personal money skills

Discussion in 'Economics' started by cdbern, Jan 24, 2004.

  1. cdbern


    How would you rate your personal money management skills?

    A lot is written for traders about managing their money in trades, but how about our personal bank accounts etc. What's your view, how would you rate yourself.

    I've read tons of personal finance books. My favorite is "Richest Man in Babylon". Robert Kiyosaki has the "Rich Dad, Poor Dad" series, which is also very good.

    Sometime back, our oldest son purchased two games. One is "Cashflow for kids", the other "Cashflow 101". Kiyosaki devised them. Our grandchildren love playing them. In fairly short order it teaches them about money management. They receive a paycheck and pay bills. Things come up they have to pay for etc. The older ones are now playing 101. The object is to get out of the Rat Race.

    You select a profession card (they're face down) and record your income and expenses. Throughout the game you have the opportunity to purchase stock, houses, apartments, businesses etc. which provides cashflow. You also can be downsized, get audited, buy doodads, and have children (which raises your expenses and lowers your income). Its interesting to note that professions with higher wages often times have a harder time getting out of the rat race because of their level of indebtedness.

    I once played the game with a 14 yr old that constantly wanted her parents to buy her "doodads" and was anxious to grow up and have a baby. She had a fairly low paying job, kept landing on doodad squares (one was a $4000 big screen TV) and had 3 children. When the first one came around it was "no problem", when the second one came it was "oh well", when the third one came (you're limited to 3) it was "not again!". She left with a different attitude.

    So I ask how you would rate yourself on your money spending? What are you doing to get out of the rat race or do you even want to. Are you satisfied with what you have or looking to have the newest and latest whatever? Do you pay yourself first or last? What have you taught or are teaching your children? Do you need a 'new' car or are you willing to fix up the old one?

    Just thought I'd throw this out. Kids might learn to read and write, but nothing is taught about money management. When crap happens, most people are caught flatfooted.
  2. Mecro


    Rich Dad, Poor Dad is a great book. A lot of ppl do not understand the actual point of it and start critisizing it. There are many little nitpicks you can make about the author but the overall general point is why the book is so great. If you focus on the nitpicks you will never understand.

    I think the best point Kiyosaki makes is about truly understanding assets and liabilities.
  3. izeickl


    Ive just read Rich Dad Poor Dad also, I found it very good, a lot of it was things that I had thought about during the years and was good to read some backup thoughts.
    I completely agree on the sentiments in it...todays debt culture and ignorance of money is global it seems. The "Must Have It Nows" are everywhere and slogging it out in the rat race.
    I was lucky my father was a business man and taught me a lot like "rich dad" in the deffinatly made me aim higher than the pay check at the end of the month from company X Y or Z.
  4. DTK


    I’m pretty good about my money.

    "Richest Man in Babylon” is also my favorite. It had quite an impact on me when I read it in my first year of university. Overall, it has helped me get to my current financial position much more than any of the classes that I took or any other single source (especially since it’s not something that someone drags you aside as a young man and tells you to do). I find myself recommending it a lot to friends regardless of their financial situation.

    Those board games sound fantastic. I’m going to have to pick them up. Thanks kindly for the suggestion cdbern.

  5. cdbern


    You know, I grew up believing a home was an asset. It is, but only for the Lender.

    This book and others in the series brought out some points most ppl don't think about.
  6. cdbern


    You can find the games on his web site...... be prepared, they're about 100+ bucks, but worth every penny.
  7. Given the priceyness of the Cash Flow game I would consider skipping the 1st one and just buying the second. I had a chance to play the 1st one and found it pretty enjoyable, but a few more complications wouldn't have made it less accessable, even for kids.

    I agree that based on my one play of the game it is a GREAT way to teach your kids about money and personal finance and the importance of not going into debt.

    A few negatives for the 1st game were that it was heavily biased towards real-estate and the stock system wasn't very systematic. I seem to recall my friend (who had played the game before) passed on a stock opportunity because he knew the price being offered was the highest in the game.

  8. Another book some of you might like is "The Millionaire Next Door". The name of the author escapes me right now, but it is a very interesting look at the average millionaire -- showing how the habits of those who are wealthy differ from the habits of those who earn alot but fail to retain wealth.

    The Kiyosaki books and games make good general points, but this book actually provides details, statistics and everyday role models that you can sink your teeth into.

    Either way I'm all for teaching kids (and adults) about money -- too many people are intimidated by the subject because it was never discussed in front of them.
  9. cdbern


    I agree with your comments. Game #1 for me was kinda boring with its simplicity, but the grandkids don't know any better. Or rather the younger ones don't. Three of them (8, 10, 12) have advanced to 101 already. Having been through the "for kids" game, they caught on to 101 real fast. Sometimes they get out of the rat race faster than the adults.

    After playing 101 for a while, the next challenge is to play it using your current income and obligations. That can be a wake up call. He has a more advanced one that is heavier in the "market" although we haven't gotten that yet.

    All the games in the world won't help if you don't put into practice what you've learned, acquired some self discipline and look for teaching opportunities. For example the first time I played it with one of our sons, he kept landing on 'paycheck', a few doodads, but never a decent opportunity. He was getting really frustrated. Then 'wham' he was downsized. He had plenty of money to pay his expenses. The lesson here was, "now aren't you glad you had the money set aside to carry you through being downsized?" After that he started getting good opportunities and beat me out of the rat race.

    The Millionaire next door was an enlightening book. I didn't realize how tight they really are and their thought process. Reminds me of a comment a friend once made. They own a huge car dealership but NEVER buy a brand new car. As she says, hey let someone else loose all that money the minute its driven off the lot. They are constantly taking trips (funny how they're all business trips). They put their kids to work, but first they have to get a degree. Doesn't matter in what, and they pay their own tuition.

    I think the games are great especially for people that are truly clueless.

    One of the things I would like to do is start a summer school/work program. Since its so hot here, the high schoolers would work in the mornings and spend the afternoons reading carefully selected books then playing Cashflow. They would need to keep a record of what they did with their paychecks. Who knows, they may even devise their own game. I haven't gotten past the thinking stage yet as I'm too far away form being ready to do it.
  10. maxpi


    I suck with money. I'm headed for arbitration with the credit card guys and I don't give a shit because when trading becomes profitable for me I will be self employed and self employed people are bad credit risks automatically. It is a good thing I am an optimist or I would be discouraged at this point. :D

    I know one or two of the millionaire next door types, they wear not just JC penny clothing but badly chosen, worn out JC Penny clothing, they are so tight they have no class. I don't envy them at all driving around in their Ford pickups.

    #10     Jan 26, 2004