Real Estate TERM of the DAY
01.20.11
We will be talking about two TERMS today, click on the TERM to watch the video. AD VALOREM and AD VALOREM TAX.
Wraparound mortgage or “All-Inclusive Deed of Trust”
01.20.11
A wrap-around mortgage, ALL-Inclusive Deed of Trust, is a way that a buyer with a downpayment but not so good credit but working on it to have the seller offer a junior mortgage which will encompass an existing loan or loans on the home. Under a wrap, a seller accepts a secured promissory note from the buyer for the amount due on the underlying mortgage plus an amount up to the remaining purchase money balance.
The buyer of the home will make the monthly payments to the seller. The seller is responsible for making the payment to the underlying mortgagee (i.e. the mortgage company they have their loan through). If the buyer defaults on the loan to seller then the seller has the right to foreclose to get the property back.
Now if the seller defaults in making the payment the buyer could and most likely will loose the home and for this I would recommend that you (seller and buyer) set up an Escrow account using a third party company. Talk to you titlecompany, split the cost of the set up and the monthly fee and this way buyer pays into this and the Escrow pays out the mortgage and the left over amount if any they will send to the seller.
Because wraps are a form of seller-financing, they have the effect of lowering the barriers to ownership of real property; they also can expedite the process of purchasing a home. An example:
The seller, is offering the home for $150,000 with the existing first mortgage of $90,000 at 5% there is a difference of $60,000. Buyer offers the $150,000 with a $10,000 downpayment if the seller will carry the $140,000 at 7%. The mortgage the seller takes from the buyer is for the amount of the first mortgage plus the negotiated amount that is left of the sales price, minus any down payment and closing costs. The monthly payments are made by the buyer to the seller, who then continues to pay the first mortgage with the proceeds. When the buyer either sells or refinances the property, all mortgages are paid off in full, with the seller entitled to the difference in the payoff of the wrap and any underlying loan payoffs.
Typically, the seller also charges a spread. For example, a seller may have a mortgage at 6% and sell the property at a rate of 8% on a wraparound mortgage. He then would be making a 2% spread on the payments each month (roughly, anyway. The difference in principal amounts and amortization schedules will affect the actual spread made).
Please be AWARE that title is actually transferred from seller to buyer, wraparound mortgage transactions will violate the due-on-sale clause of the underlying mortgage, if such a clause is present.
SELLER Financing
12.22.10
People who are wanting to buy a home but cannot because or the economic crisis and credit crunches. Having a down payment si nothing more than a distant reality and a dream of them owning a home starts to fade. To own your own home is considered to be the most solid financial foundation you can have for your future, and not being able to afford one could be a heartbreaking to those with poor credit and lake of funds.
We have an answer to your woes of financials and purchasing a home. SELLER Financing - allows buyers an easier option of buying their home. This is an opportunity of a rent-to-own situation and unlike Lease with Option. Instead of having to come up with the value of the home, the seller carries the back loan and you pay the seller a monthly fee until the amount of the loan is paid off. This is beneficial for both the buyer and the seller in many ways which is why so many people have opted to sell their home this way.
Suppose you are interested in purchasing your home and as you are browsing through all of the houses on the market you find one that you really like. Your next step would be to go to the bank and apply for a loan but low and behold you are denied due to a low credit score. A real estate agent might then suggest seller finance options with you. If you are approved for a loan amount that is less than the value of the home the seller would finance you the rest of the amount though a monthly payment system. There are also sellers who are willing to do this with the entire value of the house if you are completely denied a loan amount.
The benefits to the seller is the fact that he or she will have a monthly income from the amount coming in towards the purchase of the home. This can be a very strategic move in times of financial burden. The seller continues to carry the note on the home and based on a legal agreement, those purchasing the home pay the monthly amount that is due which puts money into the pocket of the seller. Having an extra income can be quite a large help when money is tight. Once the terms of the agreement are made and the value of the home has been paid off, the home then belongs to the purchasers free and clear.
This is, of course, a very helpful and beneficial move for the buyer as well as the seller. The buyer does not have to worry about losing their dream home due to bad credit. They can still buy the home while paying the seller on a rent-to-own basis. Seller finance options means that those interested in buying the house do not have to fret over not being able to afford a down payment or paying up front on their dream home. In the end, all parties are satisfied with the terms of seller financing as it is a win-win situation.
