Any book list that includes Rich Dad, Poor Dad needs a giant asterisk emblazoned on it.
“Rich Dad” was made up. He does not exist. The author lied about that as well as his own financial acumen - he makes his money from $45,000 seminars promising riches and seldom, if ever, delivering.
Oh, and his company filed for bankruptcy last month.
However, one thing that is actually valuable from the book: The cash flow for rich people vs. everybody else. The idea is to own assets that generate cash. This cash (and only this) should be used to buy luxury stuff.
But of course, you don't need a whole book for this idea.
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I add another "red flag" for such a list: "The Richest Man in Babylon". This is easily the most overrated book I have ever read. There is only one idea in the entire book and stretched over 100 pages or so: Reinvest 10% of your income.
That's it. There is literally nothing else in this book. There are like 5 stories or so set in a middle-age arabian setting or whatever about people who do exactly this. Invest 10% of their income, favorably in stuff they understand.
It doesn't go any deeper, nothing concrete, nothing helpful.
I read this book when I was younger, keenly interested in how he managed to bootstrap himself into enough capital to really get started investing.
I was rather disappointed that his actual approach, when he got to it, was to snipe mortgage foreclosure auctions and then immediately flip the houses for instant profit. Maybe it's legal but this seems scummy as hell to me. I'd be happy if it turned out to be fiction.
> That's it. There is literally nothing else in this book. There are like 5 stories or so set in a middle-age arabian setting or whatever about people who do exactly this. Invest 10% of their income, favorably in stuff they understand.
Unfortunately, you'd be surprised at the sheer number of people for whom this isn't common sense and need to read this.
I think I must be one of those people. I wouldn't even know where to start to "invest 10% of my income favourably in stuff I understand." What does that mean? Examples?
It means:
1. Consistently be investing some amount of your income (eg: Dollar Cost Averaging is a good strategy). Put some money in an investment vehicle every pay cycle or month.
2. When choosing something to invest in, don't rely on blind luck. Look into index funds and understand how they work (youtube, investopedia etc.) If you don't understand various industries and how they make money, pick a total market index and invest there.
3. If you do have an interest in say, biotech, pets, tech companies, you can independently invest in those.
The critical al thing here is to not just invest because you think something is cool. Do your due diligence and learn how those companies make money and what their outlooks are.
Real Estate is another area of potential investment but you should only do that if the math works out in your favor. Not just the mortgage but factor in repair costs, property taxes, expected appreciation and make sure you're coming out ahead if it is an invest area.
I'm in an European Union country. Personally, I've given up on even trying to invest when I saw all the strings attached.
The bank I use has a service allowing you to put money in their investment funds, configured for different risk profiles.
You need to pay some fees to opt in. There seems to be an already paid yearly(?) fee when you opt in, but you probably need to pay yearly to keep the money in the system. When you decide to cash out, you have to pay income tax.
In conclusion, from my money, the bank needs to be paid, the state needs to be paid, and I doubt their 6% (assuming this is true) yearly return rate is going to net me anything than a loss unless I pump some 6 digit sum right off the bat and leave it there for decades.
I don't really understand your point. Yes, it is more complicated than simply putting money in a bank account and gain a minimum interest rate.
However, it's relatively straight-forward. Not sure about your particular bank, but many banks offer some automatic payments. You simply pay monthly to acquire shares of an ETF. Of course, this costs money, because every transaction on a stock exchange costs money. But generally, this share is yours and the bank keeps it for you. Usually, you can cancel the saving plans and get to keep the shares.
This already is so much easier than private retirement insurances and stuff like that where cancelling a contract comes with hefty fees.
And yes, if you make money on financial assets, you have to pay tax on the returns. This is even the case for the little interest on your bank account. Fortunately, the first 801€ (in Germany) are tax-free and also, the bank handles all of this for you.
I'd argue: If you read about this stuff for 1-2 hours, you know enough about the system and nowadays, it is way easier to do any of this than at any other point in the past.
