Wednesday, July 31, 2013

What Are You Reading: 8 Rich Dad Scams "8 Financial Scams Disguised As Wisdom"

I was going to be doing the next few "What Are You Reading" posts about the book "Why "A" Students Works For "C" Students" but I left my signed copy on the plane when returning from Toronto. I have an other copy, although not autographed, that is currently lent out. I'm a little upset with myself for having left it behind, but I might just have changed someone's life forever, for the person who finds and reads it.

So until I get my other copy back, I decided to post about 8 Rich Dad Scams.

This is a short read and a free download on the Rich Dad website. It discusses the 8 financial scams that are disguises as wisdom.

  1. Higher Education: Basic education taught from grade K to 12 is very important for everything that will follow in life. However, a college/university education teaches you to become an employee. If you want to be rich, don't count on school.
  2. Get A Job: A job makes you work hard to make someone else rich and you will be paying the highest level of taxes. If you create jobs, and work for yourself you will get to benefit from the many tax breaks available.
  3. Work Hard: Working harder to make more money will result in you paying more taxes. Most people work hard all week looking forward to Friday, only to be depressed again on Sunday at the thought of having to go back to work.
  4. Live Below Your Means: Instead of living below your means and saying to yourself "I can't afford that", ask yourself "How can I afford that?" learn to be creative to make more money to live the life you want.
  5. Save Money: Since the currency was taken off the gold standard it no longer holds its value. Putting your money in the bank where it will lose it's value will not get you ahead.
  6. Your House Is An Asset: An asset is something that puts money into your pocket, a liability would be something that takes money out of your pocket. Based on those definition, your house is definitely a liability. In fact you should invest for cashflow not appreciation.
  7.  Get Out Of Debt: Getting out of debt means that you have reached the plateau and you will not grow any further. But there is a difference between good debt and bad debt. Good debt produces cashflow making you richer. Get into good debt.
  8. Invest Diversely In The Long Term: The problem with mutual funds, stocks and bonds is that when there is a market crash all of them crash. You are not truly diversify if all your investment is in the same vehicle such as a mutual fund.
Robert's believes we have been financially brainwashed. Our leaders do not encourage us to change or to seek ways to move from the employee mindset to the investor mindset. They teach us to live below our means.