
What does it take to get rich?
I'm often asked, "If it doesn't take money to make money, and schools don't teach you how to become financially free, then what does it take?"
My answer: It takes a dream, a lot of determination, a willingness to learn quickly, the ability to use your God-given assets properly, and to understand how money works and can work for you.
It starts with financial education
All of the qualities necessary for getting rich, start with financial education—a type of education that you can't get in a traditional school. My financial education started with my rich dad, my best friend's dad, and continues today through books, seminars, learned lessons, and mentors. From all these sources, I learned about cash flow, debt, business and investing, taxes, and more—and how to use each to make myself rich.
If you want to be rich, I can't stress the importance of starting your financial education today. Take some classes, read a book, attend a seminar, and find a great coach. It's the most important investment you can make.
And if you want your children to be rich, it's imperative you have a strong financial education that you can pass on to them. That's what my latest book, Why "A" Students Work for "C" Students, is all about. The greatest gift a parent can give to a child is the gift of financial education.
I encourage you to start your financial education. But I also encourage you to never stop learning—and to never stop teaching. Way leads to way. Pass on your knowledge and knowledge will come to you.
Join a free, financial education community full of like-minded individuals here.
A Woman’s Intuition Can Go A Long Way
As you begin your journey to financial freedom, you’ll need to make a lot of decisions. Some will lead you in the wrong direction, but they’ll provide opportunities to learn. Other times, you’ll make good decisions and your journey will go a little smoother.
“What’s the biggest investment mistake you ever made?”
I’ve been asked this before, and I have to say I’ve made many mistakes along the way, including losing deals over bad investment-decisions or choosing a bad partner. And looking back, all of my major mistakes have one thing in common – Not trusting myself. And I get it. When you are starting a new venture with little experience, there is a lot of fear and anxiety involved.
But ladies, don’t ignore that little voice or feeling in your stomach when you make decisions!
It’s easy for me to say this now, after years of investment experience. But I was once in the same place you are now. You can only read and research so much, and then you need to take action as I talk about in the Triple-A Triangle™. And that’s when you have to start making decisions that affect your life, your financial well-being and your overall goals.
For example, several years ago, Robert and I met with a successful investor who told us about his unique and confidential trading system that was the core of his success. We toured his plush offices and met his team, and all seemed to be as we were told. Later that night, we all went to dinner. And after several glasses of wine, the investor and his team members turned into obnoxious, rude, womanizing, and embarrassing people. Other restaurant patrons actually got up and left because of their crude antics! I don’t blame them as I didn’t want to be there either.
I had a bad feeling about these people, but the returns on his investment were too enticing. Greed silenced the little voice I was hearing, and we went through with the investment. To make a long story short, we found out that this investor was a crook from reading a newspaper article!
This man turned out to be a liar, conning his investors out of millions of dollars. He is now in prison for many years. And while I lost money on this investment, I used my mistake as an opportunity to learn a very important lesson:
Trust Your Gut!
According to The James Randi Educational Foundation:
“Intuition has been explained by pseudoscientists in ways ranging from the unlikely to the ridiculous, but the phenomenon itself is very real. In fact, we could not survive without it.”
“Consistent findings that women outperform men in identifying, discriminating, and interpreting nonverbal communication including facial expressions, gestures, body language, and inflections reach back to the 1970s. There are also findings which suggest that women encode expressions more accurately. Men and women differ in a vast array of nonverbal behaviors – smiling, touching others, proximity to others, laughing, nodding, gestures, and so on.”
With this in mind, listening to your “inner voice,” or intuition, can play an important part in the decisions you make, especially if you’re a woman. You’ll become more in tune with it as you become more experienced. In the meantime, here are some additional tips I use to reduce fear and risk when it comes to investing:
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Have a back-up plan.
When I invest in real estate today, I create three, back-up plans for all of my existing properties in case things go wrong. When making investment decisions, think about all of the things that could go wrong and plan ahead as much as possible. This will help you feel more in control and reduce risk and fear.
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Find people who know more than you do.
When you’re not sure about a decision, find an expert who knows more about the subject matter than you do and get their insights. This way, you’ll have more knowledge to make your decision.
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Check with supportive partners.
What does your support team think about the decision you have to make? By hearing different responses, you may look at your decision in a new way.
Little Voices, Big Decisions for Financial Freedom
Sometimes, you have to make fast decisions on your own and don’t have time for the above. When this happens, use your financial education and listen to your gut. Realize that sometimes you have to walk away from a deal, even if you are emotionally attached to it.
But no matter what choices you make, know that you are learning valuable lessons along the way and increasing your confidence and expertise with every step. It’s all part of your journey to financial freedom.
Have you ignored your gut instincts and made a bad mistake? Tell us about your experience below.
For additional resources to help you on your journey to financial freedom, check out our free, financial education community here.
And to give your children the financial education they won’t receive in school, check out Robert’s new book, “Why ‘A’ Students Work for ‘C’ Students” here.