Robert Kiyosaki's Rich Dad poor Dad

[Xyril]

To the best of my knowledge, DR50 still hasn't acknowledged the detail that you're equally likely to get advice from any random white person, since they have about the same likelihood of being millionaires.

To be fair, he's moved the goalposts so far that he's pretty much implicitly addressed that point already. After all, he has only asserted that teachers might be a somewhat decent--but not necessarily the best--source of financial information. He has never argued that asking a teacher would be any better than asking a random white person.

This of course raises an interesting point: How much better would our financial advice be if we focused on asking only the white teachers?

[Knaight]

And even if it was, it doesn't mean any learnt behaviours will be applicable to those not born to the same. "Don't overspend your trust fund, give the money to the family accountant and not to NuMadoff" is probably great advice, and utterly useless to anyone that doesn't have a trust fund to start with.

Grey Wolf

It's almost like people with massive piles of money have no idea how to live on limited budgets. Which anyone who has ever heard people with massive piles of money pontificating on, say, welfare is well aware of.

[Tvtyrant]

It's almost like people with massive piles of money have no idea how to live on limited budgets. Which anyone who has ever heard people with massive piles of money pontificating on, say, welfare is well aware of.

There is all sorts of advice which can also be easy to say and hard to follow. Having four-five adult roommates drastically cuts costs while adding stress. $1,400 rent becoming $300 rent per person and $100 weekly food per person becoming $30 may not be worth theft risks, no solitude and regimenting the shower and laundery.

[lio45]

Who ever said that? Ive said that your ideas of "cultural capital surrounding wealth" is optimistically misguided, to put it lightly.

Well, one reliable way of becoming rich is to convince someone to accept a bet where they'll give you a dollar every time you read "cultural capitOl surrounding wealth".

[Knaight]

There is all sorts of advice which can also be easy to say and hard to follow. Having four-five adult roommates drastically cuts costs while adding stress. $1,400 rent becoming $300 rent per person and $100 weekly food per person becoming $30 may not be worth theft risks, no solitude and regimenting the shower and laundery.

There's also all sorts of advice which can be easy to say and is either already being followed, actively detrimental to follow, or just otherwise generally useless. Millionaires might have good advice for managing hundreds of thousands of dollars, but managing $300 a week? That advice tends to come in either laughter or rage inducing depending on the context.

[darkrose50]

To be fair, he's moved the goalposts so far that he's pretty much implicitly addressed that point already. After all, he has only asserted that teachers might be a somewhat decent--but not necessarily the best--source of financial information. He has never argued that asking a teacher would be any better than asking a random white person.

This of course raises an interesting point: How much better would our financial advice be if we focused on asking only the white teachers?

I did, its back there. ~1/7 vs ~1/6.

Also we are talking about kids at school. Random rich white folks are not just going to start showing up for class.

How do I figure that your case has no legs? Well, I look at your stated facts, and I look at the conclusion, and I note that there is no relation between them. Your entire case is "rich people go into teaching, therefore teachers are a good source of information about how to make money". Your case is crippled from the fact that it's at best 1/6, further crippled by misunderstanding of causality, and statistics, and further further crippled by the fact that you have not proven any of the absolutes you require ("all rich people can tell you how to become rich", for starters).

So? Prove that every rich person that goes into teaching has those skills. Until you do, the far more parsimonious theories are "rich people who don't care about money go into teaching" and "rich people who have money skills employ those skills to make money, and thus don't have time to go into teaching".

I am talking about (a) probability of knowledge, and (b) access to school kids.

[Grey_Wolf_c]

It's almost like people with massive piles of money have no idea how to live on limited budgets. Which anyone who has ever heard people with massive piles of money pontificating on, say, welfare is well aware of.

To quote (who else) Pratchett:

The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money.

Take boots, for example. He earned thirty-eight dollars a month plus allowances. A really good pair of leather boots cost fifty dollars. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about ten dollars. Those were the kind of boots Vimes always bought, and wore until the soles were so thin that he could tell where he was in Ankh-Morpork on a foggy night by the feel of the cobbles.

