Money and wealth
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Money and wealth
1–10 of 193 posts
Re: Money and wealth
#2I like how you defined heath, education, and intelligence as the raw materials, but they don't directly give you the return that will make you wealthy. You need to apply those skills in some way to make income generating assets, and that is the tricky part.
For most people, including Robert Kiyosaki, income producing assets basically means buying and renting out property. I disagree with doing that on so many levels and also think it's a terrible investment in todays over inflated market.
Another option is to save and make investments, but interest rates are currently so low that it's almost impossible to get escape velocity through low risk investments.
That leaves us with entrepreneurship. That is why we are here and it is probably our best chance, but is never risk free and not a path that the average person will use to build wealth.
This said, building wealth rather than accumulating savings is hard even if you are lucky enough to have all of the necessary ingredients and the right mindset.
Your pillars of health, education and intelligence are important. I'm glad that I have them because whilst I do, I hopefully won't go hungry. They are a safety net. However, I don't think that those alone are a path to building wealth.
Re: Money and wealth
#3This makes sense but then what are some useful ways to use cash to build wealth if not buying stocks and other investments? I'm a young guy with plenty of money in the bank (in the tens of thousands; obviously not enough to retire but I could quit my job and do nothing for a while) and basically no debt. I find and I'm sure I'm not alone here with this feeling that, while I could spend a lot more money, I'm perfectly happy spending significantly less than I make. Right now, it's mostly in a bank, waiting for me to spend it on god knows what. Any advice on how to use it to build wealth?
Re: Money and wealth
#4Robert Kiyosaki's claims are pretty hard to verify. Rich Dad, Poor Dad is not a good source for financial information.
Edit: Forbes link (http://www.forbes.com/sites/helaineolen/2012/10/10/rich-dad-...)
Re: Money and wealth
#5There's some great intro videos here that explain a lot of money concepts: http://www.youtube.com/user/PositiveMoneyUK
Re: Money and wealth
#6I like how you defined heath, education, and intelligence as the raw materials, but they don't directly give you the return that will make you wealthy. You need to apply those skills in some way to make income generating assets, and that is the tricky part. For most people, including Robert Kiyosaki, income producing assets basically means buying and renting out property. I disagree with doing that on so many levels…
What do you suggest is better than rental real-estate as a income-producing asset to invest in? Entrepreneurship is great and all but the risk is frighteningly high
Re: Money and wealth
#7I like how you defined heath, education, and intelligence as the raw materials, but they don't directly give you the return that will make you wealthy. You need to apply those skills in some way to make income generating assets, and that is the tricky part. For most people, including Robert Kiyosaki, income producing assets basically means buying and renting out property. I disagree with doing that on so many levels…
I think health is a wealth asset of it's own, because if you lack it you'll trade your wealth to get it back if possible. It also gives you the ability to turn your education and intelligence into more tangible wealth, which I will grant you isn't straightforward. But that doesn't mean they aren't assets.
A house is like education in a way - it seems to have intrinsic value, you know what YOU paid for it, but the outcomes that can come from trying to sell it vary DRAMATICALLY depending on the how good you are at selling it (and the current market conditions). So it is with my bachelor's from UVa - there have been times where it has gotten me basically minimum wage work and times where it's gotten me $1000/hr jobs, all based on how clever I was about it.
Re: Money and wealth
#8Robert Kiyosaki's claims are pretty hard to verify. Rich Dad, Poor Dad is not a good source for financial information. Edit: Forbes link ( http://www.forbes.com/sites/helaineolen/2012/10/10/rich-dad-... )
Even if it's true, property millionaires are outliers who simply used lots of leverage to accumulate property during a massive credit fueled orgy of speculation.
They got lucky. Those conditions are not likely to return and the path is likely to be much more difficult for anyone trying to do the same today.
I don't admire property speculators such as Kiyosaki. Recklessness rather than brains led many people down this path, and then they were subsequently bailed out with taxpayers money and ZIRP when it all went wrong.
In addition, hoarding property is actually a massive net negative to society.
(I am talking about our breed of buy to let investors here in the UK. I'm not sure if you have the same characters stateside.)
Re: Money and wealth
#9Robert Kiyosaki's claims are pretty hard to verify. Rich Dad, Poor Dad is not a good source for financial information. Edit: Forbes link ( http://www.forbes.com/sites/helaineolen/2012/10/10/rich-dad-... )
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Re: Money and wealth
#10The takeaway from this article is that hoarding cash is not a good store of wealth, and that the key to long-term wealth is to acquire net income generating assets. Great points for sure, but I strongly disagree with his assertions that saving up for retirement is ill-advised and that traditional investments (stocks, etc.) are too volatile and risky to be useful.
He never explicitly gives any advice for acquiring net income generating assets, but reading between the lines (and given the context) the advice is to pursue entrepreneurship. While I strongly encourage people to pursue entrepreneurship when it makes sense for them to do so, I don't think it's a substitute for proper retirement planning and long-term investment as this article seems to suggest. And it's certainly not good retirement planning advice for anyone who doesn't already understand the basic differences between money, wealth, and assets as this article seems to imply.
Given the failure rate of entrepreneurs and start-ups on average, it seems quite strange to dismiss traditional retirement planning and long-term savings as too risky while encouraging entrepreneurship as the solution in the same article. Traditional retirement investment vehicles (low-overhead diversified ETFs with a mix of bonds, ratio depending on years until retirement, combined with taking advantage of tax-advantaged accounts such as 401Ks, IRAs, etc) isn't anywhere near as risky, especially over the long term. Remember, a single stock market crash in your 20s or 30s is going to have virtually no impact on your retirement savings in your 50s and 60s. When saving for retirement, you have to consider the timeframe involved. By the same token, risky entrepreneurship isn't all that risky when you're young.