Many people have read the various books in the Rich Dad, Poor Dad series of self-help books by Robert Kiyosaki. We've heard from people who love his work, and also from people who think he's an idiot. While we don't agree with everything he says, there is one element of truth to his books that is hard to ignore (because he repeats it so often):
"Fill your life with things that put money in your pocket every month."
He defines the above category of possessions as "assets" (which we do not agree with -- check your local dictionary). But the advice is still sound. If you are currently working for a living, you should set aside as much money as you can and invest it in things that produce a profit every month without you actually doing any work (known as "passive income").
Eventually, if you keep doing that, you will be at a point where you don't need to work for a living anymore. You sit back one day and realize that you can thrive just on the amount of money that is coming in every month from your "passive" investments. And that's the day you officially retire from the rat race. But that begs the question, "What passive investments does Robert Kiyosaki recommend?"
Most people who have read the Rich Dad, Poor Dad books don't actually know. He never seems to come right out and tell you to invest in anything specific, although most readers probably get the idea that he leans towards real estate investments.
There's only one problem with that, which is the acquisition stage. Buying rental property is a difficult thing to do, even if you are a student of various "no money down" types of real estate schools or creative real estate financing. You will soon discover that most of the "no money down" real estate schemes focus on acquiring real estate with owner financing. The theory is that you acquire it with owner financing, wait a year or two for the value of the property to go up, and then sell it for a profit or refinance it at better rates. All the while you are renting it to someone who is paying the monthly bill for you.
That's fine except for one thing -- "no money down" real estate schemes only work when the value of the property goes up. What happens if it goes down? Basically, you lose your shirt because most of the "no money down" real estate schemes leave you in a precarious position financially for the first few years. If you are teetering on the edge of bankruptcy and things don't work out the way you planned, it's easy to tip over. But there is an alternative to this mess.
