"Getting Rich: The Poor Man's Guide"

[frayne]

I copied this from another forum and thought it was worth sharing.


"Getting Rich: The Poor Man's Guide" Community Watch
stinger96  | 05-19-06| 07:17 PM| Total Replies: 8
I received this today by email and had to reply via email. It seemed like such a disservice to the general public, especially since I usually agree with John Stossel's segments on 20/20. I'll post any reply I receive. I am an active reader (ok lurker) here and have read all the recommended books and more. Great site and thanks to the active participants. His email is in quotes below with my response following it.


"Hello.
This week's "20/20" is an hour we call "Getting Rich: The Poor Man's Guide."

Robert Kiyosaki, author of the best selling "Rich Dad, Poor Dad" empire, works with three wannabe entrepreneurs to see if he can show them how to make money.

Financial expert David Bach discusses the theme of his new book, "The Automatic Millionaire: Homeowner."

Billionaire parents can give their kids everything but how do they instill drive? Elizabeth Vargas sits down with Ivanka and Don Trump, Donald Trump's two older children, to talk about what their parents did right.

Is the brain of a millionaire entrepreneur different from the brain of a middle manager? Dr. Brian Knutson, one of few researchers in the new field of neuro-finance, is working on that.

Also you'll meet Farrah Gray, a 21-year-old entrepreneur who made his first million at age 14."





Hey John,

I love your work and first book. I usually agree with you as I am a libertarian. I have to take issue with you using 20/20 to promote a documented liar and scam artist such as Robert Kiyosaki to show people how to "get rich". http://johntreed.com/Kiyosaki.html And as for David Bach, isn't it a little late to be promoting the "hot thing" (real estate) right now? This is called "Financial Porn" (nice to look at but no redeeming value).

Why not have a serious finance program that would help the average individual outperform 95% of the current population while avoiding the Wall Street rip off? A show that exposes myths of finance that the industry puts out, such as:

1) Active funds can outperform their respective indices over the long term
2) Fund managers add value
3) Brokers have your best interest at heart
4) Individuals can outperform the market through smart stock picking
5) Young individuals have no need to hold bonds or bond mutual funds
6) It is possible to time the stock market
7) Morningstar Five Star Rated mutual funds outperform lower-rated funds going forward
8) Real estate has been a good long-term investment
9) Expense Ratios do not matter if you have a good fund
10) Diversification is not defined by holding 10-30 stocks

I realize these topics are over the head of the common man and perhaps not appropriate for a short program with a wide audience. However, I am sure they could be reworked to better suit the everyday Joe and would certainly do him more justice. At the very least it will get people thinking a bit more about their finances.

This would truly help people and it is based on academic finance studies--not unlike your usual logical way of presenting information backed up by research rather than slick marketing. How about including individuals such as John Bogle (founder of Vanguard); academics (some Nobel Prize winners) such as Fama, French, Thaler, William Sharpe, Harry Markowitz, and Burton Malkiel; and credible writers such as William Bernstein, Larry Swedroe, Jonathan Clements (WSJ) and Rick Ferri. A great resource on the internet is found at http://www.diehards.org.

Thanks for all your past and continued great work.

 

[REWahoo]

I copied this from another forum and thought it was worth sharing.

Hey John[Stossel],

I love your work and first book. I usually agree with you as I am a libertarian. I have to take issue with you using 20/20 to promote a documented liar and scam artist such as Robert Kiyosaki to show people how to "get rich".

frayne,

I saw the Kiyosaki segment on 20/20 and I thought the program made a point of how shallow his schemes were. They even interviewed him and asked point blank why his books (and the little exercise they did on the program) didn't contain real 'meat' rather than vague concepts and cheerleading.

From my point of view, I thought the program skewered Kiyosaki pretty well, but maybe I only saw what I wanted to see.

 

[unclemick]

The curmudgeon in me - makes me avoid such progams to an increasing extent as I age - to avoid pissing myself off.

