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Rich dad, poor dad – the story that formed my views on making money

micaelwidell.com

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Re: Rich dad, poor dad – the story that formed my views on making money

#71

Post by TooSmugToFail »

reboog711 wrote: post #48
pkorzeniewski wrote: post #5

The problem with all these "how to get rich" books is that they're full of anecdotes, quotations, fictional stories, motivational bullshit etc. which make you feel good while reading them, but as soon as you put the book back on the shelf, it's all gone. It's just a temporary boost of energy and motivation, because reading requires almost no effort and more often that not it's just another way of procrastination. Ser…

It has been a long time since I read it; but I don't consider "Rich Dad, Poor Dad" a 'how to get rich' book. The real benefit I got from that book was how it draws a line between a liability and an asset. For example, a car is not an asset; especially if you had to take a loan to pay it off. That is something that takes money away from your cash flow every month; not add to it. A rental house that brings in money eve…

That was the only take-away for me, back when I read it maybe 15 or more years ago. But in addition to that, I can't say I got more out of it...

Re: Rich dad, poor dad – the story that formed my views on making money

#72

Post by branchless »

mywittyname wrote: post #63
branchless wrote: post #9

How I hate people like this. "Building assets and letting them work for you". For this you can read: "be the footsoldier for the banks who have a monopoly on money creation. Ask the bank to create money for you then use this to join the land monopolists. Then let those stupid little people who are actually creating wealth rent it back from you. This way you get a stream of their labour." For assets read "property". P…

> Nobody adds a billion of wealth creation, not even Gates. A billion dollars is not very much. There are ~150M Americans working in the US, if something helps every one of them make $7, then over a billion dollars has been created. Microsoft has enabled practically every person in a developed nation to do their job more efficiently. This is worth far, far more than a billion dollars.

MS is worth a lot and yes they have helped productivity. Did Gates do that or did he do it with the help of many people before him inventing all sorts and many workers adding software. Were the workers compensated sufficiently for the value they added? Did MS use a pseudo monopoly using the legal system to capture more value than they actually added?

Gates did a lot but he stood on the shoulders of giants, seemed to have some "sharp" business practices enabled by our monopoly loving nation states and a lot of employees did the heavy lifting.

I'm not criticising Gates, I don't mean to pick on him. If we had cheaper land I think the balance would shift to workers being less over a barrel and more able to negotiate higher wages to capture a greater share of their added value.

Re: Rich dad, poor dad – the story that formed my views on making money

#73

Post by mywittyname »

sharemywin wrote: post #17

entrepreneurship is a 1/0 game generally. Investing everything you have into something that has a 95% chance of failure is pretty risky. I would argue putting more than 10-20% of your money into one venture is really risky.

I disagree. There are lots of tried and true businesses out there which have a high likelihood of success with some basic research. It's just that a lot of these markets are cornered, so you probably wouldn't call investing in them entrepreneurship. Opening a McDonalds or gas station has a pretty high likelihood of success with enough research. As does real estate.

Trying to invent the next great technology is hard, and you'll probably fail. But following in the footsteps of others greatly increases you odds of success.

Re: Rich dad, poor dad – the story that formed my views on making money

#74

Post by charlesdm »

tome wrote: post #69
charlesdm wrote: post #62

Earlier quoted context omitted.

Anyone can make loans. However, banks borrow newly created money from the ECB or FED at an extremely low rate. If you borrow money at 2% from a bank then they are getting it at 0.1%. The spread - that 1.9% - is their profit.

> The spread - that 1.9% - is their profit. No it's not. There are plenty of costs involved in issuing loans that will eat into that 1.9%.

Well, obviously there are running costs / default risks / etc. I was just pointing out how a small bank works in its simplest form.

Re: Rich dad, poor dad – the story that formed my views on making money

#75

Post by mywittyname »

branchless wrote: post #44
MCRed wrote: post #16

I read this book, was skeptical given the gungho attitude, so I did some due diligence: Roberty Kiyosaki claimed to have founded a company that went public. So I figured Kiyosaki was a rare enough name and searched the SEC records to find out if this was true. Was unable to find any evidence that he had taken a company public, and so he lost credibility with me. You meet really entertaining characters in bars sometim…

Plus in "managing real estate" you are living off the backs of others in a flawed system. These real-estate "investors" are simply the foot-soldiers of banks who are creaming off real wealth creation. You only have to think about it for a moment to realise this. What if everyone did it? We'd all starve. What if everyone worked hard to gain a skill and then used it to create wealth? We'd have a great life. I understan…

> What if everyone did it? We'd all starve

If everyone did anything other than grow/hunt food, then we'd all starve. The entire structure of our economy is built are specialization where only a small fraction of workers produce enough food for the entire population.

