Customer Reviews

Rich Dad's Who Took My Money?: Why Slow Investors Lose and Fast Money Wins!

5 star:		(10)
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3 star:		(5)
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1 star:		(10)

 

 

People either love Kiyosaki or think he's a charlatan. This isn't his best book but its a solid addition to the series. I'd rank 3rd below "Rich dad, Poor Dad" and "Cashflow Quadrant". More than in any other of his books he gets into HOW to get rich. But this isn't the best part of the book. The best part is the first part which explains why 401Ks can be lousy investments.

I started contributing to a a tax defered annuity seven years ago. I noticed that seven years late there is LESS money in it than I contributed to it. Ditto for my pension fund. Kiyosaki goes over the reasons 401Ks and similar defered accounts may not be good investments:

1) They aren't guaranteed.

2) a 5% or 10% return is actually pretty lousy.

3) 401Ks are TAX DEFERED, which means you actually pay MORE taxes when you retire, assuming you made money.

4) The standard lines about the stock market going up an average of (insert %) per year is a sales pitch. Some companies go out of business and the Dow can flatline for a decade or more.

Kiysaki then explains a phenomenon which even his detractors have to admit is true: people tend to think 401Ks and mutual funds are SAFER investments than business and real estate. Try going to your bank and asking for a 100k loan to buy a piece of income-producing real estate. If you have good credit the answer will likely be "yes". Now try borrowing 100k to buy a mutal fund. The bank's answer will be laughter. That's because mutual funds are DANGEROUS!

Kiysaki's answer is to start your own business, use the proceeds to invest in income producing real estate and invest the cash flow into paper and other assets. This is the same as what Warren Buffet does. It's not easy but in the long run its safer and potentially more profitable.

Now, I wouldn't recommend anyone to stop contributing to a 401K. Especially novice investors in their early 20s. But for people who already own their own business or a piece of income producing real estate, this book gives you a lot more options.

Another fascinating thing he points out that's true: workers stealing money from themselves. I've been reading the financial pages for this week (June 6, 2005) and read the news that GM will lay off 25,000 workers. The stock, of course, jumped up in anticipation of higher earnings. A large number of those workers probably have some of their 401K money invested in GM. So their retirement money will be determined by the stock going up, BUT THAT NECCESSITATES FIRING WORKERS! Who took their money? THEY TOOK THEIR OWN MONEY! That's a problem with profit sharing I haven't heard anyone but Kiyosaki articulate. But if you think about it, it's probably true.

Lastly, even some of positive reviews for this book say that Kiysaki advocates purchasing real estate. This isn't entirely accurate. He advocates starting a part time business and trying to grow it and THEN investing cash flow into INCOME PRODUCING real estate. The current real estate mania is being fueled by speculators who are trying to "flip" properties. That's not investing! And Kiysaki doesn't condone it. He's talking about buying houses than can be rented and will produce a few hundred dollars cash flow above and beyond their expenses. He warns not to bank on appreciation. That's just an added bonus.

So read this book with an open mind. Although the prose style is simple, it can make (or save) you a lot of money. It did for me.

...his last three books, BUT this was on the "money". "Who Took My Money" is Kiyosaki's best book by far since "Retire Young, Retire Rich". His last three books were good, but not like the top tier Rich Dad Books in my opinion (Rich Dad, Poor Dad; Cashflow Quadrant; Guide to Investing; Retire Young, Retire Rich and now Who Took My Money).

I was starting to get soooo bored with his material, based on his last few books(Prophecy had a good subject, but I was going to sleep; Success Stories had too many real estate stories, but needed other business stories without real estate, and an options success story would have been nice too. I was happy for the individuals in the book, but wanted more; Guide to Becoming Rich was a great overview of the Rich Dad principles, but let's be honest people, it was a bit redundant), I went to the library first to check this book out, that way if it was disappointing, I would not have to slam it in a review. I like this book so much, that after I returned it to the library I decided to purchase my own copy for reference.

