Open letter to John T. Reed - Rich Dad, Poor Dad > He suggested that Robert ask the father of his next-door playmate, Mike. < Correct me if I am off, but I thought he said that when he went to see Mike's dad, they went to the other side of town. < I can imagine a person who owns convenience stores and a construction company. < A construction company can be a person with a pickup. He probably did maintenance on the stores and the fast food joints. >I cannot imagine a restaurateur< Restaurateur! He probably made a bundle with a few picnic tables made by his construction company out side of buildings that served local food. Verna on the Big Island has about a dozen of them. > Every pertinent study has shown that the more education you have, the higher your net worth and income. < Do they say anything about income-earning assets? Net worth and income sounds like a JOB. > "Please tell me the point." < The way the Rich think differently, boils down to how they define simple words like assets, wealth, and how they fund luxuries. "Assets put cash in your pocket, liabilities take cash out of your pocket." No one can dispute that the rich buy "income-producing assets," the problem is the poor buy liabilities that they think are assets, which clearly do not earn anything, and may have no market value. Wealth is measured as the number of days the income from your assets will sustain you. Financially Independence is when your monthly income from assets exceeds your monthly expenses. Homes are not self-generating assets because of the mortgage and other carrying costs and lack of rent income. You also lose the growth of investments that could have been bought with that income. In summery students learn to measure wealth in, asset earned income. They learn to look for opportunities to add self-duplicating assets. They learn to let asset earned income, purchase luxuries. I heard the audio there are no page numbers. >I know approximately what my net worth is. < Net worth is not the true measure of wealth according to Bucky. It is the income from your assets that is wealth. >The article says "Kiyosaki's got hisâ¦" and that he lives in a $3.5million dollar home in Phoenix. < People always overestimate the supposed value of there real estate. Nobody really knows until it is sold. >I once investigated best-selling real-estate author Robert Allen who wrote Nothing Down. When I again asked where he owned his home, he admitted, "I rent.â I have the conversation on tape. < Of course, he rents, Renting out your home and living in the one next-door, is one of the strategies that seminars teach. Tax benefits mostly. > Paul subsequently was the subject of a Forbes story. They said they investigated his purported Florida real-estate profits and could not find a "trace" of him in Florida real estate. < Of course not. After Jimmy Carters slip about LLC's. there is no way you can find out who owns anything with an LLC. >He later got into trouble with the law and was the subject of a 60Minutes segment about his mansion in Florida that creditors could not get to after he declared bankruptcy. < It was probably owned by an LLC. >Kiyosaki says, "I keep my holdings private," Yet he won't disclose any details because he does not want people to know he has money. < He does not want people to know where the money is. Not the same thing. >I have always felt that implying you have money was worse than revealing your net worth. < Net worth does not matter, its income in excess of expenses that matters. >avoid mutual funds and 401(k)s because they are too risky< Look, we all know that markets go up and down. These things do not let you sell short. Does that give you a clue? This is not really the kind of thing that you teach pre-teens. He is rambling on to give parents a general idea of some alternate choices. >there are three different types of income: earned, portfolio, and passive< He is separating assets based on income not taxes. I prefer portfolio income myself. >If the advice of "Rich Dad" back in 1955 was so great, how come Kiyosaki was homeless and bankrupt 30 years later? < He took chances. It is not a big deal when you know how to bounce back. Have you ever heard of Jesse Livermore? > there is no ambiguity about authority in the military. <Are you familiar with General Armstrong Custer? There was ambiguity all over the place. > "Prices go up because of greed and fear caused by ignorance.