Rich dad poor dad

[Dick Dastardly]

okgo said:

Anyone else read it?

I have and I've found it interesting, and I especially liked the part about buying assets rather than liability. However I did find it a bit odd that he called property a liability in one chapter (which it could be in many cases) and then goes on to say that his empire is built on real estate?

Is that not because your own home is a liability, as it costs you money, but investment properties are assets, as they earn for you? I think that's what he meant.

It's a great book and I was very fortunate to read it in my teens where it had a big impact on how I spent my money. I invested in property very young and whilst my friends were renting/buying flats and new cars, I pumped my cash into a few houses, fortunately just before the property boom. That decision has been life changing and means I've got a decent residual income no matter what, which makes a huge difference to the options I have (such as starting a business a few years ago).

IMO they should teach this way of thinking to kids in school. The very simple ethos of view everything as either an asset or a liability is one of the best things to appreciate and would help this country get out of this short term borrowing culture we are now lumbered with.

[Ginge R]

Dick Dastardly said:

IMO they should teach this way of thinking to kids in school.

Isn't it a sad comment that we don't trust parents to do this any more? Reality is, most parents, post 1980s, are more profligate than their kids. Ironic too, that we entrust it to the state which is the hardly a model of credibility.

[Petrus1983]

okgo said:

Any recommendations on other books would be welcome, I've got some time to kill while flying!!

I liked Rich dad, Poor dad and went on to read the 4 Hour Work Week which I also liked a lot. Whilst actually achieving it isn't that viable, it does raise some interesting questions/calculations as to why people work as much as they do.

I haven't read it for a while but remember one chapter that looked into why we perceive people who say "I work 50 hours a week" as outstanding workers, whereas they may just be crap at their job and someone else could have done it in 25 hours!

[Hoofy]

okgo said:

Anyone else read it?

I have and I've found it interesting, and I especially liked the part about buying assets rather than liability. However I did find it a bit odd that he called property a liability in one chapter (which it could be in many cases) and then goes on to say that his empire is built on real estate?

Any recommendations on other books would be welcome, I've got some time to kill while flying!!

Sounds like you could do with reading it again. As others have said, your home is a liability as it doesn't earn you money plus you have to fix it. Let properties are assets because they (in theory) can generate money.

I think the problem is that nowadays you need a fair bit more to make a house an asset simply because they are so expensive these days. If you only have £10k savings, then (from memory) RDPD isn't really useful, although it does make you think about not buying ste. I read his other book on shares and it seemed to be nothing new.

[otolith]

If you own a house, you could rent it to yourself and use the money to pay the rent

If your equity in the house is worth more than you could buy an adequate house for you will gain capital appreciation but no revenue, though you will have paid interest in obtaining it.

It's probably healthier to think of a house as a home.

[dirty boy]

FreeLitres said:

millionaires

Lived in a very modest house in an average estate
Wore a £100 Seiko watch (not Rolex/JLC/etc.)
Drove an old car bought with cash, etc.

Sums up my in-laws perfectly. Driving a 14 year old Megane (garaged every night on 70k) living in the same 3 bed detached house on a boggo Persimmon estate for the last 30+ years.

A meal out for them is a Sunday lunch in 'Howards' where a roast will set you back around £3.75 ! That's why they're considerably richer than us. (non resident oil & gas worker for most of his life, he's 63 and still working, manager for African operations)

I think he's scared of retiring and not accumulating more wealth.

[Zanderman]

Sounds like my inlaws as well!

And when they look back on their lives will they wonder what the fk was the point?

dirty boy said:

Sums up my in-laws perfectly. Driving a 14 year old Megane (garaged every night on 70k) living in the same 3 bed detached house on a boggo Persimmon estate for the last 30+ years.

A meal out for them is a Sunday lunch in 'Howards' where a roast will set you back around £3.75 ! That's why they're considerably richer than us. (non resident oil & gas worker for most of his life, he's 63 and still working, manager for African operations)

I think he's scared of retiring and not accumulating more wealth.

[TheLordJohn]

Read it rather a few times, and 5 or 6 others written/co-written by Kiyosaki.
Did anyone see they have some RDPD UK workshops planned soon?

