Dien Rice
August 29, 2013, 03:57 AM
Thanks Phil,
I don't know exactly what Robert Kiyosaki is doing now. As for me, I read a few of his books a long time ago, and played Cashflow 101 a few times.
I felt that the main benefit in "Rich Dad, Poor Dad" are Kiyosaki's definitions of an "asset" and a "liability."
From memory, Kiyosaki's definitions are:
An "asset" is something that puts money in your pocket
A "liability" is something that takes money out of your pocket.
For example, many people would consider buying a new car as purchasing an "asset." However, according to his definition, a new car is a "liability." Here's why.
One way that a new car takes money out of your pocket is through depreciation - that is, the value of the car goes down over time. After a couple of years, the value of a new car can have reduced by half!
This is a lesson my late father (who was an economist) taught me about new cars. He never bought a new car in his life - though he could afford it. He lost less money by only buying second-hand cars, since the value goes down the most when the car is new.
He once had a new car - his father (my grandfather) gave him and my mother a new car as a wedding gift. However, that was the only time in his life he ever owned a new car.
Anyway, I thought the simple lesson about assets and liabilities was a good one.
Once you know the definition, you should put as much of your money as you can into "assets," and as little as possible into "liabilities!"
I have some thoughts on Kiyosaki and his "poor Dad" too, I'll write more about that later...
- Dien
I don't know exactly what Robert Kiyosaki is doing now. As for me, I read a few of his books a long time ago, and played Cashflow 101 a few times.
I felt that the main benefit in "Rich Dad, Poor Dad" are Kiyosaki's definitions of an "asset" and a "liability."
From memory, Kiyosaki's definitions are:
An "asset" is something that puts money in your pocket
A "liability" is something that takes money out of your pocket.
For example, many people would consider buying a new car as purchasing an "asset." However, according to his definition, a new car is a "liability." Here's why.
One way that a new car takes money out of your pocket is through depreciation - that is, the value of the car goes down over time. After a couple of years, the value of a new car can have reduced by half!
This is a lesson my late father (who was an economist) taught me about new cars. He never bought a new car in his life - though he could afford it. He lost less money by only buying second-hand cars, since the value goes down the most when the car is new.
He once had a new car - his father (my grandfather) gave him and my mother a new car as a wedding gift. However, that was the only time in his life he ever owned a new car.
Anyway, I thought the simple lesson about assets and liabilities was a good one.
Once you know the definition, you should put as much of your money as you can into "assets," and as little as possible into "liabilities!"
I have some thoughts on Kiyosaki and his "poor Dad" too, I'll write more about that later...
- Dien