â In fact, prices are determined by supply and demand, as anyone who is reasonably well read knows. < Same thing, greed, and fear influence how much the producer will produce and how much the buyer will pay. > In fact, corporations do not shelter income. < Are you saying that they "cannot," shelter income? "It is the knowledge of the power of the legal structure of the corporation that really gives the rich a vast advantage over the poor and middle class." > The only way to measure payments received over a period of years is in terms of interest rate or present value. < As long as you are convinced that anything is the "Only Way," you will not find creative solutions. That is what the I Ching does. I forces you to use your own brain. >The more you make, the more you keep. < The more you make the less percent that you keep. If it is earned income, there is more Social security withdrawn. You keep moving into higher tax brackets. >Most people work all their lives paying for a home they will never own. < This is because they refinance because they are in debt from owning liabilities. >You should use mortgage and credit card financing whenever they will help you achieve your goals. < The lost point here is that these liabilities are more likely to bring you down. You should organize your life so that you do not need mortgage and credit card financing to help you achieve your goals. >The rich do not play by the same set of rules. < O. J. Simpson case example >I only play with money I can afford to lose. < Look, we trade commodities. The first rule of trading commodities is only use money you can afford to lose. Everybody knows this. > Only a small percentage of people are suited to entrepreneurship. < The principles he suggests teaching pre-teens are the same for many fields. I am not an entrepreneur; I may not even like entrepreneurs. I use these principles like any capitalist. >usually need to begin as employees to get their starting capital and to learn while they work. < You can buy stuff with no money down. If you want to become an employee that is your personal decision. >"Don't work for money; make money work for you," sounds smart, but what does it really mean? Quit your job and live off your investments?< No, the message was to get assets working for you. When the income from assets exceeds your expenses, he said you could still work if you want to. > buy a smaller home than you can afford, so that you have a smaller carrying costs and therefore have more money to invest. I agree. < If you agree to the central point of his book, why the personal attack? Don't shoot the messenger! His claim to fame is that he is a best selling author. Nothing else!! > Kiyosaki is the first real-estate investor I ever heard of who was eager to employ expensive accountants, attorneys, and to use brokers always. < You flunked. The real estate course I took says what Kiyosaki suggests. Hire specialists smarter than you. > "Huh! The guy who brags about his Porsche, Rolex watch, and $400 titanium golf club taught you not to buy expensive toys?!!!" < Expensive is relative. Buy a car with one months income, buy a watch with one days income receive a golf club as a gift. >About the only asset you would sell at a gain would be real estate. < We sell futures at a gain all of the time. Your ONLY is a bunch of baloney. >In 1973, I was watching TV and this person came on advertising a three-day seminar on how to buy real estate for nothing down. < Hawaii got cable 1972. I saw the ads on rabbit ears TV much later. We took the course in the late seventies in Hawaii. It cost about$400.00 Why are you mentioning this? I think I read How I Turned $1,000 into Five Million in Real Estate by William Nickerson at the Hawaii Public Library then took the course offered by, by Albert J. Lowry >The nothing-down movement was started by seminar speaker Robert Allen in 1978. His book Nothing Down came out in 1980. Cable TV did not become widespread until the early 80's. Advertising real-estate seminars on cable TV infomercials started around 1984. < So, who cares about the history of seminars? This has nothing to do with "Rich Dad!" The examples and principles "Rich Dad," teaches were in the Lowry, course. The addition made here is the emphasis on income-producing assets as being the ONLY true assets. It is the unleashing of compounding earnings that is the real power. Assets without some form of earnings do not tap into this compounding growth. So, defining income-producing assets just as assets is his genius. Defining Wealth based on an assets income, belongs to Buckminster Fuller. Homes were always a liability. >Frequently, my broker will call me and tell me [to buy] a company that he feels is just about to make a move that will add value to the stock. < This can be determined by using Stochastics, reading a chart.
You left off the new favorite of B.S. providers. "grab the brass ring". I read the book and knew the author was fulll of it. But I am planning to create more income producing assets. So I will give him a little credit.
-- yeah, so is 'reader's digest' ...which is published at a 6th grade reading level. like aradiel is saying: its all lies... fic-tion: 1. an imaginary statement, story etc. 2. a) any literary work with imaginary charactors and events, as a novel ,play...