But the thing was that good boots lasted for years and years. A man who could afford fifty dollars had a pair of boots that'd still be keeping his feet dry in ten years' time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.

This was the Captain Samuel Vimes 'Boots' theory of socioeconomic unfairness.

Rich people have innumerable ways of saving money in the long run by spending more money upfront. It is always solid economic advice (to e.g. buy a car that will have less overall cost of ownership over the long run but higher purchasing price), but useless to those not in a position to follow it (e.g. can only afford a third-hand clunker).

Grey Wolf

[Willie the Duck]

There's also all sorts of advice which can be easy to say and is either already being followed, actively detrimental to follow, or just otherwise generally useless. Millionaires might have good advice for managing hundreds of thousands of dollars, but managing $300 a week? That advice tends to come in either laughter or rage inducing depending on the context.

Or both, in some conspicuously-uncoupled-from-reality situations.

[darkrose50]

Rich people can:

• wait for a sale, and stock up
• buy in bulk
• drive to a cheaper store
• have a backup car, or rent a car

• have a bank account, and not pay fees
• get paid to spend money on a credit card
• get paid to take out credit cards
• pay lower loan rates

• can hire experts
• can hire tutors
• can hire the best doctors

• have the best views
• have the high ground
• have the least pollution
• have the most street cleaning
• have the least crime / most protection
• go to the best schools

• the REALLY rich tend to go to boarding schools . . . this REALLY works . . . supervision, bedtimes, homework, tutors, and the best teachers . . . all under one roof!

[Razade]

You've stumbled upon something really interesting there Darkrose. Rich people have access to a lot of things poor people don't because they have a lot more money and time than poor people do. Also, I hate sports.

[darkrose50]

You've stumbled upon something really interesting there Darkrose. Rich people have access to a lot of things poor people don't because they have a lot more money and time than poor people do. Also, I hate sports.

Well mostly it started out as reasons why the rich make/save money by having money, but then I started listing expertise, safety, education and vistas.

[Razade]

Well mostly it started out as reasons why the rich make/save money by having money, but then I started listing expertise, safety, education and vistas.

I think, and this is said as nicely as one can so please do take it as honest and earnest advice, you need to double back and work on the main thrust of your argument. You can't, by this point, have failed to notice that this conversation has gone in a pretty solid loop because people keep raising the same objections to your statements only for you to...repeat them or double down or make claims to evidences you've failed to show.

[Liquor Box]

To quote (who else) Pratchett:


Rich people have innumerable ways of saving money in the long run by spending more money upfront. It is always solid economic advice (to e.g. buy a car that will have less overall cost of ownership over the long run but higher purchasing price), but useless to those not in a position to follow it (e.g. can only afford a third-hand clunker).

Grey Wolf

I don't think that's very often true in real life.

Even if you disregard the fact that more expensive things are more expensive for reasons other than utility (eg brand name or style, when talking about shoes) I think it is generally more economical to repeatedly buy the cheaper option. To use your car example, a new car might cost $30k and be worth $2k after fifteen years. A ten year old car might cost $5k and be worth 2k after another 5 years. Even factoring in a generous amount for maintenance, continually buying second hand works out cheaper.

There are other costs of wealth as well, such as insurance.

I completely agree that having money gives a person more opportunities to make more money for various reasons. But I don't agree that people with money are in a better position to live cheaper lifestyles.

[Razade]

The wisdom that better made things are more expensive isn't a bad one though, nor is it a bad idea to buy things that will last rather than spending more money on things that won't.

[Grey_Wolf_c]

To use your car example, a new car might cost $30k and be worth $2k after fifteen years. A ten year old car might cost $5k and be worth 2k after another 5 years. Even factoring in a generous amount for maintenance, continually buying second hand works out cheaper.

There are other costs of wealth as well, such as insurance.

Liquor Box, you and I have never seen eye to eye, so I am giving a fair warning: I am not going to be discussing this with you.