Re: Rich dad, poor dad – the story that formed my views on making money

#76

Post by branchless »

mywittyname wrote: post #75
branchless wrote: post #44

Earlier quoted context omitted.

Plus in "managing real estate" you are living off the backs of others in a flawed system. These real-estate "investors" are simply the foot-soldiers of banks who are creaming off real wealth creation. You only have to think about it for a moment to realise this. What if everyone did it? We'd all starve. What if everyone worked hard to gain a skill and then used it to create wealth? We'd have a great life. I understan…

> What if everyone did it? We'd all starve If everyone did anything other than grow/hunt food, then we'd all starve. The entire structure of our economy is built are specialization where only a small fraction of workers produce enough food for the entire population.

I knew someone would try to skew this so that's why I specifically categorized it into "creating wealth" vs "rentier activity". I don't see your point as valid, of course if we all made kitchenware and nobody made food we'd starve, that wasn't the point of my post.

Re: Rich dad, poor dad – the story that formed my views on making money

#77

Post by bittercynic »

kaitai wrote: post #37
ZeroGravitas wrote: post #10

Earlier quoted context omitted.

Possibly this is biased, but I'm not sure I'd ever seen this kind of financial self-help book till I saw them in the US. I flicked through a few books expecting basic info about compound interest or whatever but instead it was all "if you believe hard enough then the money will be magnetically attracted to you" and similar woo. A very strange experience.

The US: a mixture of economic fear, economic hope, and pseudo-Christian rhetoric that is stoked for gain by many. “Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.” Ronald Wright "17 percent of Christians surveyed said they considered themselves part of such a movement, while a full 61 percent believed that God wants peop…

This comment adds clarity to a new angle on the discussion. Not sure why the downvotes.

There is a huge class of working poor, who earn just enough (or not enough) to cover real necessities. For this group, there's not much value in advice on economic strategy. Even in the event of a moderate-sized windfall, the history of scarcity makes it impossible to use a windfall to improve your situation in a lasting way.

However, there is another huge class of people in the US who earn more than enough to be free from economic worries and start building serious wealth, yet they squander their huge paychecks each month. For this group, maybe books like this can have some value.

Re: Rich dad, poor dad – the story that formed my views on making money

#78

Post by branchless »

laotzu wrote: post #68
branchless wrote: post #53

Earlier quoted context omitted.

Also see social credit theory for the idea that the value of goods produced by workers is always less than their wages: http://www.socred.org/ Plus banks have a monopoly on money creation and can create it with zero cost, ramping up land prices and soaking up all productivity gains into land. All the rentier need do is kick back and wait for the state to add value so they can charge more rent. Henry George knew it bu…

I am familiar with the credit-theory of money as opposed to the debt-theory which we currently use. David Graeber explains it in Debt: The First 5,000 Years [1], for anyone interested in further reading. [1] https://libcom.org/files/__Debt__The_First_5_000_Years.pdf

Yeah I've not read that yet, learning french to pass an exam to get Quebec residency so I can escape the hellish UK rentier paradise. Once I've passed I'm hitting those economics books!

Re: Rich dad, poor dad – the story that formed my views on making money

#79

Post by charlesdm »

laotzu wrote: post #64
charlesdm wrote: post #59

Earlier quoted context omitted.

Doesn't this all depend on how you use that specific debt? If you use the above example, if I can generate $500k each year using $1m in debt, how is perpetually serving the interest expense on that debt bad then? Use it well, you can create additional profits. Use it poorly, you'll end up with nothing (or even lose capital). Maybe you mean that the lever effect shouldn't exist, so that it's a zero sum game?

While it is a two-way street (both parties "agree"), what I'm saying is that in an honest, straightforward arrangement people should not be contractually obligated to run in the rat race their whole lives trying to pay off a debt that by design can never be paid off. So yes, a zero sum game sounds quite logical.

Now you're talking about "consumer" debt. i.e. debt to buy a car / house / student debt / etc. That's bad debt.

If it's not intended to be used for investment, I would personally never use debt.

Re: Rich dad, poor dad – the story that formed my views on making money

#80

Post by tome »

twistedanimator wrote: post #52
hammock wrote: post #38

Earlier quoted context omitted.

That advice seems to apply to wage slaves (hourly rate) but not entrepreneurs or salespersons (not hourly). Many other financial books recommend developing income streams outside of selling your labor at an hourly or yearly rate, which would seem to be missing from your book.

Even the salaryman can calculate his hourly rate. I am salaried, but when I sat down and calculated my hourly rate, I was a little shocked. I didn't factor in benefits or anything besides my after tax take home pay. It's as simple as $(2 week paycheck) / 80. What you get is effectively your hourly rate. As a salaryman, knowing this value will help you avoid working overtime since overtime is unpaid. The more hours yo…

I think you're misunderstanding hammock. Indeed only (forms of) the salaryman can calculate an hourly rate.
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