| When Robert Kiyosaki, author of the Rich Dad | | | | But many newbie investors fail to put |
| book series, bought his first property he | | | | themselves in the hands of a mentor, which |
| was, of course, ecstatic. Finally, he had | | | | his a mistake. It is good to have a trusted |
| done it. He had taken that first important | | | | friend-not an advisor who stands to make a |
| step in truly building his wealth that the | | | | buck off of you, but someone who truly wishes |
| man he called his "rich dad" so often | | | | to educate you-to keep them from making dire |
| touted-investing. He knew it was very | | | | mistakes. |
| important to become an investor and make his | | | | |
| money work for him. | | | | Another mistake that rookies often make is |
| | | | the very one that Kiyosaki made-they allow |
| The trouble was, the property he purchased | | | | themselves to be talked into deals in which |
| was a losing deal for him. He didn't see this | | | | they lose money, after getting bogged down in |
| at first, thanks to a smooth-talking real | | | | mathematical "if's" that look really good on |
| estate agent. But when he took the contract | | | | paper. "If the property appreciates at this |
| to his rich dad, he learned what a mistake he | | | | rate, then I can make up all the money I lost |
| had made. According to that deal, he would be | | | | in the previous year and...and..." That is, |
| losing money each month. He thought it would | | | | IF the unit stays rented. IF the tenants pay |
| be all right because he had been told that | | | | you on time. IF you don't discover a |
| lost money was an investment in the future | | | | significant flaw with the property. IF the |
| appreciation of the property. | | | | tenants don't cause a significant flaw with |
| | | | the property... |
| He also was not aware that there would soon | | | | |
| be major construction near the site, which | | | | The list goes on. It's bad enough if you're |
| would hamper access for quite some time. Who | | | | making money on the deal and something like |
| would want to live there? | | | | that happens. If you start out losing money, |
| | | | you're almost guaranteeing your own failure. |
| What saved Kiyosaki on that deal was having a | | | | Yet a smooth-talking professional can make it |
| mentor like his rich dad, who made him go | | | | sound as though they are doing you a favor by |
| back and renegotiate the deal. The more | | | | taking your money. |
| experienced investor told him that you should | | | | |
| never settle for losing money early in the | | | | And finally, newbies often fail to consider |
| deal, in the hopes that you will make up for | | | | the environment within which they are making |
| it later. That is a bad deal. | | | | their purchase, just as Kiyosaki did. With |
| | | | real estate, unlike with other investments, |
| Rich dad made him go renegotiate the contract | | | | the local financial ecosystem can seriously |
| and instead of losing money each month, he | | | | affect your investment, and so you have to |
| would be gaining $80 per month. His rich dad | | | | stay on top of what is happening in the |
| asked him how many of those losing deals he | | | | neighborhood and the rest of the city. |
| could afford at that rate. You can do the | | | | |
| math. He couldn't even afford the one. But at | | | | The thing is to educate yourself and keep |
| a gain of $80 per month, Kiyosaki's reply to | | | | your head at the negotiating table. If you do |
| that question was, as many as he could get | | | | those two things then your deals will likely |
| his hands on. | | | | be just that-deals. For you. |
| | | | |