Apr

7

Kiyosaki’s rich dad, poor dad: a book review

Filed Under reviews | 8 Comments 

A while ago, I said that I would review Robert Kiyosaki’s book Rich Dad, Poor Dad. I’ve been a little snowed under recently, so this book review is coming out later than I’d have liked. Never mind.

It’s difficult to exactly describe this book. It’s subitled What the Rich Teach Their Kids About Money - That the Poor and Middle Class Do Not! It’s portrayed as being loosely anecdotal, with Kiyosaki and his friend Mike being educated in how to be rich by Mike’s father - the Rich Dad of the book’s title (Kiyosaki’s own father is Poor Dad). Ostensibly Rich Dad is grooming Mike to take over his Hawaiian business empire, and Kiyosaki goes along for the ride.

Rich Dad’s advice is to concentrate on ‘minding your own business’. Buy assets that generate income, learn how to run a business, incorporate and you will be rich. On top of that Kiyosaki’s advice is to invest in real estate (don’t forget to use some weird American tax exchange thing-y!), don’t bother to diversify, go to seminars, learn about sales, and don’t be afraid of failure.

Lots of things about this book annoyed me. Some of the advice is dangerous, including the dismissal of diversification, the reliance on real estate investing, and the flexible approach to insider trading, and tax law.

Despite saying that you shouldn’t be reliant on tax laws to make money, many of the suggestions are reliant on US tax laws which becomes even more obvious when you live in a different tax system. Kiyosaki overstates the benefits of incorporation for sheltering your income from tax, saying that it’s the way to protect income from taxation by deducting expenses before paying tax.

If you look on plonkee money, you can probably guess that I make money from advertising. I’m not incorporated (the US equivalent of registering as a limited company) but self-employed, and I can still deduct legitimate expenses (like web-hosting, or book purchases for reviews) before tax. There are benefits to incorporating, but they are mostly not tax related.

Another problem I have is that Kiyosaki’s strategies are all risky. This risk isn’t mentioned explicitly, is rarely mentioned implicitly, and he belittles people who want to go the slow and steady route. Whilst, in real life, you may indeed want to go for a high risk strategy, you should never do so without understanding what is involved and what you stand to lose, as well as gain.

The problems I have with the book that I’ve mentioned above mean that I would not give this book to a personal finance novice. I’d be afraid that they would unwittingly break the law, or waste a good deal of money chasing after Kiyosaki’s ideas, buying into deals that are too good to be true.

I would not give this book to someone interested in personal finance, because it doesn’t say anything. In fact that’s the reason that I dislike this book the most. Really, and truly, Kiyosaki spends the entire 200 pages exaggerating, skimming over details, and advertising his own products. There are no actionable points, but you are left with the impression that if you just bought another Kiyosaki book, that would hold the key to how to be as rich as he is. That’s a great sales tactic, but I bet it’s one that he repeats over and over.

Do not bother to buy this book. Fortunately, I won my copy and didn’t pay a penny for it. I’m at least the third owner of this book. If anyone else would like to be the fourth, I’m giving it away to the first person that contacts me with their postal address (put rich dad, poor dad in the subject line). Rob Lewis @ moneywatch.co.uk has claimed the book, you’ll have to get your own copy if you want to read it. Maybe he’ll share what he thinks of it?

Apr

3

how should I cure my dissatisfaction?

Filed Under philosophical | 25 Comments 

urban sympathyI have a growing feeling of dissatisfaction.

One of the problems is that although I got a substantial 8% payrise after my last review (thanks again folks, I am genuinely pleased with this) I didn’t get a promotion. Not only did I not get a promotion, but two people who I consider my peers were promoted. They weren’t promoted to the level above me, but the level above that. I know, I know, I shouldn’t compare myself, but it’s difficult not to.

I really enjoy what I do most days, I love the field that I work in, I love working with intelligent people, both within my own company, and other organisations. In the last year though, I’ve only been challenged by about half my workload. Whatever I decide, I need to stretch and grow.

I’m not sure that I want to get a new job quite yet. There are some new challenges coming up at work in the next six months, so I’ll probably see how it goes for a bit. But I’m keeping a more open eye on the job adverts that are going out.

Another problem that I have is not having enough friends. Actually, that’s not true, I’ve got some really good friends, it’s just that in the last couple of years nearly all of them have moved away. I catch up with various people pretty often, but I don’t know anyone (apart from colleagues) to do anything spontaneously with.

I’ve also got quite a few new friends that are local, who I’ve met in the last year or two. I really enjoy their company, but I don’t know them that well. And most of them have kids, so are too busy to hang out with. Lots of shallow rooted friendships just isn’t as good (to me) as a couple of really deep ones. I hope some of these friendships will probably grow in time, but that’s cold comfort today.

It sounds like I’m moaning about how bad my life is. And really I shouldn’t, there’s just a little niggling feeling of dissatisfaction that I want to get rid of in a good way.

Does anyone have any suggestions?

Image by slopjop 

Apr

2

frugal travel accomodation: the joys of hostelling

Filed Under frugal | 11 Comments 

hostel signWhen I travel abroad, I nearly always stay in a Youth Hostel. The first reason that I stay there is because they are inexpensive, ranging in price from say $5 to $50 a night, depending on your location,  anywhere  in the world.

the benefits

For that money you’ll get a bed in a dorm, and a shared bathroom. You’ll also get to meet other like-minded budget travellers. They are generally an entertaining bunch of people who have just come from where you are going next, and can be keen to enjoy a chat.

Hostels are great places to find all the information you need to enjoy a budget trip. There are details on cheaper excursions, and day trips. Staff are used to travellers without a lot of cash and can get them in on the best deals. On my trips, my friends and I have saved money on Maori cultural trips in New Zealand, buses to Niagara Falls in Canada, surfing lessons in Australia, and boat trips in Slovakia.

Other advantages often include a place to do laundry (helpful if you are packing light), a kitchen so that you could save money on food, and free or inexpensive internet access. Some places have had bars, comfortable shared living rooms with TVs, bikes to borrow and free food. I’ve stayed at a hostel with a hot tub, one with a goth club downstairs, and even one with a pet 2m long crocodile.

you may not know

These days, not all hostels have bunk beds, chores and curfews. In fact, hardly any have chores, although you’re likely to be expected to make your own bed, and clean up after yourself in the kitchen. Some hostels still have curfews - you may be locked out during the day and shut in at night - but these are less frequent, especially with an independent hotel. Although many hostels do have bunk beds, I spent 3 weeks in New Zealand only using hostels with proper beds, and they’re becoming more common elsewhere.

If you don’t want to share a room with strangers, many hostels have smaller rooms that can be booked out for small groups of friends, family rooms, and also regular doubles and singles. These may or may not be en suite, but they are generally inexpensive, and you have the same access to the great facilities and easy to make friends as people in dorms.

what do you think?

As you can tell, I’m a hostel fan. The first one I ever stayed in was in New York in 2000, and the last one was in Washington DC when I was over there last November/December.

Whether you’ve stayed in hostels, or you haven’t considered it before, let me know what you think in the comments. 

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