Overall, seller financed homes are one of the best economic steps a person can take towards buying or selling their home. The home is bought and paid for after the buyer is through making the agreed upon payments to the owner of the house and in the end, the dream of owning your own home is still very much alive and attainable. Owning a home is a fundamental building block towards stabilizing a financially secure future and getting financed through the owner of your dream home makes it possible to reach out and grab a hold of that future without stress or worry.
Crafty Ideas for Winter Curb Appeal
11.19.10
During summer months when gardens are in bloom and the sun is shining bright, curb appeal comes naturally to many homes. But when the autumn chill turns to winter cold and the sun sets earlier in the day, it becomes more difficult to create that inviting exterior look that grabs buyers from the curb.
Fortunately, it is possible to create striking winter curb appeal without expensive or complicated exterior changes, says Charlene Storozuk, a home stager and designer with Dezigner Digz in Burlington, Ontario—a city that averages 55 inches of snow per year. It just requires a little creativity. She and other home-design experts offer these eight tips:
1. Add splashes of green and purple. Plants, grasses, and evergreens can liven up a home’s winter landscape. Experiment with tall grasses, such as fountain grasses, that survive harsh winters. And in late fall and early winter, plants from the cabbage family add a vibrant purple color. Make the front door the focal point with a large wreath adorned with a colorful ribbon. To finish the look, place large, colorful planters filled with evergreens beside the front door, suggests Elizabeth Lord, broker with Carolina Farms & Estates LLC in Rock Hill, S.C.
2. Give it seasonal sparkle.. Transform an unsed bird bath or fountain into a seasonal display by adding twig’s with red berries. Or fill frost-resistant urns with twigs, winter greenery, and sparkly baubles (sold at most craft stores), Storozuk says. For extra sparkle, roll twigs in glitter and incorporate a gazing balla mirrored glass ball available in various colors into the display.
3. Make the garden statuesque. Roman or Greek themed outdoor sculptures can add class and elegance to a garden in winter. Be sure to use frost-resistant statues so they don’t crack, Storozuk says. Place the statues strategically throughout the garden to draw buyers’ eyes around the outdoor space.
4. Light it bright. During the winter, it’s more likely that buyers will be viewing home after sunset. Use clear flood spotlights to focus on the home’s architectural features, Storozuk says. Keep exterior lighting fixtures at maximum wattage and clean them regularly. When snow covers the ground, Michele Thompson, broker-owner of White Fence Real Estate in Vevay, Ind., takes photos of listings at night with all of the interior lights on—the light bounces off the white snow to create a warm, inviting glow. For the best results, turn off the flash, and use a tripod to avoid blurring, she says.
5. Show off the lifestyle. Just because it’s cold outside doesn’t meanyou can’t use the deck. Shovel your backyard sitting area and leave your grill uncovered so buyers can envision themselves using the space, Storozuk says. If the home has a hot tub, leave that open and running during showings as well.
6. Make the deck an extension of the house. Set up your outdoor tables and chairs just as you would in warmer months. “Home owners often cover their furniture and place lawn objects haphazardly on the deck,” says Kitty Schwartz, president and owner of Classic Home Staging in Katonah, N.Y. For added appeal, she adds a weatherproof cafe set with pillows that play off of interior accent colors. “Glancing out onto this type of vignette can make the indoor space feel larger and more interesting,” she says.
7. Create a photo display of sunnier days. Show buyers what the outside of the home looks like during other seasons by displaying some landscape photos in frames or using a digital photo frame with a slide show of images. “This will give a sense of what the property looks like at other times of year,” Storozuk says. If the home has a garden, make a list of what’s planted where. “Perennials can be expensive,” she says, “so treat them as a selling feature.”
8. Don’t forget to clear a path. If the ground is covered in snow, the simplest and most important thing you can do is shovel the driveway and sidewalks and keep the home’s patios and decks as clear as possible so buyers can get a sense of their true size. By Melissa Dittmann Tracey
Common misunderstandings on Credit.
11.15.10
The most common misunderstandings on Credit– and what will really hurt (or help) your score.
1. Paying Bills on Time Will Improve My Score
“This is a good start,”, “But it’s not the key to the kingdom.” With FICO scores typically ranging from 350 to 850, 35% of the points on your score are directly tied to whether you’re making your payments on time. That leaves 65% of your score that has nothing to do with missed payments. “You cannot hang your hat on whether or not you are just making your payments on time, and assume you have fantastic credit,” he says.
