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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

#111

Post by mywittyname »

branchless wrote: post #95
mywittyname wrote: post #93

Earlier quoted context omitted.

What exactly is your argument here? Why is he a horrible person? Because he rents houses? There's nothing inherently exploitative about renting homes. Owning a home in the US is within the reach of most American families. So lots of people rent because they chose to. Some people prefer the flexibility to move, don't want to do maintenance, or prefer to live in higher density areas where personal homes are less common…

Yes they are horrible and yes they are exploiting people. It's not a service, they are exploiting the capped supply of a basic need. The argument about "if nobody rents out" is just wrong. Are they going to knock the place down if they don't rent? Yes there is a need for rentals but this should be within a world where we have land value tax so the bulk of the gain is passed onto the state to reduce labour taxes, redu…

> The argument about "if nobody rents out" is just wrong. Are they going to knock the place down if they don't rent?

They will construct a building that earns them money. So all those people who rented the apartments are now homeless and their former homes are now an office complex, a parking garage, or a CVS.

Net result: land owner makes money (still), but now people are homeless.

> this should be within a world where we have land value tax

We live in a country where property taxes exist. These people (usually) pay them and it's not cheap. In fact, high property taxes fuel higher property values in the US.

Also interesting, property taxes are also a form of rent. They are often used by the local governments to force people off of their land. This is usually the first step to gentrifying a neighborhood. Rising property taxes cause property values to rise, creating a property tax feedback loop that forces people from their homes. This exact thing happened in my home town where property taxes doubled, then housing values went from $40k to $120k in like five years, effectively increasing taxes 6-fold in the neighborhood.

> Yes they are horrible and yes they are exploiting people

People need food, clothing and shelter. Companies sell food and clothing and I'm sure you think that's okay, but a company selling shelter is exploitation?

You are telling me that I'm being exploited because I live in a rental property. I just don't see it. I gain more value from my place than I lose in rental fees. Being able to move cheaply and quickly has earned me tens of thousands of dollars in extra wages and saved me tens of thousands in real estate transaction fees and maintenance.

Plus, I get to sleep indoors.

> The USA was originally a land of opportunity. Why? Because you could get hold of land cheap.

There's cheap land all over the US. Throughout most of the midwest, you can buy acres and acres of productive, high quality land for <$10k acre. You won't have neighbors for miles and you'll have to construct your own roads, but it's out there and abundant, just like it was in the 19th century.

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

#112

Post by Kinnard »

tome wrote: post #107
Kinnard wrote: post #104

Earlier quoted context omitted.

That's actually not quite correct. The loan itself is an asset to the bank. When you sign the promissory note, they then give you a balance at the bank in the amount of the principal of the note, THAT is the liability. The loan is the asset because that is money coming into the bank. Your deposits are liabilities because that is money you could withdraw from the bank. So it is both a liability and an asset. They don'…

The balance in the bank, which is colloquially called a "loan", is a liability to the bank, yes. And do you agree there is a "risk to the Bank in lending out money they just created" or is that still up for discussion?

No, the balance in the bank is not the loan. You need some understanding of double-entry bookkeeping to understand fractional reserve banking. The loan(promissory note), is on the banks balance sheet as an asset. Your balance which you can withdraw as cash is on the banks balance sheet as a liability.

What is the bank risking when it creates the money and uses the anachronistically titled "loan" contract to distribute it? • They risk only being able to extract so much labor. • They risk taking on collateral which is a REAL asset that someone worked for, like their home if they're unable to generate enough of the assets the banks just write into existence. • They risk passing the buck up the ladder ultimately to the lender of last result if they're "too big to fail" which just creates more money to deal with the problem.

Banks are not lending out other people's money, everyone tacitly knows this, if they were how come when you go to the bank they never say, sorry its out on loan at the moment? This was the case at historically and banks are still riding on the fact that people haven't gotten wise to the way it's worked for centuries now.

There is no lending taking place when bank loans are made.

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

#113

Post by tome »

Kinnard wrote: post #112
tome wrote: post #107

Earlier quoted context omitted.

