'Rich Dad' Robert Kiyosaki spreads property investment message in Australia
Robert Kiyosaki, investor and author of the international bestseller Rich Dad Poor Dad, is holding workshops on investing for Sydney attendees.
Kiyosaki has previously suggested investors to avoid the Australian property market as it was a bubble that was about to burst.
This seminar series suggests strategies for investment in any economic scenario.
The author told Fairfax Media in 2014 that foreign investment in Australian real estate was spiking domestic prices and forcing local buyers to pay well above the true market price.
"Foreign investors are queuing up to buy anything they can get their hands on. This is causing average Australian punters to think they need to start buying now. It has created a bubble," Kiyosaki was quoted as saying.
"It's pretty bad when the Australian property market is making news all over the world."
In fact, he advised Australians to invest in gold or oil, where prices were falling.
Starting his property investing with a tiny one bedroom/one bath condominium on the island of Maui in 1973 for $18,000, Kiyosaki claimed in 2011 that he owned more than 1,400 apartments.
He built a substantial part of his portfolio during the property downturn of 2007.
Kiyosaki says he does not invest in real estate "just to own real estate...The primary reason I invest in real estate is to leverage debt and minimize taxes".
His book Rich Dad, Poor Dad has sold more than 26 million copies worldwide.
Kiyoski’s Rich DadEducation runs workshops and mentoring in real estate and other financial instruments in the United States, Canada, the UK and many other countries including Australia.
A previous article in Limitless Real Estate featured three important tips Kiyosaki which, according to the author were dead on target for Australian property investors.
1. ADAPT TO CIRCUMSTANCES.
“If you are a true investor, it does not matter if the markets are going up or coming down. A true investor does well in any market conditions,” says Kiyosaki.
When it’s booming they may use their equity to invest in up and coming areas.
When it’s slow they may focus on cashflow positive properties to continue growing their wealth.
And when it’s dropping they grab the opportunity to snap up bargains.
2. UNDERSTAND THE DIFFERENCE BETWEEN ASSETS AND LIABILITIES.
“Understand the difference between an asset or a liability. An asset puts money in your pocket. A liability takes money out of it. Buy assets, not liabilities.”
One of his favourite quotes is “keeping up with the Joneses”.
It means spending money to appear wealthy even if you can’t afford it.
“People think that working hard for money and then buying things that make them look rich will make them rich. In most cases it doesn’t. It only makes them more tired…And if you notice, the Joneses are exhausted.”
3. MOST PEOPLE HAVE NOT LEARNT HOW TO RECOGNISE OPPORTUNITIES OR HOW TO CREATE THEM.
“Most people never get wealthy simply because they are not trained financially to recognise opportunities in front of them. The rich have learned how to recognise opportunities as well as how to create them.”
Recognising that things change and being ahead of the curve is important, he says.
Kiyosaki says he has stuck to his formula for owning property, which uses a series of rolling-equity refinances and government tax incentives, plus debt rather than his “hard-earned” after-tax dollars for the purchase.
The formula is:
- Acquire undervalued property.
- Improve the property.
- Raise rents.
- Increase NOI (Net Operating Income).
- Refinance—taking out cash, tax-free.
- Reduce taxes using fundamental accounting principles, of amortization, appreciation, depreciation, and component depreciation.