The TCO of a vehicle is not, as you seem to imply "purchase cost - sale price + generous amount for maintenance". It includes the actual maintenance, taxes and insurance of the vehicle, i.e. the yearly costs. All of which are much higher than purchase cost over ten years, and all of which grow year over year, and which are significantly higher after the ten year mark. They in fact dwarf the purchase cost. I cannot even find the TCO for 10-15 year old vehicles, but even by the 5 year mark, for a Ford Fiesta, the yearly costs are $5k, so by the 10th year, we'd be looking likely at more like $8k, so you'll be spending more on maintenance than you paid for the vehicle, and only gets worse every year on out. While the person that purchased the vehicle new spent more up front, but their yearly costs are so much lower they end up spending less overall.

And, to tie it back to Vimes' boot theory, over those ten years the rich person has had a nice, reliable car, while the poor person has had to deal with breakdowns, lost productivity, bad driving experience, etc.

Grey Wolf

[Willie the Duck]

Even if you disregard the fact that more expensive things are more expensive for reasons other than utility (eg brand name or style, when talking about shoes) I think it is generally more economical to repeatedly buy the cheaper option. To use your car example, a new car might cost $30k and be worth $2k after fifteen years. A ten year old car might cost $5k and be worth 2k after another 5 years. Even factoring in a generous amount for maintenance, continually buying second hand works out cheaper.

Secondhand is not the same as the 'clunkers' that many economically disadvantaged individuals are forced by circumstance to buy, and the maintenance situation they have to keep. I never buy a car new, but I have the luxury of continuous preventative maintenance and making arrangements to have things fail (actually, usually getting replaced before they fail). In relative terms, there is nothing more expensive, in terms of moneys (again in proportion to income) and efforts, than a sudden expense (and change of plans, missed work, etc.) because of your car failing at an inopportune moment. The concepts you are referencing are not wrong, but they don't really represent the experience of the people we are discussing.

[Grey_Wolf_c]

Secondhand is not the same as the 'clunkers' that many economically disadvantaged individuals are forced by circumstance to buy, and the maintenance situation they have to keep. I never buy a car new, but I have the luxury of continuous preventative maintenance and making arrangements to have things fail (actually, usually getting replaced before they fail). In relative terms, there is nothing more expensive, in terms of moneys (again in proportion to income) and efforts, than a sudden expense (and change of plans, missed work, etc.) because of your car failing at an inopportune moment. The concepts you are referencing are not wrong, but they don't really represent the experience of the people we are discussing.

Yeah, there is a massive difference between buying a second-hand, 2 year old former lease and buying a ten year old clunker. The first is probably the best decision economically, as far as I have been able to see, while the latter is literally the most expensive way to obtain a vehicle short of buying it to put a dead pig in it. I shudder to think just how much being forced into that scenario costs people in the US, where a car is sine qua non.

Grey Wolf

[lio45]

I don't want to disagree too much with Grey Wolf here, but... while I'm in total agreement that there indeed are cases in life where you can buy a $100 item that'll last a lifetime and a $10 Chinese-made item that'll last a year, for cars the cheapest way to go is definitely to go used. No question there.

UNLESS - and that's what your data is doing with that $8k on a Fiesta - you're going to have such unreasonably and disproportionally high standards for your clunker that you'll always want to fix everything so it always continues to be 100% perfect as it ages.

I lived through this with my dad - who's that kind of perfectionist. I was an amateur mechanic in my free time and had fixed up a few vehicles already, when I convinced him we should buy this (old) fullsize van for sale I found to use as our company vehicle (up to that point, we just rented commercially any time we needed one). The guy was asking $500.

We bought it, and my dad took charge at this point and brought it to a mechanic we knew... and every time that mechanic pointed out "hmm, there's this thing that should be fixed" my dad was like "go ahead, we like quality and reliability and won't cut corners!" and in the end, when this van got out of there, we had spent a hair under $10,000 in new parts and labor.