[droopsnoot]

I have read that the basic workshops place a lot of emphasis on trying to persuade attendees to sign up to more detailed, more expensive training courses. Obviously you've got to keep in mind people's tendency to only post negative experiences, though a thread on MSE that I read does have some posts from people who attended and made good use of the information.

[Otispunkmeyer]

Is the book actually worth checking out? I have read some rather uninspiring reviews of that book in particular, and one in particular who seemed to have some kind of vendetta against the author! I can't find it now though.

Also a quick google shows a news article saying the guy himself (or one of his companies) filed for bankruptcy in 2012 after losing circa $24m.

EDIT: The review: http://www.johntreed.com/Kiyosaki.html

its quite entertaining in places. But I can't don't really know if he speaks the truth anymore than a self help book would. These two reviews seem more balanced:

http://www.slate.com/articles/arts/number_1/2002/0...

http://investorjunkie.com/11194/rich-dad-poor-dad-...

http://www.thesimpledollar.com/review-rich-dad-poo...

Edited by Otispunkmeyer on Friday 17th October 15:57

[MrSparks]

I read the book whilst I was on holiday (ironically in Monaco!) I thought it was really good, as with any "self help" style book I only really picked bits out of it and don't really believe it word for word.

The general principle does make sense, don't live beyond your means, increase your "assets" and increase your "lifestyle" in accordance. You can still have all the "good things", it's not really one of those books that tries to make you live like a monk for your whole life so you can have millions in the bank. The book doesn't really imply that the "poor" man is "poor", he earns a good wage, has a good job, but also has a lot of bills etc. The rich dad has the nice car etc but he has 2 properties making an income to pay for that car thus increasing his incomes as he increases his outgoings.

I can relate to it quite well if I'm honest as my dad is spending his whole life living way beyond his means and he's "trapped' he has a big house (big mortgage) one business (which has been struggling for past few years) and a whole lot of debt. He's now 52 and wants to semi-retire but is a long way off being able to afford it. Whereas my sisters boyfriends dad doesn't have any assets but he has no debts, has plenty of money each month, lives in Antibes and can do whatever he wants really. Not quite the aim of Rich Dad Poor Dad but if you compare the two "lifestyles" well I know which one I'd prefer.

I had been chasing things I couldn't afford, ran up debts trying to renovate my house sooner than I had money to do so, didn't stop spending on the usual stuff, meals out etc etc so found myself fairly trapped with my current wage and lots of things to pay for each month. Since reading the book (and another issue that arose lately which made me consider this even more) I've been working on paying the debt off (60% reduced so far, on target to pay off by end of this year) and I'm building up my "semi-passive" internet business income to a point where I can either seek someone to run it, sell it, or partner up etc. At the minute my target is just to get it paying the bills each month (almost there) leaving my main income to be for whatever else I choose.

I'm young, 29... having seen both sides of the "rich dad, poor dad" in real life I can definitely say that it's made me think, I would rather a £300k house paid off when I'm 50 than a £1m house that I'm still paying loads for leaving me able to do whatever I want. Whilst I'm not going to live like a monk by any means, and I have high materialistic aspirations, I am going to be working on paying down the mortgage, building passive incomes (not sure what else I'll look at after the internet business yet) which will hopefully leave my main income free for fun things.

[Pulse]

otolith said:

FreeLitres said:

In the book they analysed what most millionaires are like. The majority of them;

Lived in a very modest house in an average estate
Wore a £100 Seiko watch (not Rolex/JLC/etc.)
Drove an old car bought with cash, etc.

It'a obvious, but spend less than you earn and you start accumulating wealth.

But to what end?

The most poignant question in the entire thread.

[grumbledoak]

Otispunkmeyer said:

Is the book actually worth checking out?

Quite simply, yes. Not so sure of the benefit of the other books and seminars etc., but the first book will help you see your own finances much more clearly than most people ever do.

[Bebee]

PAW or an UAW, which one are you?

http://en.wikipedia.org/wiki/The_Millionaire_Next_...

