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Accidentally watched a Kiyosaki video today
Old 03-04-2007, 07:10 PM   #1
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Accidentally watched a Kiyosaki video today

I can't believe I ever fell for some of this guy's BS. Just watching it now makes me throw up a little in my mouth. Sadly, since maybe 5% of his drivel is accurate, people believe the rest is.



How can he say that 401Ks and investing are bad with a straight face? And then he says that a house is a liability because the mortgage puts money in the banker's pockets. Of course the mortgage is a liability, but the house itself is still an asset.

Ahh, now I'm annoyed. But misery loves company :P
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Re: Accidentally watched a Kiyosaki video today
Old 03-04-2007, 07:17 PM   #2
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Re: Accidentally watched a Kiyosaki video today

I'm glad I found this board just before I ran across Mr. K. Otherwise I might have got some on me.
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Re: Accidentally watched a Kiyosaki video today
Old 03-04-2007, 07:23 PM   #3
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Re: Accidentally watched a Kiyosaki video today

Well, a few years ago I fell for all of his crap. However, the reason I don't regret it is because it led me to reading more about it, and luckily I found this board.

Now I have a 401k, a Roth IRA, and a net worth that is actually rising. I don't think I'd have done that without a little of his craziness making me want to learn more about money. So I guess to be fair I should say that as long as you take his ideas with a grain of salt and do your own research, he's not completely worthless. I must admit I think the CashFlow game is worth playing.

But I still hate listening to his talks now that I'm more educated on finances. It's downright misleading.
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Re: Accidentally watched a Kiyosaki video today
Old 03-04-2007, 07:58 PM   #4
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Re: Accidentally watched a Kiyosaki video today

Quote:
Originally Posted by NinjaPigeon
Well, a few years ago I fell for all of his crap. However, the reason I don't regret it is because it led me to reading more about it, and luckily I found this board.
But now you won't be able to find those deals where you buy a self-storage facility with nothing down and it nets you enough for the porsche payment !!
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Re: Accidentally watched a Kiyosaki video today
Old 03-04-2007, 08:09 PM   #5
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Re: Accidentally watched a Kiyosaki video today

He was bad from the get-go, and I also hate that PBS has him on.

That said, I used to think that Oreman was at least practical, and even if unsophisticated, gave relatively sound info (lower debt, live below your means, etc), but she also was on this weekend, along with Kiyosaki, and she has a new spiel -- "Eight things a woman has to do" or some such crap. It was positively horrible!

She starts from the premise that every woman in her audience has zero self esteem, zero common sense, and is nothing more than a useless clothes horse. She tells them things like "You have to get clean." And "Each of you is selling yourself, and you are doing it cheap." Holy Toledo. I don't know what this junk is, but it sure as heck is not financial advice. You can sense the discomfort of the audience as she tries to work herself through this script which is more self-help pop-psych than anything even close to financial advice. Positively horrible. She has well and truly jumped the shark!
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Re: Accidentally watched a Kiyosaki video today
Old 03-04-2007, 10:52 PM   #6
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Re: Accidentally watched a Kiyosaki video today

If you haven't read this page, you have to see John Reed's take on Kiyosaki http://www.johntreed.com/Kiyosaki.html
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Re: Accidentally watched a Kiyosaki video today
Old 03-04-2007, 11:26 PM   #7
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Re: Accidentally watched a Kiyosaki video today

I've never read Rich Dad, Poor Dad or any of Kiyosaki's books. A few years ago when this board was populated by a much smaller number of posters, a newbie posted a question asking what books he might read to get more educated and motivated about investing. I had just read a couple of long threads on two other retirement boards where people discussed books that had an impact on their investing. Rich Dad, Poor Dad had gotten a lot of favorable reviews. I actually had put it on my to read list and said so in my response to the newbie.

The reaction to my mention of Kiyosaki was very negative, detailed and specific. Based on the comments I looked up some writings ravings of Kiyosaki and took his book off of my to read list. Since then I've been exposed to Kiyosaki through the media on rare ocassions. Each exposure further confirms my low opinion of him. Snake oil is the term that always comes to mind.
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Re: Accidentally watched a Kiyosaki video today
Old 03-05-2007, 12:13 AM   #8
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Re: Accidentally watched a Kiyosaki video today

There are reasons that the 401k can be bad
Rk is not the only one that discusses that a house should not be part of your retirement plan. Even a few people here would agree .

John Reed is a guy that writes real estate books after losing money in real estate and is generally an a$$.

There are other things that people on this board say that agrees with Rk .

