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