Real Estate Investor Magazine South Africa August 2015

REIM EXCLUSIVE! predicts market crashes in 2016, 2017 and 2018. He says that people must prepare themselves to seize the opportunities. South Africa’s offshore talent pool Elon Musk technology billionaire and entrepreneur is one of South Africa’s most prized entrepreneurs who have been lost to South Africa. He has built himself a multi-billion dollar fortune running companies that make electric cars, sells solar panels and that launches rockets into space. What many people don’t know is that he has achieved that success with almost $5 billion in government subsidies. Clearly he goes where there is government “Intelligence solves problems & produces money.Money without financial intelligence is money soon gone.” money and the US unlike SA’s put their entrepreneurs on a pedestal. Why don’t they teach us about money at school? Kiyoskai emphasizes the importance of having the right financial education to help you succeed in any economy which is critical to thrive and survive. He says if applied properly it can be life changing and liberating for your investments, business and personal life. Kiyosaki shares some of his inside secrets for his investment success and why he still believes in real estate as a prime investment category. Kiyosaki says that capitalist education systems are commandeered to educate people www.reimag.co.za in the old way so that they can be reliant on the government to continually pay taxes to them for the rest of their lives. The first lesson of money is ‘The rich don’t work for money,’ the rich have money work for them. The second lesson is ‘Become financially literate’ focus on assets. Assets include owning a business, real estate, paper assets and commodities such as gold, silver, food, water. Your house you live in is not an asset Kiyosaki says that your house that you live in is not an asset even if the mortgage bond is paid off on the house. You are still liable for rates, taxes, and utilities such as electricity, sewerage, insurance and maintenance. Each person needs to determine whether buying or renting is best for him or her at any age is the best choice for him or her. It could become an asset if you sell it for more than what you owe on it then it that becomes capital gains play and falls into speculation and not investing. Renting or buying is neither right nor wrong but is rather what is best for you. Why real estate is the cornerstone of Kiyosaki’s investment strategy and why he continues to invest in real estate Kiyosaki learnt the real estate game playing Monopoly and the acquiring of 4 green houses to purchase one red hotel is something he has applied in his personal real estate investment strategy. HE SAYS THAT REAL ESTATE GIVES YOU THE ABILITY TO: 1. Use debt to acquire and finance properties 2. Pay little or no tax 3. Be a passive income generator He says that while banks have a complete self interest that they will give you the finance that you want provided that you know what you are doing. He points to recently getting $500 million refinancing on 120 properties for 20 years at 5%. KIYOSAKI’S ADVICE TO RAISE FINANCE FOR INVESTING: 1. You make money when you buy a property on a distressed sale, under valued, badly managed or change the use of the property not when you sell the property 2. You acquire the property by leveraging your cash deposit through multiple partners say friends, family who also can’t raise a deposit and a loan 3. Have a clear exit strategy and strong agreements in place 4. You use the banks money to mitigate the risk and show the banker the plan for the property, why it is undervalued or mismanaged and the cash flows which must be positive from the tenants rent 5. It must deliver a steady cash flow of income 6. Share your previous loans and credit record to bank as they will investigate that anyway KIYOSAKI’S SUCCESS PRINCIPLES TO USE 1. Who is on your team? Hang out with people smarter than you. If you are the smartest person in your team then you are in trouble. Accountants are there to help you pay no taxes. The wealthy don’t pay tax. 2. We all make mistakes and that it makes you aware. Meditate or pray or whatever to forgive yourself to move on but don’t give up. 3. You need to take control of your financial statement – understand the rules of the game from the tax breaks, the finances and the deal AUGUST 2015 SA Real Estate Investor 19

Real Estate Investor Magazine South Africa August 2015 | Page 21