A successful 'getting rich' program takes 30 seconds to one minute. 'De Gaul and the Norwegian widow. Took me thirty years trying to beat my plunka plunka DCA, low expense 500 index, time in the market. 90% of my ER stash.

The only one in my family who listened was my oldest nephew(career military). - TSP version of S&P. After ten years they are set  Unfortunately he's read that Bernstein Four Pillars crap and will sucumb to male hormones. Hopefully they won't screw up the original start.

Also what passes for investment advice on PBS drives me up the wall. Wall Street Week was entertaining years ago - until I realized with time - some people actually confused the entertainment with actual investing.

heh heh heh - now on to the second cup of coffee and I'll melow out.

 

[plattj1]

Uncle Mick2 -

Your posts are always such a tease....

Is there a publication explaining this method? While it may be clear to you, those of us unfamiliar with it do not know what you are talking about.

Everything seems easy when you already know the answer.

JP

 

[REWahoo]

Uncle Mick2 -
Is there a publication explaining this method? While it may be clear to you, those of us unfamiliar with it do not know what you are talking about.

plattj1, I'm not laughing at you, I'm laughing with you...

 

[SteveR]

I took the liberty of gluing together some older thread items by UncleMick2 in an attempt shed some light on his concept of De Gaul and the Norwegian Widow.

To unclarify: DeGaul as in Charles De Gaul - "God looks after drunkards, fools, and The United States of America". In John Bogle(Vanguard) terms - buy the total stock market index at the lowest possible cost. Hold the stock/bond ratio that fits your situation.

Further: An obscure local Pacific NW myth - Norwegians are even more thrifty and astute than a Scotsman. So since woman outlive men - the widow collects the dividends from well selected stocks - moral dividends are very, very important.


I ladder my hobby stocks- (remember I'm INTJ, left handed, 80% balanced index, and fond of De Gaul and the Norwegian widow). With that disclaimer - here's what I do.
Since 1994, using then Moody's now Mergent's Handbook of Dividend Achiever's pick four or five stocks every 1-3 years and buy using Moneypaper to get DRIP plans. I use div + div growth, long record of div and a low/no cost DRIP as pick criteria. Give them 7-10 years to compound divs/div growth and keep the ones that yield over 7% in div or total return on money invested. Sell every 1-3 years the ones that don't make the cut. Also DCA some and buy on dips - which muddies the water a little.

…my current menu of 'norwegian widow' - utilities, oils, banks, food, drug, REITS and dividend achievers.

…Meanwhile, I shall continue to read the studies put forth here and elsewhere while leaning on my four legged table (pension, dividend stocks, to be SS, and my trusty 60/40 balanced index)

 

[unclemick]

"God looks after drunkards, fools and the United States of America." - Charles De Gaul - a legendary investment guru.

Successful investing is more a matter of faith then numbers or stock picking.

Invest in the lowest expense/lowest turnover total stock market or at least the S&P 500 as early as you can as often as you can and leave it in the market as long as you can.

That's it.

Now if you wish to increase your odds of screwing up - read a lot of investment books like Bernstein's Four Pillars and such.

You 'may' increase your overall rate of return over your accumulation phase if you 'successfully' master the skill set required - or not.

The default MPT lite might be something like Vanguard Target Retirement Series - to save on reading and work.

So - when your Rock/Rap/Country singing or professional sports career takes off - DCA as much as you can - tax deferred, Roth, and even taxible during your earning years.

Then retire.

P.S. the previous posted while I was writing this.

SteveR did a good job of explaining me to to me.

heh heh heh heh heh - nowadays my big dog is VG Target Retirement 2015 with individual dividend stocks second at 75 and 15%.

 

[maddythebeagle]

Everything seems easy when you already know the answer.

hmm. maybe unclemick should have his own pbs special "pledgeathon." rather than just a brochure

 

[unclemick]

Nah!

Best to stick with my current 'front man' - Bogle. He can talk longer - some say too long.

heh heh heh heh heh heh heh heh heh heh heh heh