2. Carrying a Balance Is Good
“I’m quite sure the credit card industry started that [rumor],”. Although carrying balances will cost you in interest and financing charges, from a credit score perspective, there’s nothing wrong with carrying a balance on your credit card. But very large balances will affect your “creditization” — the percentage of your credit limit that you’re carrying as a balance. Maxing out your credit cards will hurt your score. What you really want is a relatively low balance — never more than 15 percent of your overall limit.
3. HR Can See My Credit Score
Although a lot of people treat them as though they are interchangeable, credit reports and credit scores are two completely different things. Employers in most states can look up your credit report as part of a pre-employment screening (and during your term of employment) — but they do not have access to your credit score.
Who can see your score? Any lender, insurance company, landlord, or utility provider can buy your score from one of the three accredited credit report agencies. They use that score to determine the amount of risk they’re taking in doing business with you — then use it to grant or deny you, and to set the terms.
4. Foreclosures and Bankruptcies Stain Your Score for 7 Years
This one is partly true: Whether you face a short sale, a foreclosure or bankruptcy proceedings, you’ll have that black mark on your credit report for at least seven years. (A bankruptcy will actually be on there for 10.) But your credit score does improve as that item gets older; you just need patience and good behavior. And as a matter of fact, you can have a very solid credit score in three or four years. Just don’t fall back into the same bad habits.
5. Short Sales Are Better than Foreclosures
The assumption is that a short sale is actually better for your credit score than a foreclosure, but in reality, they have the same effect. It’s certainly better for the neighborhood than a foreclosure would be — someone is keeping the house clean, mowing the lawn, not ripping copper piping out of the wall — but from a credit-score perspective, there is no difference.
I hope you’ve found this helpful. Please let me know if this was of help. “Absolute Truth the Credit Industry Doesn’t Want You to Know!”
“WHAT DO YOU WANT MOST, & WHY?” con’t 6
11.13.10
Real Estate NOTES- Known as mortgage notes or deeds of trust. These are contracts with a promise from the holder to pay secured by real property. Privately held notes are created by a transaction by the seller agreeing to finance the deal. These notes can be sold at a discount to be bought and sold at tremendous profits. Banks create notes (mortgages) and secured by the Federal government. They get cash for new loans lenders will bundle their existing loans into packages and sell them at a discount on what is called the secondary mortgage market.
Privately held notes are similar but much smaller scale. A seller will act as the lender and with a down payment from a buyer they then create a note with the duration, interest, and payments. If and/or when the seller no longer wants to hold the note or needs money, this note can be discounted and sold at some point to investors looking to purchase and hold Notes. Note brokers earn a percentage of the principal balance of the note.
You can make money in paper 2 ways: 1) actually buying the notes at a discount then collecting the monthly payments. 2) Brokering notes to sources that you can find (via the net) for a commission. “*Caution some states may require you get a securities license*”
“An average not can be 6 to 7 percent; the low is 3 percent and the high 10 percent.”
AUCTIONS- An exciting and potentially profitable way to buy real estate is at “Court House Step” or there are even companies that are out there that hold auctions such as http://www.auction.com/ and the government auctions. Auctions have been around since ancient Rome. Going after government Auctions are distressed properties and the best bargains can be found. The key points with them are these: know when and where they are taking place. Identify the government agencies that hold the auctions in your area and narrow the list that fits your requirements- the ones that deal in the type of real estate you want to buy. Then get on the bidders list to receive announcements in the mail, send a written request indicating you are a private investor specializing in auction sales. You will then get or should get a confirmation that your request has been received and processed.
You will want to look through the prospectus which is an outline of what will happen at the event. This will give you the date, time, and place of the auction along with the prebid conference and the times when you can inspect the properties. There will be general rules and basic financial requirements. This will NOT give you enough information to make a good bid or nonbid decision so you will have to do more due diligence. Keep in mind these two rules on EVERY auction and they are “Research and patience”
“Attend auctions on a regular basis whether you intend to buy or not, this is to ensure you don’t get dropped from a list of bidders and each auction is a Learning experience.”
“WHAT DO YOU WANT MOST, & WHY?” con’t 4
07.27.10
PRE-FORECLOSURES/FORECLOSURES – These are Homeowners who are facing financial difficulties. These homes can be termed as the best when it comes to making more profits; these are discounts on property that are already discounted.
