Rich Dad, Poor Dad
by Robert T. Kiyosaki with Sharon L. Lechter C.P.A.
I've had this book on my shelf for at least four years since someone at NAF gave it to me, but I just read it yesterday. It only took a few hours and I'd say it was worth the time. I think I can sum it up for you, though:
1. Rich people don't depend on paychecks to get (or stay) rich. Before you even get your paycheck 1/3 to 1/2 is gone (taxes). The more you work and earn, the more you pay in taxes. Jobs mean you're working for someone else first, then the government second.
2. Pay yourself first. Don't buy a lot of doodads (like golf clubs, big screen TVs, cars, boats, etc) and then try to save what's left. The easiest way to do this is to invest in a 401K or some similar plan through your employer. According to the authors, if you start early enough, you might be able to save enough for a comfortable retirement, but you're not going to get rich.
3. Instead, the rich pay themselves first and use that money to purchase assets that will generate income (real estate, stocks, bonds, businesses, whatever). A house is not an asset. A house is a liability. You spend money on a house every month. (I liked this - it made me feel a lot better about not owning a house yet.)
4. Eventually, if you keep investing well, your investments will shelter you from government taxes. (Create a corporation you can spend the money on legal expenses and only pay taxes on what's left, not like income from a paycheck which is taxed first and then you can spend what's left.)
5. Also, you will be able to "retire" and live off the income generated by your assets - a paycheck without a job. Then you're rich.
Mr. Kiyosaki admits in the book that he's not a writer. His co-author is an accountant, also not a writer. The lack of a real author or a good editor was apparent in the book. Parts of it are repetitive, which I found annoying. But it's short and simple to read. I don't think Josh and I are going to run out and take a real estate seminar (which is how Mr. Kiyosaki started his fortune; apparently you really can buy a chocolate factory with no money down), but I'd like to make some changes in our saving and investment strategies.
Mostly the authors want to emphasize the importance of financial literacy. They aren't any real get rich quick schemes. You have to learn how to invest, and then invest. Good luck.
Sunday, February 12, 2006
The Way We Never Were
Huck's Raft: A History of American Childhood
by Steven Mintz
This is a long but interesting book that covers the experiences of children in America from Puritans and Colonial periods through the present. I was very impressed with it right up until we reached more modern times. I first checked the notes when I read broad generalizations about how divorce doesn't really hurt children as much as people feared and found (instead of supporting evidence) references to studies that did find dramatic effects into adulthood. It made me wonder then about some of Mr. Mintz's scholarship for the earlier chapters, though not enough to go back and check all the previous notes.
I gleaned a few overall points from the book. First and foremost, the way people remember childhood and the way we view childhood in past generations always leaves out the roughest lives. So Americans remember a childhood that never really existed. Childhood today is usually much better than for the majority of children in any given time in the past. (One difference for the worse seems to be an increasing proportion of children living below the poverty line, though the effects of poverty can be mitigated with some programs available today.)
Secondly is his belief that adults today view childhood and youth with ambivalence and therefore create greater stress and confusion for young people. The young are protected from "real life" in a world created for them (schools segregated by age, organized activities organized by age, lack of employment because of child labor laws, the need for advanced degrees before entering the work force) and yet are exposed more than ever to the harsh realities of life through TV, increased stress in schools with mandatory testing and the race to get into the "best" schools (from preschool to college), youth culture and consumerism. "The result is a deepening contradiction between the child as a dependent juvenile and the child as incipient adult."
Personally, as a woman of child-bearing age, I'm glad to live when I do. He calculates a Puritan woman's "lifetime chance of dying from childbirth ran as high as one in eight." Yikes. Also, throughout history, the mortality rate for children was enormous. Our children are much more likely to live to adulthood.
I do agree that children are separated too much from adults and other mentors. Extended families are spread throughout the country so aunts, uncles and grandparents are not as involved. Even interaction with adults in the community is curtailed, partly by the fact of school taking up so much time and also from parental fears (not entirely unjustified) of letting children roam around town with other adults.
I also think young people are not allowed to take on responsibilities as they grow older. I'm not suggesting I'd like to return to a time of child labor or that we'll need Caleb to contribute to the family welfare by working on the farm, but a 16 year old boy should be developing a sense of maturity and responsibility in some way besides getting good grades and not crashing the car. I know I didn't have much responsibility at that age - not even cooking dinner once a week. I survived, of course, but I think there could be great benefit in asking young people to contribute to family and society with activities appropriate for the age.
Luckily, we have some time to figure that out for our own kids.
by Steven Mintz
This is a long but interesting book that covers the experiences of children in America from Puritans and Colonial periods through the present. I was very impressed with it right up until we reached more modern times. I first checked the notes when I read broad generalizations about how divorce doesn't really hurt children as much as people feared and found (instead of supporting evidence) references to studies that did find dramatic effects into adulthood. It made me wonder then about some of Mr. Mintz's scholarship for the earlier chapters, though not enough to go back and check all the previous notes.
I gleaned a few overall points from the book. First and foremost, the way people remember childhood and the way we view childhood in past generations always leaves out the roughest lives. So Americans remember a childhood that never really existed. Childhood today is usually much better than for the majority of children in any given time in the past. (One difference for the worse seems to be an increasing proportion of children living below the poverty line, though the effects of poverty can be mitigated with some programs available today.)
Secondly is his belief that adults today view childhood and youth with ambivalence and therefore create greater stress and confusion for young people. The young are protected from "real life" in a world created for them (schools segregated by age, organized activities organized by age, lack of employment because of child labor laws, the need for advanced degrees before entering the work force) and yet are exposed more than ever to the harsh realities of life through TV, increased stress in schools with mandatory testing and the race to get into the "best" schools (from preschool to college), youth culture and consumerism. "The result is a deepening contradiction between the child as a dependent juvenile and the child as incipient adult."
Personally, as a woman of child-bearing age, I'm glad to live when I do. He calculates a Puritan woman's "lifetime chance of dying from childbirth ran as high as one in eight." Yikes. Also, throughout history, the mortality rate for children was enormous. Our children are much more likely to live to adulthood.
I do agree that children are separated too much from adults and other mentors. Extended families are spread throughout the country so aunts, uncles and grandparents are not as involved. Even interaction with adults in the community is curtailed, partly by the fact of school taking up so much time and also from parental fears (not entirely unjustified) of letting children roam around town with other adults.
I also think young people are not allowed to take on responsibilities as they grow older. I'm not suggesting I'd like to return to a time of child labor or that we'll need Caleb to contribute to the family welfare by working on the farm, but a 16 year old boy should be developing a sense of maturity and responsibility in some way besides getting good grades and not crashing the car. I know I didn't have much responsibility at that age - not even cooking dinner once a week. I survived, of course, but I think there could be great benefit in asking young people to contribute to family and society with activities appropriate for the age.
Luckily, we have some time to figure that out for our own kids.
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