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The Silver Lining

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October 24, 2008 – Comments (2)

The current financial crisis is having many good side effects.

People are learning that the “Rich Dad” guy is totally wrong. The road to riches is NOT flipping properties. The correct road to wealth is a lifetime of full time employment and hard work, a frugal lifestyle, and saving as much as you can for your retirement.

Orman has a concept of “chicken money”. I agree 100%, and everyone should have some.

Banks are dramatically cutting back on credit card limits, and, mucho importante, consumers are drastically cutting back on plastic spending that they cannot really afford.

People are pulling out $$$ all over the place, and getting into the habit of saving and sticking the $$$ into a local bank CD. Kudos to those who do this.

People are buying homes, but only those who can genuinely afford them. C’mon: if you cannot afford to buy a house, this is not the end of the world. Rent an apt. and be happy. Seriously: this is what I do.

 

2 Comments – Post Your Own

#1) On October 25, 2008 at 10:54 AM, vtBrunson (51.20) wrote:

+1 on the "Rich Dad" comments... I used to believe that baloney too (that guy makes money off books, seminars, and $400 board games...not real estate or 5000% ROI investments... gimme a break)

Sorry, but I gotta give you a -1 on the Orman comments, she's a wacko who thinks your whole world revolves around keeping a good credit rating (meanwhile companies like Fair Issac and ChoicePoint (now RUK) throw money at her for saying so... check out the movie "Maxed Out".

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#2) On October 25, 2008 at 11:54 AM, kdakota630 (29.74) wrote:

I think both you guys are off base on your criticism of Robert Kiyosaki, at least his core principles.

First, he's not about "flipping properties."  He will sell a property for a profit if it warrants it, but mostly he preaches buying properties that are a good value.

Second, he never told people that they had to make their money in real estate.  He said to invest in areas that you're comfortable with.  In his case, that happened to be real estate.  There is always risk associated with investing, but the more you learn about that area of investment, the more you minimize the risk.  He does point to why he thinks real estate is the best route.

Third, his biggest idea is about generating a passive income, usually through renting properties.  Once you've generated a large enough passive income, you can choose not to work.

And fourth, he preaches to people to live frugally and within their means, buying assets instead of liabilities which is good advice for pretty much anyone, especially now.

To say he's "totally wrong" misses the mark.  Obviously it worked for him.

Let me put this another way...

I work in the nutrition business, and have my own sports supplement store.  People ask me all the time how to lose weight.  There isn't one way to lose weight, or one diet to follow.  Most diets work, usually it's just a matter of finding one that works for you.

For example, low carb diets work, but if you love eating bread, potatoes and pasta, it's not going to work for you.

I'm not a big fan of Richard Simmons, but what he teaches has helped a lot of fat people.  Following what he teaches is going to help you lose weight, but isn't exactly designed to get you onstage in a bodybuilding show or get yourself a six-pack of abs if that's what your goal is.

Someone trying to follow Robert Kiyosaki by investing in real estate right now is certainly going to have a rough time, but I wouldn't exactly write the guy off, either.  In fact, with all the distressed properties out there I'm willing to bet that he's salivating at the opportunity to pick up a lot of them dirt cheap when the time is right.

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