Conspiracy of The Rich blog : Learn with Rich Dad Robert Kiyosaki how to Survive and thrive in today's economy, how to build assets, how to save money and increase your financial success, how to invest wisely and how to plan your path to financial achievement

Saturday, October 2, 2010

Interest rates working for you or against you ?

According to Robert Kiyosaki, author of Rich Dad, Poor Dad, the principle difference between rich people and poor people is that rich people have interest rates that work for them — making them money — and poor people have interest rates that work against them — costing them money.
In more detail, rich people make purchases up front rather than using credit or accepting long-term contracts like mortgages or car payments, and they own financial instruments or businesses that make money on their own over time. Poor people need the basics, such as a vehicle and a place to live, and they purchase those things using long-term contracts that end up costing them more, in the long run, than the initial price of the item. When they don’t have enough money to pay an outstanding bill, their only option besides losing access to something vital like hot water or their car is to use credit — which means more debt automatically piling on every month.