The good thing is I was already moving in the right direction in terms of accelerating my money. This book clarifies that I am doing the right thing. It also reinforces what Kiyosaki has said for a long time: DO WHAT IS BEST FOR YOU! There are some Rich Dad followers (idiots in my opinion) who think everybody who reads the Rich Dad books, should immediately go into real estate, and that is not right. These individuals do not respect their fellow Rich Dad readers dreams, because they think they know everything. If someone wants to go into real estate good for them, but for me at this time, I am concentrating on creating my own businesses (other than real estate), options trading and intellectual property. I plan on investing in real estate in a few years. This is definitely a book people should check out and read, but read the first three Rich Dad books and "Retire Young, Retire Rich" first, before you read this one, you will be glad you did! For the simple fact it will prepare your mindset to accelerate your money!!!

Finally, Robert Kiyosaki gets around and communicate somewhat clearly and concretely, ways to attain financial success. The writing here is still awkward and repetitive, but at least, there's Sharon Lechter to summarize his points in a clear and straightforward manner. You'll get around understanding what Kiyosaki says by the end of each chapter.

Questions on his credibility aside, this book is much more helpful than most of his previous books, which tend to be redundant and circuitious. It shows how you can accelerate your finances by using good debt, leveraging it to other assets so you can create income pipelines. Although some people say his methods are very risky (which being a sole income provider, I wholeheartedly agree), the book opened my mind on methods possible to attain wealth. I may temper Kiyosaki's approach but his book has truly made me aware of the possibilities of attaining a secure and prosperous tomorrow without waiting too long.

Now, if only he allows the editor to improve his writing...

I have about 8-books by Kiyosaki, and find they all add to my financial perspective. What I liked the most about this book is his discussion between a capital gains investor and a cashflow investor. Most average investors are capital gains investors, but successful investors are cashflow investors.

Although I like the Kiyosaki books, I give it only 3-stars because when I finished the book, I'm left with "that sounds great, so how do I do it??" Well, I found some great answers in Van Tharp's new book "Safe Strategies for Financial Freedom". Van Tharp was a fan of Kiyosaki, and his influence is obvious. But Van Tharp finally reveals exactly how to get some investment/passive income from some experts.

If you're sick and tired of working harder and harder and not getting anywhere, begin to educate yourself on how you can improve your financial position. If you don't think that things have become that bad, then just consider the fact that the average annual salary of an American worker increased only 10%, from $32,522 to $35,864, during the nearly 30 years between 1970 and 1999, while that of the "Fortune 100" top American CEOs has increased 2800%, from $1.3 million to $37.5 million, during the same time period.

In this ninth installment of the Rich Dad Series, Kiyosaki addresses the issue of which specific investment vehicles people should invest their money in. The need for such information remains greater than ever. Millions of investors lost nearly 9 trillion dollars during the stock market crash that lasted from 2000 to 2003. This marked one of the greatest wealth transfers ever. Remarking on this cataclysmic event, Kiyosaki writes, "The question is, How can so many millions of people be deluded into the idea that losing money every month, for years on end, without a money-back guarantee or insurance against catastrophic loss can be considered smart investing? It has to be one of the biggest mass sales jobs in the history of the world...a sales job that could only occur with a financially naïve population (203)." The answer of course is greater financial literacy. For example, many of those stock investors who lost money in the market may have avoided the misfortune if they had seen the graph illustrated below.

The primary reason why real estate values have appreciated more than the S&P during the ten years between 1992 and 2002 is largely attributable to the power of leverage and the fact that real estate is indexed for inflation while the S&P is not. While Kiyosaki favors real estate he acknowledges that to be truly rich one must invest in at least two asset classes. He specifically recommends building business and reinvesting its profits for growth. Excess profits should be held temporarily in paper until a suitable piece of real estate can be found. Real estate provides some additional benefits over the other asset classes including financial leverage and the right to take full depreciation and appreciation of the asset. But perhaps most importantly, Kiyosaki writes, "Success in real estate depends upon you as the investor. Success in the S&P depends upon the S&P 500 companies" (xiv). Seeking to retain maximum control over your asset remains one of the cardinal rules of investing.

