It takes a lot of time and you have to go through a lot of bad ones. Before I had a baby, I thought the simplest way to figure out what kind of gear I would need was to read reviews on sites like Baby Gear Lab and Baby Center (if only parenting were this simple.) As ergo was consistently named one of the best carriers, I felt fortunate when my sister-in-law re-gifted me her never used ergo carrier. Unfortunately, my baby did not feel the same way. I quickly discovered why the ergo was never used by my sister-in-law. Whenever I put my baby in the ergo, he cried. Not cute little kitten squeals, but full on pterodactyl type shrieks. So desperate was my little one to escape from the ergo that he would arch his back and use his feet to launch himself off of me in some kind of deranged baby suicide attempt. There was nothing ergonomic about the ergo for my baby or I, so we moved onto the baby k’tan. I loved my baby k’tan – it was soft, comfy, easy to put on and oh so cuddly. It rem
Rich Dad Poor Dad
by Robert Kiyosaki is a personal finance book that intends to teach the reader
on how to manage your finances and to become rich.
He tells the story of him being raised by two fathers. His biological father, who was a government worker,
a well-educated individual, and an average person when it came to
finances. His other father was his
friend’s dad who was a high school drop-out (I think), an entrepreneur, and
managed to become wealthy through real estate and I believe owning a few
grocery-type of businesses.
The main concept of the book is that rich people make a
strong distinction between an asset and a liability. For example: Most people believe their
primary residence is an asset, while Kiyosaki states that your primary residence
is a liability.
Let me clarify by defining an asset and a liability. An asset is something that bring money into
your pockets. Examples of an asset are
your income, dividend payments, interest payments from your portfolio, rental
income, etc. A liability is something
that takes money out of your pockets.
Examples of this are: your bills, insurance payments, rent, mortgage
payments, etc.
So, by this definition, your primary residence is a
liability. Many would argue that your
home is not a liability because it increases in value. Well, that may be true, but it is not
guaranteed. There is a large chance that
your home, regardless of where you live, may decrease in value by the time you
are ready to sell. In the meantime, it
has costed you a great deal of money in the form of rent or a mortgage, utility
bills, insurance, and so on.
While nobody can argue that a home is a necessity, the
argument here is to shift your perspective of your home and focus your efforts
and attention to other things.
What rich parents teach their children is to accumulate
assets. Assets, as defined above, are
items that will put money into your pocket.
So, how does this apply to individuals such as ourselves?
1)
Make an effort to purchase
assets, some examples are:
o
An investment property
o
Stocks and bonds
o
Starting your own business
2)
Pay yourself first before
paying others first
o
If you must make a choice
between paying off more of your principal on your mortgage or purchasing more
stocks/bonds. The choice is to purchase
more stocks/bonds.
§
**This bullet doesn’t come
from the book** It is simple
arithmetic. On average an index fund
covering the S&P 500 will return about 4% on average (this is a
conservative estimate) over the course of a lifetime. If your mortgage rate is 3.5% then you are
still improving your situation. In
addition, the interest is deductible. If
you are in a situation where your mortgage rate is greater than what you can procure
as a return then see if you can refinance your loan.
3)
Asset and wealth
accumulation is more about modifying your behavior than anything.
o
No matter who you are, you
have a limited amount of disposable income after you have covered the necessary
costs to live and function. How you
choose to spend the remaining money will define your financial situation. The right choice is to accumulate more
assets. Similar to going to the gym,
accumulating assets is difficult and requires discipline. And, like going to the gym, you will feel a
lot better afterwards knowing that you made the right choice and are setting
yourself up to be financially healthy.
4)
Take action now
o
If you are scared or unsure
of what to do then take the time you have now to learn to make the right
decisions. Read the necessary
literature, talk to the experts to figure out the answers you need, and take
classes on what you want to learn. The
worst thing you can do is to do nothing.
Over the course of time, you will lose if you take no actions. Inflation will wither the value of your
savings if you do not place it in the right vehicles.
Overall, I found this book to be a good launching point to
developing an investment philosophy. It
is easy to read and the fact that it runs parallel to his storyline makes it
easy to digest. That being said, he
covers many other points such as taxes, foreclosures, and investments that I
did not touch base on.
In short, I recommend this book. Thank you for reading and if you have any
questions please feel free to comment or reach out!! Also please subscribe for future posts!!
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