The balance in the bank, which is colloquially called a "loan", is a liability to the bank, yes. And do you agree there is a "risk to the Bank in lending out money they just created" or is that still up for discussion?

No, the balance in the bank is not the loan. You need some understanding of double-entry bookkeeping to understand fractional reserve banking. The loan(promissory note), is on the banks balance sheet as an asset. Your balance which you can withdraw as cash is on the banks balance sheet as a liability. What is the bank risking when it creates the money and uses the anachronistically titled "loan" contract to distribut…

Hmm ... are we still on the same page? This is where the discussion started: https://news.ycombinator.com/item?id=10995433

You seemed to be claiming that a bank incurs no cost ("no effort") to issue a loan. Are you sticking to that?

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

#114

Post by barrkel »

tome wrote: post #97
barrkel wrote: post #94

Earlier quoted context omitted.

Copyright is a temporary monopoly; monopolies tend to drive up prices.

Yes, but not beyond the value to the eventual purchasers ...

That isn't particularly relevant. Value to purchasers is not constant. With a higher price, you generally get fewer purchasers, and with a lower price, more. I could argue that the maximum net societal value for any already-written book is generated by having a price of zero. The question of price then becomes one of incentive: what price generates sufficient profit to motivate the creation of cultural products? A price that generates billions for the author is probably too high.

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

#115

Post by AjithAntony »

jevgeni wrote: post #49

Fun fact: in my almost 10 years experience in banking I've never met anyone in the industry, who'd consider the book not a scam. And you know you're in trouble, if even bankers consider you a scam.

Whether the autobiographical bits are true or not, the highlights as presented by the article are a valuable message for people who didn't already understand as such.

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

#116

Post by kendrafaith »

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

#117

Post by dragonwriter »

allwein wrote: post #27
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…

> do you think the majority of rich people prepared for "getting rich" by reading hundreds of motivational and self-help books? No, I don't. But you know what they do have? They've grown up in a household and a culture that teaches them thousands of small lessons in being and staying rich. They don't have to read about it, because their parents and friends and lawyers and accountants and country club associates have…

> But you know what they do have?

Inheritance. And connections.

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

#118

Post by dragonwriter »

surge wrote: post #65
reboog711 wrote: post #51

Earlier quoted context omitted.

According to The Millionaire Next Door; I am not sure this is true. Many children of 'rich people' have their lifestyle funded by their parents and only learn how to spend beyond their means; which does not accumulate them wealth in the long-term.

That's basically the difference from what used to be referred to as 'new' rich vs 'old' rich back in the day. The old rich were families whose wealth passed down or perpetuated through generations specifically because they taught their kids the discipline needed to build and keep wealth. Where as new rich fizzled out fairly quickly.

> The old rich were families whose wealth passed down or perpetuated through generations specifically because they taught their kids the discipline needed to build and keep wealth.

No, the old rich were families whose wealth was secured by long-established bonds of connection with other old-rich families who constituted the ruling class and dominated politics and business and acted together, for protection of their mutual interest, as a tribe jealously defending against outsiders, the new rich were those who had secured money but not yet been admitted to the ruling tribe.

(This is still the case, though "old rich" and "new rich" aren't particularly popular terms for it; if your family has connections where, e.g., the Saudi royals will bail out your failing enterprises for the value of maintaining a useful network, and you wealthy establishment donors will pour fortunes into your brothers campaign for office for the same reason despite being willing to say that they think the whole thing is a waste as long as they can be anonymous while doing so, what your parents have given to you is connections more than discipline.)

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

#120

Post by AjithAntony »

branchless wrote: post #91
tome wrote: post #85

Earlier quoted context omitted.

And if that land was purchased with wealth that was created, what's the problem?

Most is purchased with debt - this is what sets the price. Also they are not making new land. Why should people have the right to charge people to live on a part of the earth in perpetuity? The state builds infra around it then the land owner charges a fortune for people to have the right to exist. Land is a special case and should be treated as such. Land value tax would address this by capturing most of the added v…

>Land value tax.

Property taxes already exist. The people renting the property already pay it. If that tax goes up, then so do the rents.

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