I dont care who or what you read. It all needs to be read with a grain or several grains of salt.
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Re: Accidentally watched a Kiyosaki video today
Old 03-05-2007, 12:33 AM   #9
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Re: Accidentally watched a Kiyosaki video today

As said before, I am an advocate of the basics of Rich Dad Poor Dad. There is no contesting the concept that it is better to make money work for me than to work for money. Like another poster said, Kiyosaki got me interested in financial freedom. The parables in his book are simple and almost anybody can relate to them, which helps inspire people to do something.

Anybody who is just starting down the path to financial freedom, I feel, should read the book. Take it with a grain of salt as others have said, but still read it and get what you need to out of it.

Also, those who take issue with him calling a home a liability and not an asset just need to understand that he is re-defining an asset. To him, an asset brings in income. So a home on its own is a liability, but a home that rents out one of its rooms becomes an asset (even if you live in the rest just the same). That's his take on 'asset'... you may have a different one, but his definition is the cornerstone of everything else he says.

I've read a lot of his stuff, in fact, participating on his forums is how I found out about this forum from spidey. I like this forum, and it's opened my eyes up to the fact that I can ER even without a side business (though I have one and plan to have more) simply by LBYM.

So without Kiyosaki, I likely would have not found my way here and found a balance between the best parts of his philosophy and the best parts of the FIRE philosophy.
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Re: Accidentally watched a Kiyosaki video today
Old 03-05-2007, 12:59 AM   #10
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Re: Accidentally watched a Kiyosaki video today

On Kiyosaki I find this an appropriate site:

http://www.johntreed.com/Kiyosaki.html

Like Suzie Orman and a number of others (I recommend Your Money or Your Life but NOT it's financial advice) it is fine to get an inspiration or insight from any source. But developing a deeper financial understanding usually makes one want to leave them behind.
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Re: Accidentally watched a Kiyosaki video today
Old 03-05-2007, 05:18 AM   #11
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Re: Accidentally watched a Kiyosaki video today

Fair enough to those who say that got some value from Kiyo -- indeed, I also thought -- "Gee, this guy is such a dolt, and I don't believe his personal story one iota, but the idea of being a business owner versus earning incremental percentages as an investor/saver is of course powerful."

So, yes, consider his message, and take any possible value/truth from it.

But also realize that he is running a small business, too. That business is in selling you crap. Just like those S/W trading program infomercials, or the two 'short people' real estate kit guys on TV, they all are in the "get rich dreams biz."

For them, the cash cow is not in the real estate, not in the markets, not in the futures, not in whatever the ostensible topic is they want you to believe. Instead, it is in the 'package' or 'system' they are selling to you.

I wonder when some one of them will finally be bold enough to make an infomercial to sell you a package on.... (wait for it).... selling the package! That is what it really is all about.
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Re: Accidentally watched a Kiyosaki video today
Old 03-05-2007, 01:43 PM   #12
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Re: Accidentally watched a Kiyosaki video today

Quote:
Originally Posted by Peaceful_Warrior
I've read a lot of his stuff, in fact, participating on his forums is how I found out about this forum from spidey. I like this forum, and it's opened my eyes up to the fact that I can ER even without a side business (though I have one and plan to have more) simply by LBYM.

So without Kiyosaki, I likely would have not found my way here and found a balance between the best parts of his philosophy and the best parts of the FIRE philosophy.
This is a ridiculous argument. It's like saying "I would have never learned about finances had I not spent one year in prison, which gave me lots of time to read, so I recommend prison to anyone who wants to learn about finances...."

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Re: Accidentally watched a Kiyosaki video today
Old 03-05-2007, 03:14 PM   #13
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Re: Accidentally watched a Kiyosaki video today

Please don't tamke my comment out of context.

I said I *likely* would not have found my way to the FIRE forums. And subsequently found a balance between RDPD and FIRE.

I was not saying I was (nor am) financially ignorant, nor would have ever increased my financial knowledge. I'm just saying that with regards to FIRE and the forums here, it is likely that I would have not found them.

I came here because spidey took a question I posted on RDPD and cross-posted in here. I got interested and checked this out and liked it.

Quote:
Originally Posted by JustCurious
This is a ridiculous argument. It's like saying "I would have never learned about finances had I not spent one year in prison, which gave me lots of time to read, so I recommend prison to anyone who wants to learn about finances...."

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Re: Accidentally watched a Kiyosaki video today
Old 03-05-2007, 04:03 PM   #14
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Re: Accidentally watched a Kiyosaki video today

I apologize to Kiyosaki fans in advance, but IMO, Kiyosaki.... :P
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Re: Accidentally watched a Kiyosaki video today
Old 03-05-2007, 05:58 PM   #15
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Re: Accidentally watched a Kiyosaki video today

The way I see it, maybe 10% of the investors are smart enough to learn something profitable from Kiyosaki while 90% will come out behind or be convicted of insider training.

