This is where Rich Dad, Poor Dad was born

Excerpts from Richdad.com...
( http://www.richdad.com/Resources/Rich-Dad-Financial-Education-Blog/july-2013/taking-the-fear-out-of-investing.aspx)

"
...I started with real estate. That made the most sense to me. I bought my first rental property in 1989. It was a small, cute, two-bedroom, one-bath rental house in Portland, Oregon. It was only two blocks away from where we lived. I have to tell you, it was the most frightening thing I had ever faced. I was scared to death. I was worried. I was afraid of making mistakes that would cost us money. I really didn’t know what to expect.
I was ecstatic when after my first month of ownership I received a whopping $25 in cash flow from that property. I was hooked at that moment. Today, I control many millions of dollars worth o f real estate, as well as other investments. And it’s through my investments – which throw off ample amounts of cash flow every month – that I am completely financially free and independent today.
Buying and holding
When many women hear the word “investing,” they think of mutual funds, or stocks and bonds, not real estate. The buying and selling of houses seems daunting, but investing in real estate doesn’t necessarily entail multiple transactions. It’s about buying and holding, not buying and selling.
What retiring is and isn’t
When Robert and I retired, we didn’t just retire to the poolside with margaritas in hand. That year we bought an 85-acre ranch in a small town called Bisbee. Bisbee is an artsy community up in the mountains of Southern Arizona. There was a broken down shack on the property that was actually an old stagecoach depot in the days of the Wild West. We rebuilt it into a wonderful one-bedroom house with a separate artist’s studio on the stream. There was no TV, no radio…only peace and quiet.
Rich Dad Poor Dad
It was in the quiet of Bisbee that Robert wrote Rich Dad Poor Dad. In April of 1997, we self-published Rich Dad Poor Dad, printing 1,000 copies of the book. To be honest, we thought we’d have Christmas presents to last us the next ten years. No bookstore wanted the book. No distributor would touch it. No wholesaler would even return our calls. So we began marketing it ourselves. The first place we had the book for sale was in our friend’s car wash. We put it wherever we could. The book slowly started to sell. Word of mouth spread, and within two years Rich Dad Poor Dad was on The Wall Street Journal’s bestseller list. We were high as kites!..."

So , where will from Bisbee be? In your study room,  1 hour every night?

And how they went to hell and return back to heaven... from 1985 to 1994.... nine years of solid work, tears, sweat, blood....


(  http://www.richdad.com/Resources/Rich-Dad-Financial-Education-Blog/july-2013/1985-the-year-from-hell.aspx )

" ...
In December 1984, Robert and I sold all we had and left Honolulu to begin building our business in Southern California. It didn’t take long—two months to be exact—before we had gone through the money we had. We were broke and without jobs or work. We had a long way to go before we were ready to launch our business. At times we were even homeless, sleeping in a beat-up Toyota Celica. I can honestly say 1985 was the worst year of our lives.
Rock bottom
When Robert and I had nothing, we argued with each other and blamed one another. Resentment built up. We were definitely not at our best. We were stressed beyond belief.
The worst part of it all for me was that my self-esteem hit rock bottom. Before 1985, I was always a very optimistic, happy, decisive, and confident woman. But when we went through this taxing period, I began to question and doubt everything I knew and believed in, including my ability to accomplish anything. I’d ask myself, “Do I know anything at all?” What started as a few self-doubts quickly spiraled into what at the time seemed like a huge, dark hole that was impossible to climb out of...."
 

"...We finally came to the point where we simply had had enough of this chaos that we created. Robert came to the conclusion that no one was going to make his life better except him and that it was time for bold measures. I decided to stop feeling sorry for myself. I stopped blaming everyone else for my circumstances. And the two of us simply made the decision to take control of our future and to get to work. So we did.
Through it all, we built an education company focused on entrepreneurship. While Robert built several businesses in Honolulu before our move to California, he was studying for years how people learn, and new and innovative methods for teaching. Our business grew to eleven offices in seven countries throughout the world. We were constantly on the road, mostly overseas.
In 1994, after nine years of running the company, we sold it and retired. I was 37 years old. Robert was 47. The best part about it was that we were free—financially free. We no longer had to work for money. It was a great feeling.  ...."


And what Robert has to say for people who leaves money into mutual funds and hope for the best...

 ( http://www.richdad.com/Resources/Rich-Dad-Financial-Education-Blog/july-2013/why-you-must-be-a-c-student.aspx )

"..If this is true, it might be stated another way: Those who choose not to become financially educated or play an active role in their investments and, instead, turn their money over to professional money managers, are abdicating responsibility for their financial future—and, if Buffett is on target, getting little value for it. How great is the risk of turning your money over to a “professional” who brings little value to the undertaking of making your money work for you? .."

And a very good article on Fed at 100 years old...

( http://www.richdad.com/Resources/Rich-Dad-Financial-Education-Blog/july-2013/the-fed-at-100-omnipotent-or-senile.aspx )

Laws of Success

This is the book that took 25 years to research and write, and when it was finally published , it was well received so much so until now, it is still in print!  Many of the Laws ( 15 of them) have been diced, mixed and re-packaged in modern motivation courses. Eg Have a plan ( DEFINITE AIM) , action ( CONCENTRATE) , inspiration.... blah...blah...

Napolean himself acknowledges that the laws contained are NOT NEW TRUTHS.... but he had the privilege to interview the captains of the industry that time ( Ford, Edison, Carnegie) and managed to organise a few "core" values that are common amongst the leaders.