I said... dad, $500 for an old van on which we might have to fix stuff eventually makes sense, or then $5,000 on a newer van on which we're less likely to have to fix stuff ALSO makes sense, but now we have a $10,000 old van and there are still lots of things on it that aren't new and may break..... had I known you wanted to turn it into a new vehicle, I'd NEVER have recommended something that old and that cheap!

[Willie the Duck]

I don't want to disagree too much with Grey Wolf here, but... while I'm in total agreement that there indeed are cases in life where you can buy a $100 item that'll last a lifetime and a $10 Chinese-made item that'll last a year, for cars the cheapest way to go is definitely to go used. No question there.

Except, once again, that is literally not the case he presented. He stated, "buy a car that will have less overall cost of ownership over the long run but higher purchasing price), but useless to those not in a position to follow it (e.g. can only afford a third-hand clunker)." So the dichotomy is not used vs. not used, but 'car that will have less overall cost of ownership' vs. 'third-hand clunker.' It's entirely reasonable to call that out as a false dichotomy, or suggest that higher purchase price isn't the primary concern, but saying that you are disagreeing with him, and then presenting the case for used cars is implying that he made a case against used vehicles, which he did not do.

[Cazero]

Also we are talking about kids at school. Random rich white folks are not just going to start showing up for class.

Wait what? This entire time, you've been postulating that kids at school would be interested in anything about finance and budgeting? To the point of asking their teacher about it? Even tough said teacher never talked about the subject during class, primarily because it isn't their job?
... Have you ever been in school?

Just buy them a management videogame where budget matters. At least it will have the ability to hold the interest of some of them for more than three seconds.

[Rogar Demonblud]

I did, its back there. ~1/7 vs ~1/6.

Also we are talking about kids at school. Random rich white folks are not just going to start showing up for class.

I am talking about (a) probability of knowledge, and (b) access to school kids.

Kids can ask anybody they find anywhere. You have to explain why asking any random teacher will get any different response than asking any random white person. The odds are close enough to be the same.

[snowblizz]

But I don't agree that people with money are in a better position to live cheaper lifestyles.

They are. I'm trying to find the clip (or it has been parts of several) where John Oliver (I think it was) goes through the cost of being poor. I so far found a clip where he is talking about pay-day loans, but am not sure if that's where it is brought up.

The gist of it really is, pay your bills on time. Late fees and interest racks up firce. For poor people that's not always an option, but every deferred bill costs you more. Pay a $10 bill late and get slapped with a $5 surcharge. Well now you got to pay that $5 and the next $10 is $15 but you already were on the edge with $10. It's easy to get into a negative spiral, and that's where the hidden cost of pay-day lending kicks in. If you want to borrow money the poorer you are the worse a rate you'll get. Literally, you cannot afford to borrow cheaply.

Basically, it is expensive to be poor. And without going into politics... there are a lot of factors feeding into povetry strengthening the issues around cashflow problems.


What you should not be agreeing with is the statement "rich people are less likely to want to live cheaper lifestyles".

I shudder to think just how much being forced into that scenario costs people in the US, where a car is sine qua non.

Grey Wolf

It is currently a potential financial lending bubble (equal or) larger than the previous US housing lending bubble.

[Grey_Wolf_c]

What you should not be agreeing with is the statement "rich people are less likely to want to live cheaper lifestyles".

Which I didn't say, right? I certainly didn't mean to suggest anything of the sort. Rich people have got choices - they can save money, or they can splurge it. Poor people don't get choices. They are constantly preyed upon and have no good options.

It is currently a potential financial lending bubble (equal or) larger than the previous US housing lending bubble.

I was going to suggest those kinds of bubbles at least hurt the rich... but then I remembered they hurt the poor even more. Trickle down economics only really works when it comes to pain.

Grey Wolf

[darkrose50]

I think, and this is said as nicely as one can so please do take it as honest and earnest advice, you need to double back and work on the main thrust of your argument. You can't, by this point, have failed to notice that this conversation has gone in a pretty solid loop because people keep raising the same objections to your statements only for you to...repeat them or double down or make claims to evidences you've failed to show.