I would recommend someone else, such as Andrew Tobias, where 80% of his readers will come out ahead while 20% will still not get it.
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Re: Accidentally watched a Kiyosaki video today
Old 03-05-2007, 07:08 PM   #16
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Re: Accidentally watched a Kiyosaki video today

Quote:
Originally Posted by DRiP Guy
She starts from the premise that every woman in her audience has zero self esteem, zero common sense, and is nothing more than a useless clothes horse. She tells them things like "You have to get clean." And "Each of you is selling yourself, and you are doing it cheap." Holy Toledo. I don't know what this junk is, but it sure as heck is not financial advice. You can sense the discomfort of the audience as she tries to work herself through this script which is more self-help pop-psych than anything even close to financial advice. Positively horrible. She has well and truly jumped the shark!
...and she can teach you her tricks for only $365, that's ONLY $1 per day. Wouldn't you pay less than a cup of coffee per day to solve all of your lifes problems? Hurry, offer ends soon.
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Re: Accidentally watched a Kiyosaki video today
Old 03-06-2007, 11:12 AM   #17
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Re: Accidentally watched a Kiyosaki video today

what's up with this guy. this article that i found on yahoo finance is pretty silly? am i wrong? from my little knowledge i fear inflation not deflation. in fact deflation would be GREAT for me. i don't get it, am i missing something here? how could we possibly go into a deflationary environment when our national debt is so high that i am convinced we will have to start printing money. thus inflation. please forgive me for my ignorance but this article is in contradiction to the coming generational storm, which makes much more sense to me.

Posted on Monday, March 5, 2007, 3:00AM

As promised in my last article, this week I'll explain why deflation will severely punish the upper middle class. These are the people who think they're rich because their houses and stocks have gone up in value -- that is, because of inflation.

What Goes Up...

People concerned about inflation today tend to buy big houses and nice cars. They believe that the purchasing power of the dollar is going down. But what happens if cash becomes king?

This cash squeeze is already affecting many people who thought they were rich. My wife, Kim, has a friend who's a successful architect. Her husband was a manager of a good sized advertising agency. They have three children, the oldest in high school, and earn about $350,000 a year in combined income.

Because they were flush with cash, this couple purchased two high-end vacation homes, one in the mountains and one at the beach. They live most of the year in a McMansion in Phoenix.

Things were going along fine until the husband lost his biggest client. Then he lost his job, and in less than three months their savings was depleted. They then tried to sell their vacation homes, but the values had dropped below the mortgage amount. Today, they continue to pay the mortgages on their houses and hope the price of real estate will go back up. They sold one of their BMWs at a loss.

In 2005, they were net-worth millionaires. In 2007, they're facing bankruptcy.

Follow the Arrows

People like this couple aren't concerned enough about is the credit bubble bursting, which could lead to deflation. Today, nationwide savings are low and debt per household is up. Most of us know the following equation from Economics 101:

cash + credit = the economy

Ever since 2000, there's been an oversupply of credit. When the Y2K threat loomed, the Federal Reserve flooded the market with credit. After the terrorist attacks of 9/11 and the stock market downturn in 2002, the market was again flooded with easy credit. Excessive credit and lower interest rates kept the economy afloat.

It was a smart move at the time. In the first five years of his presidency, President Bush borrowed nearly a trillion dollars, more money than all of our previous 43 presidents combined, and the resulting credit bubble helped keep the stock market from collapsing entirely and led to a boom in real estate.

The problem is that this debt must be repaid. So the trillion-dollar question is, can the government, businesses, and consumers keep the credit bubble inflated? Here's that equation:

cash + ↑
credit ↑
= the economy (inflationary)

If credit is cut off or the debt can't be repaid, the equation changes to this:
cash +
↓ credit
↓ = the economy (deflationary)


Fresh-Squeezed Stocks

If the credit bubble bursts, it could trigger a short squeeze.

"Short squeeze," a trader term, is when a stock's price is high and many traders short the stock. Shorting a stock means borrowing shares from an investment house, selling them, and hoping the price of the stock drops. When the price drops, a trader buys the stock back and returns it to the investment house he borrowed it from.

For example, say XYZ stock is selling for $100 a share. A trader borrows 10 shares from the investment house and sells them for $1,000. The stock drops to $60. Now the trader buys back 10 shares from the market for $600 and returns the 10 shares to the investment house. He now has a gross profit of $400 before paying interest and fees to the investment house.