[SpeckledJim]

Pulse said:

otolith said:

FreeLitres said:

In the book they analysed what most millionaires are like. The majority of them;

Lived in a very modest house in an average estate
Wore a £100 Seiko watch (not Rolex/JLC/etc.)
Drove an old car bought with cash, etc.

It'a obvious, but spend less than you earn and you start accumulating wealth.

But to what end?

The most poignant question in the entire thread.

Working so hard that the only time you have to enjoy the nice car your hard work bought is when you're driving it to and from work is daft.

The holy grail is a secure (very) early retirement.

Slogging away at a job you don't enjoy into your 60's to pay for the 3rd Mercedes is daft. Your life is running out, and an extra Mercedes doesn't really improve things.

Time is of the essence. Work to buy time, not things.

[FreeLitres]

SpeckledJim said:

Pulse said:

otolith said:

FreeLitres said:

In the book they analysed what most millionaires are like. The majority of them;

Lived in a very modest house in an average estate
Wore a £100 Seiko watch (not Rolex/JLC/etc.)
Drove an old car bought with cash, etc.

It'a obvious, but spend less than you earn and you start accumulating wealth.

But to what end?

The most poignant question in the entire thread.

Working so hard that the only time you have to enjoy the nice car your hard work bought is when you're driving it to and from work is daft.

The holy grail is a secure (very) early retirement.

Slogging away at a job you don't enjoy into your 60's to pay for the 3rd Mercedes is daft. Your life is running out, and an extra Mercedes doesn't really improve things.

Time is of the essence. Work to buy time, not things.

Yes, what he said ^^^

It's about financial security and not being trapped inside a stressful job until you die because you have a M-Sport diesel on finance. It's a relaxing feeling knowing that whatever happens in my job, they can not take my house away from me.

[SpeckledJim]

swerni said:

FreeLitres said:

SpeckledJim said:

Pulse said:

otolith said:

FreeLitres said:

In the book they analysed what most millionaires are like. The majority of them;

Lived in a very modest house in an average estate
Wore a £100 Seiko watch (not Rolex/JLC/etc.)
Drove an old car bought with cash, etc.

It'a obvious, but spend less than you earn and you start accumulating wealth.

But to what end?

The most poignant question in the entire thread.

Working so hard that the only time you have to enjoy the nice car your hard work bought is when you're driving it to and from work is daft.

The holy grail is a secure (very) early retirement.

Slogging away at a job you don't enjoy into your 60's to pay for the 3rd Mercedes is daft. Your life is running out, and an extra Mercedes doesn't really improve things.

Time is of the essence. Work to buy time, not things.

Yes, what he said ^^^

It's about financial security and not being trapped inside a stressful job until you die because you have a M-Sport diesel on finance. It's a relaxing feeling knowing that whatever happens in my job, they can not take my house away from me.

Then you get cancer or run over by a bus and never enjoy the planned retirement,
It's all about sticking a balance

Personally I don't want to wait to retire to enjoy the fruits of my labor.

It depends if you regard the fruits of your labour as things, or as years.

When you buy things, you reduce the number of years of retirement you can enjoy. One directly affects the other.

It is a balance. But 'things' are not the only 'fruits'.

[SpeckledJim]

swerni said:

i don't really care about things, I care about experiences.

You are also assuming you reach retirement age and don't die of cancer or get run over etc etc

That's entirely fair.

It is strongly odds-on that I will reach retirement age.

It is also a fact that the earlier I can retire, the more likely I am to live to see it, and the healthier I am likely to be at that point. Two big wins.

[otolith]

Becoming financially independent and aiming to retire early is one thing. Living massively within your means in order to accumulate wealth you will never use is another.

[Pulse]

otolith said:

Becoming financially independent and aiming to retire early is one thing. Living massively within your means in order to accumulate wealth you will never use is another.

Exactly.

I have lived well within my means for a long time - all of my 20s, in fact. I've just turned 30 and I realise I have barely done anything.

I've had a few nice cars (couple of Astra VXRs, couple of Z4s, etc.), I've had a few nice holidays (Caribbean, New York, etc.), but not done enough.

Whilst it's nice to not have a mortgage, you really need to strike a balance. Getting the balance right is actually quite difficult, I think.