Kim Kiyosaki, author of Rich Woman: A Book on Investing for Women, began her career as a real estate investor in 1989 after launching her first business with her husband, Robert Kiyosaki, the author of the bestselling Rich Dad, Poor Dad series. Today, Kim controls millions of dollars of investment property and teaches women how to achieve financial freedom through investing and taking control of their financial futures. We recently spoke with her to get her insight and advice on the importance of taking charge of your money--and your life.
Rosalind Resnick: Given your own success in building companies and buying real estate, why do you think that so many women are still afraid to take business risks?
Kim Kiyosaki: I think part of it is that so many of us haven't been educated about investing and haven't really been expected to be the ones handling the money. Being risk averse is not necessarily a detriment unless it's to the point where you become so afraid of risk that you do nothing. What I've found over the years is that the way I grow and the way I learn is by placing myself in situations where I have to face something I'm not familiar with or to break through a fear. I want to create a movement throughout the world to teach other women to put [my principles] into practice and become financially independent.
Resnick: Most women know how risky it is to depend on a man for financial support, yet millions of women continue to hope that their husbands will take care of them. Looking back on your own experiences growing up, what was the turning point that transformed you into the financial risk taker you are today?
Kiyosaki: I've always been very independent. When I was 14 years old, I came home one day and my mother was sitting with her girlfriend in the dining room, and my mom's girlfriend was crying, very upset. I was ushered out quietly, but I stayed in the other room and overheard the conversation. This woman was saying that her husband had left her for another woman and how horrible it was, but when my mom asked, "Did you know? Did you have an idea?" she said that yes, she did have an idea but that, even though the marriage wasn't working, at least she was financially taken care of. And I just remember thinking, "Why would anyone want such a miserable life?" I think so many of us women still have this idea that Prince Charming is going to take care of us. With one out of two marriages ending in divorce nowadays, that's just not the case any more.
Resnick: One of the challenges that women entrepreneurs continue to face is lack of capital. What advice do you have for women who want to start businesses or buy properties but have little access to cash or credit?
Kiyosaki: For every business that I've ever started--and I've started them all with my husband--we had no money. There's this idea that you have to have a lot of money to build a business or you have to have a lot of money to invest. I don't subscribe to that. Borders bookstore started in a garage. Apple Computer started in a garage. None of those companies was highly financed. When it comes to property, Robert and I were broke for quite a while. We were homeless for a short period of time when we were building our businesses. But when it came to investments, we didn't have money, either. My very first investment was a little two-bedroom, two-bath house in Portland, Oregon, and I needed a $5,000 down payment and I didn't have it--but I found a way to get it. But the thing I'd say about investing, especially about real estate investing, is to find the investment first because then it's a tangible thing. Otherwise, it's just talk. Once you find the investment, it becomes real to you. Then you can figure out how to find the money.
Resnick: Another challenge for women entrepreneurs is balancing work and family. What advice do you have for women who don't have the time to invest in a business venture?
Kiyosaki: Let's say you've got a full-time career and you've got a family. At the end of the day, the last thing you want to do is go look at property. You've got to somehow make that a priority. I think that every woman has their own business called, "Managing and Growing Your Money." And it has to be looked at as a business, not just a thing to do to pay the bills. A lot of women business owners say, "I've got a business, and it's doing well, so why do I need to invest?" I would bet you that every businesswoman out there has said to herself at some point, "I'd love to shut it down. I'd love to not have to go to work today." Eventually, you're going to get tired. You're going to want to take a break. By creating that income stream, you have a choice.
Resnick: In your book, Rich Woman, you talk extensively about leverage -- that is, the power of debt financing to increase an investor's returns. What do see as the pros and cons of financing real estate and other investments with borrowed money?
Kiyosaki: I see leverage as a plus as long as you know what you're doing, as long as you understand the numbers of the deal. With real estate, you can put down 10 to 20 percent and own 100 percent of the property. Now, if you manage the property well, you'll have a nice, positive cash flow. The con is what I call "the flipper"--when you buy the property with the sole intention of turning around and selling it for a profit. If the market turns, as it's doing right now, people are finding themselves stuck. If the market doesn't go up and they don't have a renter, now they're stuck and they've got this big mortgage payment that they've got to make every month. If you're buying to buy and hold, then the fluctuations of the market don't affect you as much.
Resnick: You say in your book that your husband, Robert Kiyosaki, the author of the Rich Dad, Poor Dad books, has been very supportive of your investing activities. What advice do you have for women whose spouses are less supportive?
Kiyosaki: I've talked to a lot of women about that, and when I asked about it. I got answers ranging from, "Dump him!" to "Learn how to work together!" But, ideally, if you can do it with your spouse or your partner, you're going to be more successful and you're going to get a greater return on your money. For those women whose husbands aren't supportive, the best advice I can give is to start, just start. Don't not do it because he's not interested. Because once you start and once he sees how interested you are and once he sees the cash flow coming in, often he'll jump in and say, "Let's do it together!"
Resnick: Every woman who seeks financial freedom through starting a business or buying a piece of real estate has to start somewhere. What's the first step that you'd advise a woman to take?
Kiyosaki: Number one, whether it's business or investing, is education. If you're starting a business, get some education about the business you want to start. Talk to mentors, talk to people who are doing what you want to be doing. Read up on it, attend seminars, go to speaking events. There are some great organizations that are supportive of women in business. If you can hook up with them, fantastic! There are also some great investment organizations. Hang around people who are going to support your ideas, support you in what you want to be doing. Don't hang around with negative people, people who say it's never going to work, that you're crazy, that it's too risky. Get those people out of your life.
Rosalind Resnick is the founder and CEO of Axxess Business Consulting, a New York City consulting firm that advises startups and small businesses. She can be reached through her website [http://www.abcbizhelp.com]