Don’t think of Kim Kiyosaki as just the wife of successful investor and well known author Robert Kiyosaki, who wrote the self-help bestseller Rich Dad, Poor Dad. Kim is a successful investor in he own right and she started off with one rental property. Twenty years ago, Kim Kiyosaki invested in her first rental apartment in her home state of Arizona. From that, she’s grown a property investment portfolio that’s made her rich. Now, Kim wants women to focus on getting the financial education and skills to invest profitably. And she says now is the perfect time to learn.
Kim Kiyosaki
Kim said that in today’s world, we cannot allow ourselves to be so ignorant that we blindly follow greed-based sales pitches disguised as ‘advice’ because ignorance is not bliss, it’s foolish, expansive and painful. She also wants us to get back to the fundamental of investing. “Recently, too many people ignored the basics of sound investment. They went off on a tangent of day trading, derivatives and the latest hot deals without knowing what they were buying.”
Take property: Eighteen months ago, the property market was red hot. These days, it’s more stagnant. So, if you bought an expensive condominium to rent to wealthy expatriates, you’re in risky position. In the rental real-estate market, there are three classes of properties – A,B and C. The A properties are luxury rentals. B are middle-of-the-road, mid-range and C are low-rent units. Kim says that she focuses on B properties because if there’s a downturn in the market, people move from A to B properties in search of lower rents. She stays away from the C properties because they can be a management nightmare.
Kim’s secrets for real estate successes are simple:
· The property has to earn its keep from Day One. It must have cash flow the day you buy it or you must know how to get it to cash flow quickly.
· At the end of each month, collect rents, pay expenses and the mortgage.
· Buy multiple units because if you have a single unit and your tenant moves out, so does your income.
· Set up a reserve account each month to cover unexpected costs like an empty unit or repairs. The property has to be properly maintained.
Kim’s 5 rules for Investment
1. Increase your financial education. The greater it is, the lower your risk and the greater your returns. It’s that simple.
2. Look at the fundamentals of an investment. If you’re purchasing stock, is the company solid? If you’re buying an investment property, do the income, expenses and debt generate positive cash flow?
3. Are you making decisions based on facts or opinions? A fact is: “3 years on property X, I have records of three years cash flow and know how well that property is performing. “ While an opinion is: “Rent are going up all over. I’ll probably get a great cash flow on this property.”
4. The difference between cash flow and capital gains. The average capital gains investor only makes money when markets are going up, and sells the investment. A cash flow investor makes money every month if he/she manage the investment made wisely.
5. Invest time first, money second. First invest your time to research and understand any investment you are considering.