The secret to Rich Dad's formula for ultra-high returns lies in your ability to achieve financial synergy by integrating the three asset classes (i.e. business, real estate, and paper) with financial accelerators such as OPM, OPT, tax laws, and corporate laws. The mind of a rich person operates, as opposed to that of the poor and middle class. According to Kiyosaki, "...successful investors integrate two or three of the asset classes, and then accelerate, leverage, and protect the cash flowing through the assets...The point is, an investor could own a small business and also invest in real estate" (xv).

Perhaps most importantly Kiyosaki tries to convince us that the pursuit of cashflow, as opposed to capital gains, should be the primary goal of any investor. In regards to cash flow, Kiyosaki believes that your most powerful tool is your imagination, "see if you can see potential value they cannot see. In my opinion, this is the best way to get rich" (225). In fact, most investors, such as with the stock market, fail because they do not use their imagination and are focused exclusively on elusive capital gains.

If you have been listening to typical financial planners over the last three years, then you were one of the millions that lost nearly $10 trillion! I don't know about you, but I don't like to lose money.

Obviously the review written just ahead of mine was by a financial planner. Financial planners are just like brokers, that is, they cause you to become broker with their advice. The best financial planner you will ever have is the one who looks back at you in the mirror. If you give up your investments to financial planners, advisors, brokers etc. you will end up a financial loser.

Robert Kiyosaki has once again written an excellent book with advice that really works. What these "investment people" always neglect to mention is that Kiyosaki's advice has been right on all along. He predicted the crash of 2000 in his earlier book Rich Dad's Guide To Investing. What were investment advisors, financial planners and brokers telling everybody to do? That's right "buy and hold", (more like buy and pray that your investments will someday get back to where they were 3-4 years ago) "diversify" (put your eggs in many baskets and have many baskets of crushed eggs), "dollar cost average" (more like average down) and so on.

If you had listened to Kiyosaki as I did and many others, you would have been out of risky stocks and had your money in other equities that provided huge returns.

Ifyou are a serious investor, then I highly recommend this book along with Rich Dad's Guide To Investing and Rich Dad's Prophecy. Kiyosaki and his Rich Dad have been right so far and I would bet on him continuing to be right again.

Of course you could listen to a financial planner, advisor or broker and end up broker and perhaps join others and lose another $10 trillion.... again with their "professional" advice.

Good book RTK. Keep em coming.

Once again, there is a lack of specific detail in this book. The author acknowleges this and claims that his way won't work for you and each individual should find their own way to get rich-with just a handful of overly generalized comments from rich dad to guide them. If it were really that simply, everyone would be rich.

His rich dad taught him what a bad idea it was to invest $15 a month in a mutual fund when he was 18. That's bad advice, if he had invested that trivial amount (about the cost of his book) from then (1965) until today he would have a total of over $66,000 at age 58 (assuming a 9% annual return which is pretty reasonable for this time period). If he continued to age 65, it would be worth over $120,000. If he started as he described, but increased his monthly contribution to $100 when he reached age 30 as a mature working adult, it would currently be worth over $190,000 and if he continued to age 65, over $360,000. This isn't exciting, it's not sexy, it's not anything to get pumped up about, but it's a solid plan that can be validated over almost any historical period of the last century to provide a respectable nest egg for retirement.

