We would like to thank Dan for his comment on our last post and his recommendation of the Book "Rich Dad, Poor Dad".
Dan, both Christine and I read this book years ago and agree it's a confidence booster and expands your knowledge and view of money.
The author, Robert Kiyosaki, reinforces a basic concept - the difference between having a big salary and building wealth.
On the other hand, Kiyosaki also has a definition of an asset versus a liability that is different from conventional accounting. Investors generally focus on accumulating assets and avoid liabilities. Simply stated, assets generate income or cash. Liabilities consume cash. Rich people accumulate assets. People who aren't rich accumulate liabilities. Some things that look like assets are actually liabilities - for example: a residence, a car, a boat. When we accumulate these things, we are not really accumulating wealth, we are consuming it. If we haven't accumulated sufficient assets and we acquire these "toy" liabilities, we are putting the cart before the horse. Instead, we should emphasize regularly acquiring stocks, bonds, tax lien certificates, rental real estate, and other investments. We also need to learn to build value and get some tax shelter by building our own business.
Christine and I agree on this principle. We each purchased used cars only one year old vs. new and saved thousands of dollars. The savings went towards stock purchases and other investments. Ladies--this means less shoes and purses. Oh yes.
Kiyosaki acknowledges that it is possible to use the principle of compound interest and regular saving to achieve financial independence. The problem with this approach is it's a long, patient one. Most people get started too late for it to make millions.
We [Blog Sisters] encourage reading and pouring through books and journals for a basic foundation, inspiration and courage to fight the evil clutches of credit card offers, to patiently dig out of debt, and to start your own path for building wealth. It's not a quick fix. Read-study-ask questions-read-study-ask questions. Repeat the cycle until you're ready to implement your new philosophy.
Read the book? Other books that made a difference? Share your comments!
Monday, October 13, 2008
Subscribe to:
Post Comments (Atom)
Posts
1 comment:
Another great book that shows how millionaires think - and acquire millions - is The Millionaire Next Door. I forget the author, sorry!
The essence of it is, they don't buy anything simply to impress - status symbols like new cars and designer fashions just don't interest them much.
According to that book, you're more apt to find them shopping at Sears than a fancy boutique. And, they could be living next door to you in a perfectly ordinary neighborhood.
Post a Comment