| Robert Kiyosaki's Rich Dad, Poor Dad series of | | | | "bad debt" in two ways. The most obvious way, |
| real estate investing books focuses on getting | | | | of course, is to increase the amount paid on the |
| people to consider whether they aught to be | | | | principal annually, or even monthly, by making |
| spending money on a specific investment | | | | more payments. It's wise to research ahead of |
| property or not. A good deal, according to Mr. | | | | time, however, that your mortgage does not |
| Kiyosaki, is one that will provide the investor with | | | | stipulate forfeiture for paying early. It's even |
| a return on the investment relatively quickly. A | | | | smarter for the individual who is thinking about |
| strong investment is one in which there is not a | | | | getting a loan, to make sure that it does not have |
| ton of money up front, like as repairs, to cut into | | | | a stipulation like this prior to signing it in the first |
| the income from the rent. | | | | place. |
| A lot of people believe that their house is an | | | | Another way to reduce bad debt and increase |
| asset, but it isn't. Because there is little or no cash | | | | equity is by turning a 30-year loan into a 15-year |
| to be earned from most dwellings, most | | | | loan by refinancing it. This means that the |
| residences are liabilities. For that reason, the | | | | homeowner is paying less interest over time, but |
| mortgage one gets to buy a house is considered | | | | forking out extra per month. If she can afford to |
| what Robert Kiyosaki calls "bad debt". There is no | | | | do that, it is a great way to increase your equity. |
| cash flow. There is only expense. | | | | Making extra payments will take only 1/2 as much |
| "Bad debt" (and liability) is considered undesirable | | | | time off the total time to pay the mortgage as |
| to investors, especially since the ownership of a | | | | refinancing will. |
| house is a misconception. The home owner | | | | Reading the Rich Dad, Poor Dad book series |
| assumes that she owns a house, just because | | | | explains to the reader that it is a good idea to |
| she is paying for the right to live in it. On the | | | | study as much as possible about the transaction |
| other hand, if he were to stop paying for that | | | | of purchasing and paying for investment property, |
| privilege, the bank would foreclose and he would | | | | because those who stand to benefit from the |
| be kicked out into the street. | | | | buyer's ignorance will typically not volunteer |
| What she owns in reality is equity, and home | | | | information. There are ways around spending your |
| equity is just a bunch of numbers. However, | | | | entire existence paying for a single piece of real |
| acquire enough equity and it will become a deed | | | | estate. Considering at the process of purchasing a |
| of ownership. Better yet, it will make the "bad | | | | home, not as a resident, but as a real estate |
| debt" go bye-bye. | | | | investor, will make it obvious that most people |
| When one increases equity, he decreases | | | | spend far more cash than they have to, just |
| undesirable debt. "Bad debt" costs you money. | | | | because they don't know any better. Knowledge |
| Decreasing bad debt is good. | | | | is the home owner's greatest asset. |
| As a homeowner, we can decrease this type of | | | | |