Monday, January 29, 2007

Why the rich get richer???

From Robert Kiyosaki Why the Rich Get Richer

"Fight Debt with Debt

Whenever anyone asks me how to solve the credit card problem, I tell them to fight fire with fire -- and debt with debt. The way I solve my increasing needs for cash is to go deeper into debt -- good debt, not bad debt.

For example, I use debt -- which is essentially tax-free money -- to invest in real estate, which in turn increases my cash flow. Not only do I not pay taxes on my debt, I could also pay no taxes (or very little in taxes) on the income from the debt. Hence I earn more but pay less in taxes.

Obviously, in order to do this you need to know how to use debt wisely and responsibly, and must be able to find great investments that increase cash flow."

Ok, I get how this works, I understand the principle, however I am lost as to how to begin!!! We have looked into traditional mortgages, hard money lenders, etc. We live in NY which is apparently opposed to anyone else making any money here, they have capped the amount of interest that can be collected on a hard money loan, therefore it is unattractive to lend money here (they could get almost twice the interest rates elsewhere...). Not that I am about paying interest I just don't have the capital to start.

Sure, if I could be homeless & not putting any money into utilities, expenses, maintenance, etc. I'd have a lot more a month left in the bank account. Of course there wouldn't be a pay check, cuz I'm pretty sure dh wouldn't be able to work (unless we invaded McDonalds & used their wi-fi...hmmm. That may not be viable with 2 kids though...) So we wouldn't have a paycheck from that either. We are trying to grow our existing ice cream shop (we lost our 1st store due to loss of lease. New owner wanted something more compatible with a photo studio) Our 2nd store had a terrible start last year, high gas prices kept people home. So we are hoping our 3rd year in business will turn us around. Of course we are much smarter now than when we started :D. (~hehehehehe~)

I guess there can't be a cut & dry answer here, if it were easy everyone would do it, right?

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