Wednesday, April 19, 2006

Rich Dad = Real Estate Dad

So I went to the library, picked up Rich Dad, Poor Dad and read it over the weekend. I would have posted about it sooner, but work has been keeping me up late at night. Got a big project due Friday.

Anyway, Kiyosaki's basic message is that you need to be an owner have real financial security; you need to "Mind Your Own Business" (Lesson #3). He speaks of the need for people to gain financial knowledge, or as he refers to it, your financial IQ, and its made up of:

  • Accounting
  • Investing
  • Understanding Markets, and
  • the law

As for the skills needed to manage success, Kiyosaki writes that there are three:

  1. The management of cash flow
  2. The management of systems (including yourself and time with family)
  3. The managment of people

Kiyosaki closes the book with ten steps to get started acquiring wealth:

  1. I need a reason greater than reality
  2. I chose daily
  3. Choose friends carefully
  4. Master a formula and then learn a new one
  5. Pay yourself first
  6. Pay your brokers well
  7. Be an "indian giver"
  8. Assets buy luxuries
  9. The need for heroes
  10. Teach and you shall receive

It was an easy read and it motivates you to build your assets in a quest for financial security. While I was at the library, I also picked up a copy of Rich Dad Success Stories to read about what other people have done with the knowledge they learned from Kiyosaki. I'm almost half way through the book and I think all but one success story was about real estate. Therefore, from this day forward, I will call Rich Dad...Real Estate Dad. If you read his column regularly, like I do, you'll see that the most frequent topic is real estate.

Don't get me wrong. Real estate can clearly be a great investment. Dave Ramsey is also a big fan and it certainly seems to have worked for Kiyosaki. If you're looking for a motivational book about what buying real estate can do for you, this is a great series. However, if you're looking for an exploration of broader asset topics, you could probably do better.

I am taking Kiyosaki's advice and furthering my investor education. At my local library, they are having an Investor Education program. I'm going to give it a try. What do I have to lose?