Hello all,
I would like to share a review on this for you all. I must say the author got my attention on life and I managed to finish this book in less than 3 days. It really was an eye opener on why we must break out of this "Rat Race" of a life and start building our own financial intelligience.
Overview:
The author basically had the experience of learning from two fathers. His biological father who a renown school teacher who was able to obtain Phd's through scholarships but subsequently died poor. His other father (who was his best friends father) only went to the 8th grade and dropped out but made millions of dollars.
For most people including myself, I was always told that by going to school and getting excellent grades would allow me to land a nice paying job that will financially secure me for the rest of my life. The way schools are taught is that "We work for money". Learn the skills you need to get the job you want. (Devry University's advertising motto)
On the other hand, the author explains that Rich people have "Money work for them" and that by following the lesson above most people either Middle Class or Poor will in the end be poor.
Here are the reason's why he states: You work to make the rich richer, you are taxed heavily by the government, Fear of losing money, and because you are financially illiterate. (There are more in the book)
Most people such as I believe that our home is our greatest asset but as this book points out, it is our biggest liability because we have a mortgage, pay property tax and pay for other things necessary for our homes to be comfortable. In order for property to be our greatest asset, it must produce income. It's value may go up over time but if you manage your money wisely, you could invest in other opportunities with the money that was placed into the mortgage to make more money faster instead of paying someone else for the loan and the interest.
Good Points:
I recommends this book on the following ideas. It makes you realize why you need to become financially literate because working for someone else for that paycheck means you're stuck in that "rat race" everybody is in. To become financially stable is to be able to produce income which doesn't come from someone else but from your own personal asset.
There are many loopholes and techniques to save money from what the author is saying.
1. Start a Corporation. That way you shield yourself from lawsuits and huge taxation. (I'm currently looking into this…)
2. 1031 Exhange Form. He seem to have made alot of money by flipping homes and using this IRS form to defer capital gain taxes. He then uses this to purchase bigger property and trading them. (Definitely looking into this one…)
Points I deviate from:
When it comes to value investing, I wouldn't get my ideas from this author because he doesn't really tell you how to invest the way we do. His small stock investment sounds very speculative for instance, he purchase an oil company at 68 cents and sold it in a couple years at 3 dollars because of what he heard from his speculator of a friend. He also is a flipper in property and you know what that caused back in 2007. But the basic idea he points out is that when you have money, you have it work for you and when your financially literate your able to utilize more of the accounting practice that saves you money the middle class and the poor class don't know about.
Conclusion:
This is how I would use this book. He's a great motivator and made me open my eyes on how life is. This book will definitely motivate you on how to come up with new ideas on making money and not by the outdated "Study hard in school and find a nice decent job that will pay for life". You will not find anything useful here when it comes to value investing but You'll start to appreciate what value investing is all about. You can find value in many things if you can buy it cheap and sell it high.
I like your feedbacks. Thanks.
Home