You don’t have to deal with the foreclosure attorneys, the bidding process and so on. There is no uncertainty about who will finally win the bid. The deal can simple be where the house owner sells his property to someone else who is interested in buying it. However, there is a little catch to it. These properties are not any ordinary property, these are the ones where the home owner has been unable to pay mortgage for certain period and has already received a letter of “notice of intent“, which clearly states that the home owner would have to pay the amount that is due if he wishes to save his property from going into foreclosure. In most cases these home owners can do nothing in order to save their house and therefore have to let it go. They know that they will be losing their house and also their credit history and it will take long for them to build it again and be eligible to take any kind of credit. However, they also know that if they sell their house they would still be able to save their credit history being destroyed. When this kind of property sale happens, where the property owner sells his property to save himself from the terror of foreclosure it is known as Pre-Foreclosure Homes. This kind of sale helps the buyer to get the house at very low cost and get immediate possession too. It is important to move in a timely manner, you won’t have much time to think about, you may even have to start working with the mortgage company for a short sale.
SUBJECT-TO – Sometimes these can be done with “NO money down”.
As you talk with and listen to the seller you will know what they are really looking to do and accomplish with the sale. Most of the time they want to cash out/move on. So take the time ask the questions listen to the answers.
Doing “Subject-to’s” is a way to purchase property with no money down by taking over the seller’s mortgage. Many times a seller will want to sell this way if they are going through a foreclosure. This is a quick and easy way to sell their house and it works for both parties involved. The seller gets to sell quickly to avoid a foreclosure and get out of the situation and the buyer (being you) gets to purchase the property with no money, no credit, and no liability. The buyer will take over the mortgage and payments for the time being and immediately put the property on the market for sale in hopes to sell the property for a profit.
Now you might be thinking it doesn’t make sense that a seller would want to do this when they could just sell the property by themselves and make a profit from the transaction. However, this is not true and there are several different scenarios involved that justify the homeowner selling you the property with equity. In many areas of the country we are still experiencing depressed real estate markets. This means it can take months to sell a house. Not to mention many of these houses need some repairs completed to make them marketable. These people cannot afford to make these repairs, or to even clean clutter and garbage out of their house. This is a prime example of why people sell their houses to you using this method. It is a fool proof way for them to get out from under their property.
Becoming Profit Conscious Vs. Rate Conscious
07.16.10
REIC wrote…
From youth onwards, we have all been trained with an inefficient financial paradigm. The conservative way of thinking most of us have been taught, will not yield an exciting retirement. To become financially successful we need to rethink much of what we have learned about money. One financial principle we want to focus on today deals with interest rates. As a society, we have become terribly rate conscious out of fear of consumer debt. As REIC trains consumers how to become investors, one of the issues we strive to overcome is an overly rate conscious mentality.
Here is one of the real estate secrets that can help make you real estate rich: Higher interest rates can make you more money than lower rates. This statement may seem shocking, so let’s look at several examples. As we look at these examples, understand that each of these principles is a critical ingredient in the secret formula for taking people with average credit and average income and leveraging more homes on their credit than any other lending institution could do.
Keep Your Eye on the Profits – Remember, investors keep their eye on the profits. They focus on what they gain by buying a home, as opposed to a consumer, who focuses on the rates and what they lose in acquiring a home. The REIC system will help you acquire many homes, but this cannot happen with the person whose only expectation is getting the best rates, because that reality does not exist for the investor who wants to maximize their portfolio. Do not focus on the 8% interest rate as your loss, but rather the 65% profit as your gain. Remember, the impact on your profit margin between a really good anda really bad interest rate is less than a few percent. Lesson: Keep your eye on the profits!
Each Home Makes you Wealthier – People need to understand a critical piece of knowledge: all banks are not the same, and you must pick banks in a manner that will ensure you can leverage as many homes on your credit (with your job situation) as possible, whether it is 3 homes or 25. The profits from each home you buy increase your net worth by 6 figures. Accordingly, REIC goes to banks that often have steeper rates in order to leverage more homes on your credit. You may have to exchange a 1.5% higher interest rate for an additional $150,000 profit. The issue is not over rates, but rather how many banks are willing to continue lending for your portfolio. Lesson: Don’t go with the banks with the lowest rates but the banks that will let you buy the most real estate.
Cracking the Banking Code – The banking industry is a complicated world that requires specific training and cutting-edge information and updates to stay abreast of all your banking options. One of REIC’s secrets to rapidly acquiring so many homes is dealing with largely unknown facts of how the banking industry works. Banks make a decision whether or not to accept your next purchase based on what mortgages are already on your credit, how quickly they were acquired, what banks they are with, how your file was submitted, and what you are doing with the properties, to just name a few criteria. With our experience, we have learned how to maximize your ability to acquire the most investments possible. Our formula for leveraging several homes on your credit requires us to use banks in specific combinations, so that each additional bank will follow and accept your next investment purchase. As a result, we can buy twice as much real estate if we are not just focusing on the rates, but on which banks we can get to agree to give you your next loan. This often means that REIC will choose a bank with a higher interest rate so that we can already be qualifying for your next homes. Lesson: Paying higher interest rates to particular banks enables us to purchase twice the investment properties, as compared to what we could do if we just went to the banks with the lowest rates.