A short squeeze occurs when the market goes the other way. In this example, instead of XYZ stock dropping to $60 a share, it rises from $100 to $150. The investment house issues a margin call, which means the trader needs to return the 10 shares he borrowed.

Suddenly, all the other traders who shorted the stock need to buy shares of XYZ in order to return them. As more short traders begin buying XYZ, the price of the stock goes up and up -- from $150 to $160 to $170, for instance. This is a short squeeze in stocks. The traders who thought the price of the stock would go down are squeezed into becoming the ones who drive the price up.

Putting the Squeeze on the Economy

A short squeeze could happen with the U.S. dollar if lenders suddenly forced debtors to pay in cash.

The couple I mentioned above is technically caught in a short squeeze, since they're short of cash and long on debt. They had to sell their luxury car at a huge loss because they were desperate. As time goes on and their savings dwindles, they may become desperate enough to sell their vacation homes at huge losses.

If the credit markets bust, there could be millions of couples just like this who seemed rich but are suddenly poor. This could send the lending rate of the dollar higher, making the value of the dollar higher as well -- essentially causing a deflation.

I don't want the U.S. economy to go into a short squeeze, and I hope the credit bubble doesn't burst. Deflation isn't good, and inflation is easier to cure than deflation.

Invest in Money Smarts

My concern about deflation is best represented by the following equation:
cash +
↓ credit
↓ = the economy (recession)


If the credit bubble bursts, not only will credit disappear, but people will stop spending and start hoarding cash, and savings will increase. Money is fuel for the economy, so when credit is gone and money is in hiding, the economy slows and a recession -- or worse, a depression -- can occur. In this case, prices go down, not up, and cash becomes king.

I certainly don't want this to happen. Nonetheless, given the lack of a clear direction in markets today, a good investment for 2007 may be to pay off some high-interest debt, put a little extra cash aside, and wait for bargains. If there's a short squeeze on cash, I believe it will be short lived. Once the Fed pumps more money into the system, the dollar will continue its fall.

In conclusion, your best investment today may be in time, not money. That is, invest your time in studying, reading books, and going to seminars. I recommend you study the asset class that's high-priced today, and could be low-priced tomorrow. For example, if you want to acquire real estate, study real estate while prices are high.

And if and when the market crashes, be ready to buy.


http://finance.yahoo.com/expert/arti...chricher/25748
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Re: Accidentally watched a Kiyosaki video today
Old 03-06-2007, 11:37 AM   #18
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Re: Accidentally watched a Kiyosaki video today

All he's really saying about the inflation/deflation is that people are leveraging themselves too much into credit and illiquid investments, and that could be a problem if creditors decide to call in their debts.

I'm not sure about his analysis, but I do think the last couple of paragraphs are good advice. Whenever the market is tanking, being in a position to buy is a good thing. And the best time to have the knowledge you need for that is just before that happens so you can take advantage of the situation.

It's definitely not a FIRE/LBYM strategy, but for some people it can be a rapid wealth-building tool.

I know this is one area in which I would like to be more active, but I've been focusing so much on LBYM that my cash reserves is actually very low. I think I only carry $1k-$2k in 'free' cash at any given time (and that includes what's in money market accounts)... the rest I'm investing to make sure the money is constantly working for me.

I figure in a pinch, I can charge debt for a month or two on a couple of my cards and/or do a 0% BT until I get some cash out of some of my more illiquid investments. Of course, Kiyosaki might think I'm a bit too leveraged there...
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Re: Accidentally watched a Kiyosaki video today
Old 03-06-2007, 11:41 AM   #19
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Re: Accidentally watched a Kiyosaki video today

Kiyosaki = assclown.
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Re: Accidentally watched a Kiyosaki video today
Old 03-06-2007, 11:49 AM   #20
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Re: Accidentally watched a Kiyosaki video today

Quote:
Originally Posted by Peaceful_Warrior
Also, those who take issue with him calling a home a liability and not an asset just need to understand that he is re-defining an asset. To him, an asset brings in income. So a home on its own is a liability, but a home that rents out one of its rooms becomes an asset (even if you live in the rest just the same). That's his take on 'asset'... you may have a different one, but his definition is the cornerstone of everything else he says.
I don't like this about Mr K. "Asset" and "liability" are fundamental accounting/finance terms that have long had common definitions that are not those used by Mr. K. They traditionally are balance sheet terms, not cash flow terms. Him redefining them for his own convenience, rather than adopting the standard usage, seems to me to create unnecessary confusion and makes his judgment suspect.

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