> and I doubt their 6% (assuming this is true) yearly return rate is going to net me anything than a loss unless I pump some 6 digit sum right off the bat and leave it there for decades.
Well, 6% is the past performance and yes, this doesn't mean that it'll give you the same returns in the future. But generally speaking, it doesn't matter if you put in a 6 digit sum all at once now or acquire shares over the next 20 years.
The only general rule of thumb is: You shouldn't treat this money as a saving account. Don't expect to have access to this money whenever you want, because if you need the money RIGHT NOW, you might be forced to sell your shares at a loss.
Yeah, same. I'm in a position where I could easily put aside 10% of my income for something, but what does it even mean to "invest 10%"?? Like, into what? Where? Through whom?
Invest 10%, what does it mean? Depends. For most people, this would be in stocks. Since most people don't want to have any effort with this, it would be an ETF that reflects a broad market index such as MSCI World or Vanguard.
Through what? A bank with a broker. Some offer you to save money automatically and invest it into an ETF such as Vanguard.
I would add that any book list that includes a Russell Brand product is bound to be a controversial list - and not in the intellectual sense. I am not quite sure what is he famous for, but I've seen him on TV more than I wanted to and he doesn't seem like a guy you want to take advice from.
I thought the same until he came and did a comic show/talk about addiction (for a local charity). He is incredibly bright, very interesting to listen to, a great story teller, far from full of himself, and yeah.. he's a great comedian (him being typecast as a drunk/high idiot in mainstream movies didn't do him justice.. he's been sober 17 years)
Hehe. Sounds a lot like those "we retired at 30!" folks you hear about every so often.
No, you didn't, you put away enough to enable you to make a career switch to lifestyle-blogging and speech-giving, which you're making a ton of cash with.
It's great you found a way to do what you enjoy, but it's not retirement, you're still working for money.
As someone who had little investment knowledge acumen "Cashflow Quadrant" was an eye opener and game changer. It was the only book from Kiyosaki that I read and it was sufficient for me to look at the world differently.
It doesn't give you any answers but, if you are willing, it will set in you in a different mindset that will help to approach your financial decisions from different perspective.
Either this book or "Fastlane Millionaire" by MJ DeMarco.
Well, the ideas outlined there were very worthwhile... for 1970's USA. Have no relation to reality nowadays. Tax system and interest rates are totally different.
It's very consciously engineered to work like that. These books and courses are crass but effective marketing funnels, designed to select those who will continue to pay increasingly improbable sums for access to increasingly "exclusive" information.
Same with other self-help authors, isn‘t it? Take Brian Tracy (not saying he is a charlatan!). Superficially repeating same ideas over and over again, publishing half a dozen books a year with the same ideas.
I've read a couple; they come across as engagingly written "just so" stories, lacking research or evidence. Fun to read and fun to think about, but that's all - a bit of fun.
Which is by no means a bad thing; there's a lot to be said for reading a fun book and thinking about it.
I don't see how that's differnt from Malcolm Gladwell's books. Yes when we read them the ideas feal on the border of speculation, but they are interesting, they help us stretch our minds and see things from differnt perspective. Even when we disagree with some conclusions, this help us define our own understanding on the prbolems discussed.
BTW some of Paul Graham's essays have the similar impact on me, sometimes I don't agree with his way of thinking, but still find them very insightful.
And exactly because of that it makes the book useful to read, so that you can notice and identify sociopathic techniques, and decide how to deal with them. I feel the same way about certain sales books I've read, being conscious of the techniques takes away much of the power those techniques have, and allows you to make rational decisions without being swayed.
It is only negative if you choose to do negative things with it. It gives plenty of insights on human nature. If you choose to do bad things it is not because of this book.
“Rich Dad” was made up. He does not exist. The author lied about that as well as his own financial acumen - he makes his money from $45,000 seminars promising riches and seldom, if ever, delivering.
Oh, and his company filed for bankruptcy last month.