I was referring to responding to the most (?) recent post.

Wait what? This entire time, you've been postulating that kids at school would be interested in anything about finance and budgeting? To the point of asking their teacher about it? Even tough said teacher never talked about the subject during class, primarily because it isn't their job?
... Have you ever been in school?

Just buy them a management videogame where budget matters. At least it will have the ability to hold the interest of some of them for more than three seconds.

I have had solid advice from 5-6 teachers that helped shape my understanding of economics. You never had a lesson on economics, or a conversation with a teacher about economics? Information from lessons or from conversations with people is an important medium. I wound never ever just look for information from one source when trying to learn something . . . absolutely positively never ever. Teachers are not the one and only source for learning.

-----

Okay serious question here. Is this looking for one source on a topic seriously how some people learn? I mean learn important stuff, not the definition of a word . . . even then I often like to check multiple sources. I just about always check multiple sources (people, books, anything really). Compare and contrast them. Think about the best way (for me) to implement the knowledge. Talk about it, sleep on, it and come back again at some later point. I need (or try) to build understanding and connect the learning to other things. They sometimes call this a learning web.

Trickle down economics only really works when it comes to pain.

Trickle-down economics is a public relations (propaganda) campaign to make money. Basically spend less on propaganda than what you make back in profit.

This and the absurd notion that lower tax rates on NOT working (investments) than ACTUAL working (jobs) is somehow needed. This is quite the lie. There is not one investor (well no real shortage of investors, we can always find the outlier in a data-set) that would choose to not invest in order to make free money because they had to pay the same tax-rate as someone working . . . just back-test the idea and/or look at other countries. It should be the other-way around. You should pay more taxes for money that is not bound by time and space (investing is a percentage that does not care if you work or not, and working is a flat amount bound by how many hours you work). Basically not-working is seen as more important than working . . . and that is just wrong.

[truemane]

Wait what? This entire time, you've been postulating that kids at school would be interested in anything about finance and budgeting? To the point of asking their teacher about it? Even tough said teacher never talked about the subject during class, primarily because it isn't their job?
... Have you ever been in school?

Just buy them a management videogame where budget matters. At least it will have the ability to hold the interest of some of them for more than three seconds.

In my various capacities as a manager/supervisor/administrator, over the years, I have instructed probably a hundred or so normal high-school age kids in basic taxation. And about half of those discussions wound up going into basic budgeting as well. And I've spoken to another few dozen over the years who have expressed frustration that they hit their 20's with no idea how money actually works. And some of these kids were buttoned down "office" types, but at least half were not.

Not a representative sample, clearly, but, I mean, it's not crazy. Under 18's aren't all videogame addicted id-machines. Like all of us, by and large they're trying to win at the things available to them.

[Willie the Duck]

Okay serious question here. Is this looking for one source on a topic seriously how some people learn?

No, and I don't think anyone meant to suggest such. The topic is teachers (well, the original topic was Robert Kiyosaki, but the topic that has drifted to the fore is teachers) and so we are discussing teachers, which is a source (well, source type, obviously. You have more than one teacher). Cazero listed an alternative to a main topic, but that does not mean he thinks people will (or should) have one singular source of learning, any more than you do.

[lio45]

This is the VERY point that this whole thread has sprang from and has become about. The Rich Dad, Poor Dad argument that teachers don’t know how to be wealthy nonsense.

The argument is that teachers are a good source for information, not a bad source. Black and white. On or off. 1 or 0.

I do not disagree. Once we got past 'Kiyosaki's is wrong,' the OP had a position they wanted to be right and worked backwards from there.

In fact, I'm among the ones in here (the only one?) who are on the side of the argument that Kiyosaki's correct. And I've been "a businessman" for 15+ years, with a net worth nowadays that would probably have me accused of lying if I tried to be honest about it on an anonymous internet forum, and it was partly helped by reading these two "gurus" while in university. Certainly moreso than any of my teachers. Including university ones (let alone elementary school!!!)

