Not sure where to park your money? Follow Kiyosaki

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Jun 09 2008
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Robert Kiyosaki is the name synonym with personal-finance and has attracted millions of followers. His flagship product was definitely “Rich Dad, Poor Dad” book that has taken the world by storm. His other books titled “Rich Dad’s CASHFLOW Quadrant” and “Rich Dad’s Guide to Investing” was equally good and hits the top 10 best-sellers. The fourth generation Japanese American also made his fortune from “Cashflow” boardgames and series of audio cassettes. His most famous trademark was probably the “Cashflow Quadrant”, a conceptual diagram entails four groupings of people earning their money – “E”mployee, “S”elf-employed, “B”usiness owner and “I”nvestor.


Robert also partnered with billionaire Donald Trump on a book – Why We Want You to be Rich in late 2006. So what has this Robert been doing lately as far as investment is concerned? It appeared he is still buying into real estate despite the sub-prime crisis simply because he bought for cash flow and not for capital gains. He maintained that he’s still particular about location though – with increasing populations and job opportunities. Most importantly he only invests in places he is familiar and not any foreign real estate.

There’s one thing that Robert highlighted regarding saving money which you should take note. With the dollar basically flushing down the toilet, it’s no longer accurate to tell your kids to “save money” because that would be telling the children to “save currency” which is equivalent to keeping depreciating dollar. Instead of buying certain currency, Robert Kiyosaki hedges against dollar by buying basket of Asian currencies through ETFs such as iShares MSCI Singapore Index Fund (NYSE: EWS) or iShares MSCI Malaysia Index Fund (NYSE: EWM).

At first I thought Robert’s only forte was in property investment and probably investing certain property-stocks but he really knows what to invest. He mentioned his favorites are gold, silver and oil via ETFs. You can basically get exposed to such commodities via ETFs such as SPDR Gold Shares (NYSE: GLD) or iShares Silver Trust (AMEX: SLV). Robert has even venture into commodities business in a copper-mining company in Vancouver. And guess what, Robert Kiyosaki loves Apple Inc. (Nasdaq: AAPL, stock) stock but not because he was hooked to iPhone. Rather it was Steve Jobs whom he likes.

So, if you’ve tons of money and do not know where to invest, you might just want to follow your favorite books’ author. However there’re rumors and grumblings that Robert created the fictitious character of “Rich Dad”. Kiyosaki had stated in his books that Rich Dad had died in 1994 but some have claimed that Rich Dad was a person named Richard Kimi, the deceased founder of Sand and Seaside Hawaiian Hotels.

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Yes, more and more people are joining hard asset camp. However newbies need to prepare for volatility because of conflicting claims by hard asset bears and bulls. For example, Fed has “SAID/IMPLIED” interest rate will be increased to fight inflation on 9/6/08. It seems logical. However higher inflation and higher interest rate will induce recession. Do you think voters will keep quiet and let Fed increases interest rate? Due to ultra short memory span of market, a lot of people will sell paper hard assets which create selling pressue. Then, after a few weeks/months, positive factors for hard assets will emerge, e.g. negative interest rate, geopolitical risks, relative smaller supply. Thus the volatility.

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