Once again, most of this is another superficial discussion on what is "right", what is "bullshit", and what is godknowswhat. This kind of thinking is way too black & white, way too exclusive, and it disables you from reaching the "next level" of thinking. I'm talking about a level of thinking that most people will never reach or even aspire to. Don't know what I mean? OK, I will explain it the easy way: Any kind of information you can gather is neither "right" nor "wrong", because there is no "right" or "wrong". Apparently, some people here claim to understand this in to be paramount in the markets, and on the other hand don't think it applies for anything else in the world? What an irony! It applies for anything. There is nothing ever to be gained by being highly judgmental or restrictive in your evaluation of information. The more open you are to diverse processing, the better it is, and the more productive and expanded your mind will be. So again, there is no "right" or "wrong". How can anybody claim that Kiyosaki is either, if one's meat is the other's poison and everything is entirely depedent on perception? For Kiyosaki; I have read his books. I found them neither "right" nor "wrong". There is some great information to be gathered in them, and not necessarily just by taking in what's written, but rather by reading between the lines, or even realizing "inaccuracies", which in turn improves your personal knowledge base. How can anybody who reads a book and finds "BS" in it, say it was of no value to him? Clearly, if you found "BS", then it has done you an indirect service by testing and improving your personal abilities of information filtering, objective evaluation and comparison. Looking at things in this light, every book has a certain inherent value to it, no matter what the "critics" say, because it reinforces or challenges your personal information base to that point in time. Clearly, a 7-year-old needs to be restricted in what it reads, because it hasn't got any of these filters developed yet and will believe and acknowledge everything it reads as true. However, I think as an adult, your filtering mechanisms should be developed enough to derive value and education out of any book, including or in particular from books that are contrarian, challenging, or in your perception "wrong" in terms of the information they contain. This would be the first level of thinking that comes beyond the thinking of the judmental "common crowds". The next, even more advanced level of thinking involves the ability to derive inter-thematic analogy value from any information source you perceive. Or to put it in simple examples, derive thinking that will improve your trading from a book that talks about photography, or derive thinking that will improve your love life by reading a book about investment. Sounds crazy? Then perhaps your mind isn't open enough yet. It depends entirely on your model of the world. As your personal "database" of knowledge and the interoperability of its components in your brain improves, so will your fundamental understanding of the world on a deeper level than most people can perceive. Eventually, you will be able to endeavour to a multitude of learning, thinking and doing tasks, to an extent that most people won't, because they are too narrow-minded. What I am talking about is a lot like the "unity of knowledge" as described by the scientist Edward O. Wilson in his book "Consilience - The Unity of Knowledge", one of the finest books on the fundaments of universal knowledge and genius. Another fantastic author is Ayn Rand, with books like "Atlas Shrugged" she set milestones in thinking that goes a little beyond the common, judgmental crowds. Read a few of those books, then go back to Robert Kiyosaki. Perhaps you'll derive more value from it. Who knows? Personally, I liked "Rich Dad's Prophecy" by Robert Kiyosaki - Call it right or wrong, rich or poor, I found it to be full of insteresting thoughts either way. As said, a lot of what it will do to you is dependant on yourself rather than just the author. To sum all this up in the words of Mark Douglas: Only if you learn to eliminate pure judgmentalism and reservations from your cognitive processes, will you be able to fully perceive the "now moment opportunity flow" and process information and situation in the best way possible in any given moment. Be open to it, and make the best of it.
===== Aradiel; Thanks & I keep in mind, even if Robert Allen went bankrupt; there were still some valid real estate points in his public library book. I prefer accuracy also & an honest broker & tracking closing prices of real estate helps also . Back to my discretionary reading.
Scientist, this was easily one of the best posts I've read on any of message boards in quite a while. And, speaking of interoperability , the following line of yours goes in line with thesis: it's not the setup that defines the success of your trade. It's what you do with setup - trade it directly or fade it. It's not the indicator that tells you what to do - it's how you incorporate the indicator in your system. Support and resistance don't tell you what a stock is going to do - they just show you the levels where you are to do something, and it's up to you what to do there. It's always about a trader. Respect, Vad. P.S. Sorry if this trading analogy is not on thread's topic
Hey Threei, Many thanks for the kind words - I have to say I feel very honored to hear a comment like this by such a respectable member! The same thanks also go to cdbern - thanks for your kind words. Coming to your setup thesis: There is such fundamental truth in this, it's not funny. It's exactly the same thing! That's why you can give the exact same strategy or system to 100 different people, let them trade it, and have 100 different results, anywhere from badly losing to extraordinarily performing! This is common knowledge, and has been proven. That's why the "show me a good system" or "I want to buy a good system" approach will never work. As soon as there is the slightest bit of human perception and discretion involved, the whole thing becomes an unpredictable venture, regardless of how "easy" or "simple" it may seem. This is only testament to the amount of subjectivity and diversity involved in human thinking and perception. So this applies for books, trading systems, and almost anything. This realized, when people ask me "Is this book worth reading?", I won't say "yes" or "no", but rather "depends on you!" Most people don't seem to get this. They want a "straight answer", black or white. But if if you've ever witnessed one person completely raving about a book and another calling the same book a "worthless piece of toilet paper", then you realize why this just can't be so simple. And this applies universally. And I don't think it's just because one person is smart and the other is gullible. And that's what some people on this thread are trying to imply with their pro & con arguments on Kiyosaki. And neither seem to be open for counter-arguments. Why? Because each has their own model of the world. In NLP, one of the most important rules is: "Accept and be open to other people's model of the world. The worst that can happen is that it may expand your own." Well, if people all would, then I think we would have a lot less of these wars and misery on this planet. It's always about the individual person, reader, or trader for that matter.