Selecting the Right Loan – You cannot just go and get “any” loan if you are looking at maximizing your portfolio. If, for example, your goal was to pay the home off over time, and you wanted a 30-year or a 15-year loan to do it, that strategy would cap out very soon and you would qualify for only a fraction of the loans you could with Interest Only loans and ARMs (Adjustable Rate Mortgage). REIC educates its members on the loan process and make sure you are completely comfortable with the loans we suggest. These loans capitalize on the best cash-flows and overall profits for your portfolio. ***Please note most loans closing right now are 30-year fixed because they currently offer the most advantages.
Lesson: Only certain loan programs will allow you to leverage yourself into your maximum financial potential.
What Are You Doing with Your Homes? – Another critical key to buying so many homes with the REIC system is what you are doing with your investment properties. By lease optioning your home, you will collect between $300 and $600 more than you would by simply renting it out. This corrects your DTI (Debt to Income ratio) and brings your personal finance ratios in line so that you continue qualifying for additional homes. Lesson: A well sold lease option is the key to overcoming your financial ratio issues that typically cut your investing short.
Protect Your Future Portfolio – weaving carefully through the banking industry requires a considerable amount of effort and strategy. Doing a loan here or there throughout this process with another lending company, including any refinances of your own homes can quickly unravel your ability to buy as much real estate as possible. Protect your portfolio by keeping your entire lending business to the professionals that have the foresight and the hindsight to see complicated lending issues from afar off. Lesson: Solving and dodging these issues usually happens long before we are faced with a complication.
Summarizing your Profits using these Ingredients – All of these factors add up ultimately to buying more real estate than you could with your old financial paradigm. Consider, for example, the following scenarios comparing someone who is rate conscious to someone who uses our proprietary Financial Formula.
In Scenario A, our client may be able to buy 3 investment properties total, with the combined rates on all three properties of 23% (8% + 7% + 8% = 23%), and a total profit after 5 years of $360,000 ($120,000 + $110,000 + $130,000), or 195% annualized return (65% + 60% + 70% = 195%). This 195% annual ROI (Return on Investment) was created with a total interest rate cost of 23%.
In Scenario B, our same client is able to buy 6 investment properties total, with the combined rate of 52% (8.5% + 8.0% + 8.5% + 9% + 9.5% + 8.5% = 52%), and a total profit of $685,000 ($115,000 + 105,000 + 125,000 + 115,000 + 105,000 + 120,000), or a 355% annualized return (60% + 55% + 65% + 60% + 55% + 60% = 355%). This 355% annual ROI was created with a total interest rate cost of 52%.
In Scenario A, the client may have received some competitive investor interest rates but they led to an outcome of only being able to buy 3 investment homes. In Scenario B we had higher rates, but we were able to create $685,000 of profits compared to $360,000.
Why Having More Homes is Better – Buying more homes is not just about creating more profits. Some of you have goals that extend beyond an extra $500,000 in the next 5 years, and a 5-6 home portfolio. For you, the key to your success lies in creating a powerful portfolio that can attract future partners. Obviously, 6 profoundly profitable homes will have more credibility for attracting partners than 3 homes. These partners have money and credit you will now use on all your future investment deals. You can now participate in real estate with no money out of your pocket and no credit. This portfolio unlocks your ability to thus create unlimited returns and now have limitless financial potential.
Higher Rates = Greater Profits – The take-home lesson for today is that focusing on interest rates can distract you from the more important issues. REIC’s experience has shown that time and time again, people make investment decisions based on rates when they should be focusing on the profits. Remember that you not only have permission, but you should encourage yourself to overlook rates that are 1 or 2 points higher, if it means that you can qualify for even one more home. This is the investor’s financial paradigm, and it will hopefully lead you to extra six-figure profits this year that you might not otherwise have realized.
We wish all our members a great summer, and encourage you to continue working towards all your dreams!
Sincerely,
REIC
Subject-to Deals are you legally liable?
06.30.10
A question that is frequently asked is on a subject-to deal am I legally liable and also is the mortgage interest deductible?