I insist, IMO it's clear that [random white people] / [random teachers] are a "bad", not "good" source of information in a world where there are many much better sources of information at your fingertips.

There's an opportunity cost to chatting with a random person, and there's greater danger vs reward in applying that person's advice compared to doing what you personally think is the smartest.

Right now, if you offered me a choice between "continue to manage your wealth like you've been doing so far" and "ask a random white person on the street, and you're bound to follow whatever advice he gives you", the latter would be a recipe for greatly slowing down my year-over-year gains.

[Cazero]

I have had solid advice from 5-6 teachers that helped shape my understanding of economics. You never had a lesson on economics, or a conversation with a teacher about economics?

I never had a single conversation on economics with teachers. Not during school, not during high school, not during college. I had exactly one semester on economics as part of a master's degree. I only remember basic accounting from it. Algebra was more interesting by virtue of using more than two operations.
I suppose statistically some people have to be interested in investing at a young age and talk about it in school with teachers, but the idea that it should be commonplace is completely alien to me.

Information from lessons or from conversations with people is an important medium. I wound never ever just look for information from one source when trying to learn something . . . absolutely positively never ever. Teachers are not the one and only source for learning.

That's completely besides the point that people in general (and children in particular, seriously what the heck) have no interest in learning any of that finance stuff and therefore no motivation to get any information about it.

edit :

In my various capacities as a manager/supervisor/administrator, over the years, I have instructed probably a hundred or so normal high-school age kids in basic taxation. And about half of those discussions wound up going into basic budgeting as well. And I've spoken to another few dozen over the years who have expressed frustration that they hit their 20's with no idea how money actually works. And some of these kids were buttoned down "office" types, but at least half were not.

Well, you were specificaly teaching them about the general subject, and making them realise they didn't know things that they thought of as basic stuff. That breeds interest.
Apparently, darkrose50 would expect them to spontaneously ask any teacher. Art, geography, physical education, anything as long as it's a teacher. That's what I find odd.

[Willie the Duck]

In fact, I'm among the ones in here (the only one?) who are on the side of the argument that Kiyosaki's correct. And I've been "a businessman" for 15+ years, with a net worth nowadays that would probably have me accused of lying if I tried to be honest about it on an anonymous internet forum, and it was partly helped by reading these two "gurus" while in university. Certainly moreso than any of my teachers. Including university ones (let alone elementary school!!!)

I also am in that wealth-situation, and beyond accusations of lying, I think the point is that I can't back that up without doxing myself. That's why I tend to advocate the 'don't tell people you have expertise, use that expertise to help you provide verifiable sources which support your case.'

I insist, IMO it's clear that [random white people] / [random teachers] are a "bad", not "good" source of information in a world where there are many much better sources of information at your fingertips.

There's an opportunity cost to chatting with a random person, and there's greater danger vs reward in applying that person's advice compared to doing what you personally think is the smartest.

There seems to be a lot of disagreement on the boundaries of 'bad,' 'not bad,' and, 'good.' Which sources of information do you think that the average... whomever we are using as our base population looking for wealth-management advice/education... both have at their fingertips and ought to be referencing rather than teachers?

Right now, if you offered me a choice between "continue to manage your wealth like you've been doing so far" and "ask a random white person on the street, and you're bound to follow whatever advice he gives you", the latter would be a recipe for greatly slowing down my year-over-year gains.

You've already stipulated that you are already above basic education on the subject. 'This has no value to an expert on the subject.' isn't really a devastating critique of a given information source, unless that specifically is the population of wealth-management advice/education seekers we are using for our model.

[Peelee]

And I've been "a businessman" for 15+ years, with a net worth nowadays that would probably have me accused of lying if I tried to be honest about it on an anonymous internet forum

I also am in that wealth-situation

Way to make me feel like my dragon hoard is inadequate.