Cashflow Quadrant: Rich Dad's Guide to Financial Freedom

List Price: $17.95 Amazon.com Price: $12.57

• Media: Paperback
• Publisher: Warner Books (01 April, 2000)
• ISBN: 0446677477
• Average Customer Review: Based on 187 reviews.
• Amazon.com Sales Rank: 120
  

The authors do make some good points (and then repeat them ad nauseum): 1) Rich folks don't have jobs 2) Rich folks aren't worried about security and 3) they pay less tax by using corporations. The thesis here may seem obvious, but he spends a great deal of energy convincing you.

If you're an "employee" or "self-employed," plan on being offended because you're apparently too uninitiated to know the difference between an asset and a liability--don't worry, he'll explain it again and again and again. But not technically, just approximately and slowly and with very large pictures. If you know anything about accounting (I'm a Director of Finance), you'll be put off--The book transmogrifies the meaning of simple accounting terms while attempting to provide "financial literacy." (See how the authors describe a home as a liability with no mention of equity or non-monetary value of ownership).

Unfortunately, there are some basically good ideas here buried in a lot of silliness. If you want financial literacy, go to school or buy some technical books on financial analysis and accounting. If you want motivation seek books by Anthony Robbins or Steven Covey. If you want smart information on buying distressed properties try Goldmining in Foreclosures by Achenbach and for investing try the "Motley Fool" investment site...where you'll find a list of investment resources.

I would suggest reading everything you can to assist you in your struggle for wealth, but this reasource is not that valuable in a world of limited time and attention.


Throw out the misconceptions and think for yourself.

Naturally, someone who has bought into the whole home "ownership" myth would have a lot vested in boo-hooing this book (or CD in my case). It takes a strong ego to realize that THE BANK owns most of your homes. THE BANK owns many of your cars. These things draw money AWAY from you and are, by definition, liabilities. Not until you sell them, (and only when you sell them) and produce a positive cash balance are they "assets."

Simple concept; money comes in = asset, money goes out = liability.

This CD explains, in simple terms, how the banking system and the government's tax scheme owns you...unless you change the way you think. There are no "get rich quick" ideas contained on the CDs and the ideas are not for the weak of heart or stubborn minded. That's o.k. though. As long as there are plenty of people to ignore this "cashflow quadrant" concept, there will continue to be opportunities for those few who adopt this method.

I have begun adopting this approach to our businesses (JLilly.com) and our wealth has started growing.


Financial Common Sense We Should All Know

It is true that Kiyosaki's books repeat the same general theme, but it is the brute simplicity of his message that make these books both powerful, and popular.

To be wealthy:

1) There are many ways to earn money, but to be wealthy you cannot work for money. You must have the money work for you; you have to be a business owner (B) who owns assets than make money or an investor (I) who invests in those assets. If you are an employee or self-employed specialist, there is a limit to your income because there are only 24 hours in a day.

2) Become financially literate. Have a basic understanding of how assets create income, and liabilities create expenses. Then, simply collect assets.

3) Once financially literate, hire the best advisors who can help you to play the game. Don't penny pinch on financial advice; good advisors will pay for themselves.

4) Don't let the government needlessly take your money (Earn -tax then spend). Start a corporation and legally pay taxes after expenses (Earn - spend then tax).

4) Start small and learn from your mistakes. "The only difference between a rich person and a poor person is what they do in their spare time." (page 65)

5) Become a sophisticated investors who is willing to take educated risks. "True investors make more money in bad markets" (page 64)

6) Don't take on debt that will not take care of itself. If you take risk, make sure you get paid for it, just like banks do.

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