Quote:
Originally Posted by Isaac Zachary
I'm going to have to read the Rich Dad Poor Dad book now.
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There isn't really anything revolutionary in it. Kiyosaki's "poor dad" is his real father who is a teacher who values job security and avoids risk. He also buys toys that show his status but although he makes good money never accumulates wealth. Kiyosaki's "Rich Dad" is a friend's father who invests in real estate and takes big financial risks with borrowed money.
The basics are to know the difference between assets and liabilities and to spend money on assets. Don't buy expensive toys (like a Porsche) but instead invest in an asset - like real estate - that with time will pay for the toys.
That is the good side of the book. Then there is the "get rich quick side" of the book by investing in real estate on margin.
Kiyosaki is REALLY into real estate purchases with other people's money. Basically you should take as many and as large of loans as you can get. He preaches that you should continue to remortgage and take out any equity you build to invest in new properties.
If everything works as planned the tenants pay on time, you use that money to pay the mortgages, and have money left over to live the good life. In theory it works - in reality things don't always go as planned. Plenty of people have gone broke building a pyramid of properties on borrowed money. It only takes a few renters not playing or an unexpected expense to bring down the house of cards*.
Kiyasaki is basically to yin to Dave Ramsey's yang who says to never borrow money because the debtor is slave to the lender. The reality (at least for me) is somewhere in the middle.