Book Review Increase Your Financial IQ – Part 2 – Protect Your Money

Once you’ve learned how to solve problems and make some money, the next thing you need to do is protect that money from what Robert Kiyosaki calls “financial predators.” Real-world predators don’t always look good. Sometimes they are ordinary people with good intentions. Your job is to “legally” take money out of their pocket… and your job is to “legally” make them take as little as possible.

According to the book, there are 7 financial predators you need to protect your money from. Is it so:

  1. bureaucrats who legally takes money from you through “tax”
  • Taxes are your biggest expense
  • Know what kind of income you’re making money on and paying taxes on
    • Earned income: salary, commission, etc.
    • Portfolio income: income from paper assets such as interest, dividends, etc.
    • Passive income: royalties, real estate rental income, licenses, etc.
  • bankers who legally takes money from you through “fairies”

    • Banks and credit card companies charge you all kinds of fees, some of which neither you nor your company may know about.
    • For every dollar you have in the bank, the bank can lend twenty dollars to your credit card. The bank pays you 5 percent for one dollar and earns 20 percent for twenty dollars. This is how banks make money.
  • runners who legally takes money from you through “commission”
    • Look for brokers who are students of your profession and invest in what they sell
      • For real estate brokers, ask them how many properties they are invested in.
      • For stockbrokers, ask them what stocks they personally invest in.
    • “Good” brokers make you rich, “bad” brokers make you poor. Build a relationship with “good” brokers.
  • Business who legally takes money from you through “profit”
    • Buy products that make you rich
    • The poor buy products that impoverish them, paying for them for years with a very high interest rate
  • brides and grooms who legally takes money from you through “division of alimony/marital property”
    • Get a prenuptial agreement before you get married
    • Think about your exit plan before entering the deal
  • Brothers in law who legally takes money from you through “inheritance or financial desires”
    • Consult an estate planning specialist to plan your exit
    • Use legal vehicles like wills and trusts to protect your estate from the predators of death
  • lawyers who legally takes money from you through “judicial and judicial taxes”
    • Have assets of value in legal entities instead of your own name
    • You must buy insurance prior to you need it… not at the time you need it.

    rich money habits
    Review Notes:

    • Protecting your money is like plugging holes. You first need to know what the holes are before you can plan to fix them to stop the cash from flowing.
    • Learning to protect your money is a never-ending process as the rules change periodically. Ways to protect your money yesterday may no longer be able to protect your money today or tomorrow.
    • Protecting your money reduces your expenses. The more money you keep, the more money you can use for productive activities.

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