He also flipantly mentions that when he can't find a good business deal or real estate deal, he puts his money into a hedge fund earning 25% per year. In his own words-"Will you guarantee that?" Check Jack Schwager's Market Wizards books, he interviews the best fund managers in the world-almost none of which have consistently produced 25% a year. A consistent return at this level would put a hedge fund manager in the top 1%. How PRECISELY does he identify this 1 in 100 winner in advance? Does this fund accept contributions of less than 6 figures which the average person could use? (not likely). He also mentions putting his money into a fast moving stock. How PRECISELY does he pick fast moving stocks? In his own words-"What is his exit strategy". In other words, Enron was a fast moving stock, both up and down. How PRECISELY does he determine when to exit a fast moving stock before a nose-dive like Enron. He also mentions occasionally temporarily putting money in a tax-free bond when his preferred opportunites aren't available, earning at least 7%. Seen a 7% tax-free bond lately? Where PRECISELY does he find such a bond, particularly with a short maturity (gotta keep that money moving).

Rich Dad, Poor Dad has some reasonable ideas about trying to develop assets that generate cash flow. This is a great principle and the author is very motivational. But the substance is just lacking-how PRECISELY does one acquire assets? The author claims mainly through buying real estate that is such a great deal you can easily turn it over in a few short years for several hundred % profit and then repeat the process. If you read the Millionaire Mind, a legitimate study of authentic American millionaires, you'll find most of them acquired assets by good old-fashioned American hard work, savings, and investment for the long-term. Take some inspiration from this and the author's other books, maybe take a long-shot at a great deal that will let you rapidly acquire a large amount of assets-but first and foremost-do the boring, sensible things like contributing to a tax-defered IRA that will ensure your future.

I really like Robert's writing style and I have only read rich dad poor dad and loved the book and started reading all different types of personal financing books. One of the things I was certain about was that he was going to go on and on and on about real estate. I understand that he thinks real estate is great and everything and I agree, but I would like to see other things. He does shed some light on hedge funds.

The one thing I can say is that his examples in his rich dad poor dad book was over exaggerated. This book has good examples about real estate and other things, but what he compares it to is unrealistic. One example is that he compares investing real estate to mutual funds and even thought he example was good, he compared a mutual fund that returned 5% a year. His example would have been more realistic if he would have compared it to a return of anywhere from 8-12%, but 5% is beyond exaggerated for an average mutual fund.

The one thing I really like about Robert is that he's about money that never ends coming in. One example say you bought a house for 100k that was worth 140k a lot of people would just sell the house to make the 40k profit and what for? While you could rent out that house for the rest of your life with a cash flow that will be way more than 40k. In 10 years you'll have way more than 40k in equity/appreciation and your cash flow will keep increasing. I guess its' the reason that he explains the rich think differently from the middle/poor class. The middle/poor class want the money right now without putting the money into another asset

The good news is that this book is the next progression in the Rich Dad series. There are key elements discussed in how to move beyond the "average investing" that simple financial planners promote.

If you listen to any financial planner, you'll have to work hard until age 70, and if you have "invested wisely", your income will only drop by 30% until you die. In sharp contrast, Kiyosaki lays a plan for you to build passive income so that you can retire as soon as possible.

The problem with this book (and all the others written by Robert), is that 1) He gets easily distracted by off-point stories and points. 2) He repeats far too much of his prior material that isn't necessary. 3) After all this fluff, the last part of the book is the most important and has the fewest details.

A few good points are 1) The worst investments are the easiest to buy, and go to lazy/impatient investors. 2) Risky investments can only be made by uneducated investors. 3) The most important question to ask of an investment sales proposal is "will you guarantee it"? And 4) The difference between a wreckless gambler and a successful investor is = capital gains (gambler - easy to do) vs. cashflow (investor - hard to do).

This is the best Rich Dad book to date. The book is filled with priceless information that 90% of people in the U.S.(particularly baby-boomers) are clueless about today.

Most Rich Dad fans will know that Kiyosaki's books tend to talk about the same general principles and don't touch on many new and groundbreaking concepts. This book, however, is the exception. I learned so many eye-opening things from this masterpiece. It has truly changed my life and the way I look at money. Do yourself a favor and BUY THIS BOOK.