There are some experts that tell us we are not liable for the debt of a ‘subject-to’ deal, well I say “Try telling that to a judge”. The CYA paper work does not release you from liability of the paying the mortgage from the court’s perspective. Just ask the investors that don’t make the mortgage payments after taking deals subject-to the existing mortgage and the was unable to make the payments.
Relying on a document to save your assets is not good enough from the judge or jury’s perspective. Subject-to actually means: “An indication that title to a property includes an obligation of some sort.” The obligation is to informally assume the debt plus any other items like easements, judgments or restrictions.
While the debt is not formally assumed and the lender will not hold you liable, the seller of the home that you took subject-to, may and probably will. Again I say “Just ask those investors or should I say ex-investors that didn’t make the payments”.
If you have followed the news, there are borrowers starting to go after the investors that accepted the obligation to make the payments. Some were tapped on the shoulder by the Attorney General in their state and others received summons to appear in civil court.
Are you unsure if you would be liable? Then buy a house ‘subject to’ and fail to make the payments.
See what happens, more than likely you’ll receive summons for Court or a call from the Attorney General. How does this look to outsiders when you take over a house but fail to make the payments? It appears that you’re assuming their responsibility to pay the mortgage which is correct and you chose not to fulfill your obligation.
There are guru’s with perspective’s that the “lender” cannot foreclose nor collect the debt from you or entity – however, the owner can and more than likely will. Remember you’re the implications of your words, implied intent and how this deal appears to the judge carries the majority of weight. Therefore, if you told the homeowner you would make the payments and then fail to do so, watch out.
Oh, but you say “I didn’t say that. I told the homeowner, ‘I would make your payments before/if/when/maybe/….” It doesn’t matter what you say after that.. the homeowner will only hear, “I’ll make your payments”.
When you buy a property subject2 you are responsible – technically. Do you really think a judge will look at your CYA paperwork and say, “Wait… I see you’re not responsible because of your CYA (Seller’s Disclosure). By the way, that was a well drafted document.” I doubt it.
Yes the homeowner can sue you and take the home back if you don’t make the payments. So YES, you are legally liable. Also you want to be if you’re planning on deducting the Mortgage Interest. Which now brings us to this question…. ”Can you deduct the Mortgage Interest?”
The IRS says:
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You can deduct interest on a debt only if you meet all the following requirements.
1. You are legally liable for that debt.
2. Both you and the lender intend that the debt be repaid.
3. You and the lender have a true debtor-creditor relationship.
Mortgage. Generally, mortgage interest paid or accrued on real estate you own legally or equitably is deductible.
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The Seller could not take the mortgage interest deduct except for the portion they paid while they owned the property. They are not allowed to deduct the interest they didn’t pay.
You are allowed the deduction.
One from Robert Kiyosaki-I read this and wanted to Repost!
06.30.10
I kept this in tacked from an email that was sent out to me so I wanted to repost, his meaning behind this fits along with what we are putting together on this blog. Please read and enjoy.
Do You Have the Poor Man’s Mentality?
Life is about choice. When you were young, choices were made for you. As you grew and matured you learned to make your own choices, a slow, steady process fraught with both joy and frustration. Now it’s time to make one of the most critical decisions of your life: whether to take control of your finances.
As Robert Kiyosaki remembers, “If I had had only one dad, I would have had to accept or reject his advice. Having two dads advising me offered me the choice of contrasting points of view; one of a rich man and one of a poor man.” Before you can change your life, you need to change your mind. Your thoughts and beliefs are deeply ingrained, so deeply ingrained that you may not even be aware of how much they’ve shaped your financial woes. One of the reasons the rich get richer, the poor get poorer, and the middle class struggles in debt is because the subject of money is taught at home, not in school.
Recently, Will Smith and Jada Pinkett Smith (both successful actors) appeared on Oprah’s TV show. As a part of their visit, they shared the importance of teaching their children financial education and how they have used the Rich Dad Poor Dad book to teach them the “rich mindset”. According to Will, “I still have a poor person’s mentality. I can’t shake it and it gets really detrimental when you can’t just shake off the ideas … With my kids, I want them to be able to have the financial comprehension to not be slaves to working and money that way that my mind has.” To read excerpts from the interview, please click here.
Rich Dad Poor Dad has helped millions of people change their mindset about money. If you haven’t had a chance to experience it, click here to listen to the first two chapters.
Rich Dad Tip:
“All of us have the power of choice. I choose to be rich, and I make that choice every day.”