Something like the " 7 habits of highly successful people" where the author also acknowledges that the 7 habits that he wrote are nothing new, just that he has them "organised" into easy-to-understand, relevant and effective rules.

So , how many of this 15 rules are important to you to ensure your success?

If you include his Introduction on "Mastermind", then there will be 16 Laws :

Introduction : Master Mind
(1) A Definite Chief Aim ( all the captains put 100% into this )
(2) Self -Confidence
(3) The Habit of Saving
(4) Initiative and Leadership
(5) Imagination
(6) Enthusiasm
(7) Self-Control
(8) The habit of Doing more Than Being Paid (100%- Rich Dad agreed on this too)
(9) A pleasing Personity
(10) Accurate Thought
(11) Concentration  ( 100%)
(12) Co-operation
(13) Failure
(14) Tolerance
(15) The Golden Rule

If you prefer to read on online version , here is one link...
http://napoleon-hill-laws-of-success.com/

Thinking, Fast and Slow

There exists 2 systems in our mind :

System 1 : fast, lightning reaction; reflex system;

 System 2 : slower, more effort, logical

Read all about it ... ( will take some time to cover everything!)...







Salient points :

(1) System 1 is automatic. We cannot stop System 1 from observing things, but System 2 has Executive Control.  But System 2 requires effort, and that takes resources. So, human by nature wants to take short-cuts, as it is the most efficient way of doing things, so it relies on System 1 ( which will work most of the time, until disaster happens...like autopilot until the plane encounters a storm). To overcome laziness, takes effort. That is why effort must be paid ( read : need effort to go to work, hence need to be sufficiently paid to go to work . Laziness does not require effort. So no need to be paid to be lazy!)

(2) Read about the Muller-Lyer Illusion ( visual illusion ) and the Invisible Bear

 System 1 will tell you that (a) is longer line, but in reality (a) and (b) are the same in length.

(3) Read about Cognitive Illusion

(4) Read about the Dilated Pupils when humans are hard at work.

And many , many more insights as I read on. I told you... this book is heavy stuff....will require more than 1 week to really grasp everything....

Outwitting The Devil

The other book by Napolean Hill that was not published until recently :

Salient points :

(1) Putting skeleton, flesh and soul into own's works

  Skeleton : fact, figures, theory
  Flesh : experience
  Soul : emotion

(2) There comes from every experience of temporary defeat, and every failure and every form of adversity , the seed of an equivalent benefit ( not the flower, not the fruit)

(3) ( Emerson ) ... every suffering is rewarded ,
                              every sacrifice is made up,
                              every debt is paid.

Have you met the devil in you yet?

The Great Sage Confucius

" When I am walking with two others, there's always one who can teach me something - his strength, I can emulate; his weakness, I can use for self-correction"

Learn from people's mistakes too... not only their successes...


" I've tried going without food for a day and without sleep for a night , thinking ; but that wasn't as beneficial as learning ."

Take action in learning... apply what you have read... learn from applying the theory in real life.

There is so many insights... and so many beautiful cartoon in the book...

" We are not birds and bees. Since I'm a man, who else should I live with but other men. If this world had peace, I would not be trying to change it ."













In Spring and Autumn period, the six essential skills to have was :

(1) li  : rituals
(2) yue : music
(3) she : archery
(4) yu : driving ( a war chariot )
(5) shu : reading and writing
(6) shu : arithmetic

Confucius placed emphasis on li, the rituals of Zhou . He taught that one should not speak or act unless it accords with li, and when a man reaches such a state, the whole world should regard him as a benevolent man.

" The Book of Change is extensive and profound. One cannot understand it without a certain amount of experiences in life. If Heaven can grant me more years, such that I can read it again when I am in my fifties, I am certain I shall not make any mistakes or cause negligence for the rest of my life."

Is experience important? Some things are best learned with experience... to give flesh to the skeletons of theory..

Lao Tze vs Confucius :

Confucius : Please tell me about benevolence.
Lao Tze : Benevolence signifies a degenerate heart. If Man's heart is pure, what need is there for benevolence?
Does the whiteness of the crane come from constant washing?
Does the blackness of the crow come from constant dyeing?
When the streams are dry, the fishes are land-trapped; they have to keep one another wet with their saliva. Benevolence is like this.

Read more in his 4 books and 5 Classics :


Confucius 4, 5 ,6

(1) 4 books : The Analects ( Lun Yu )
                      Mencius ( Meng Zi )
                     The Great LEarning ( Da Xue)
                      The Doctrine of the Mean ( Zhong Yong )

(2) 5 Classics : Book of Songs ( Shi Jing )
                         Book of History ( Shang Shu )
                         Book of Rites ( Li Ji)
                         Book of Change ( Zhou Yi ... Or Yi Jing... I-Ching )
                         Spring and Autumn Annals ( Chun Qiu )
(3) 6 skills :  Li ( rituals )
                      Yue ( music )
                       She ( archery )
                       Yu ( driving a chariot )
                        Shu ( reading and writing )
                        Shu ( arithmetic )

And his Golden Rule ...

 "Do not do to others what you do not want done to yourself "


His teaching Style : " teaching according to ability "

He taught 4 subjects : 1. Wen ( culture)
                                    2. Xing ( conduct )
                                    3. Zhong ( loyalty )
                                    4. Xin ( trustworthiness )


Practicing an elicitation method of teaching , he said :

" I never enlighten anyone who is never driven to frustration by the urge to seek knowledge. Nor do I illuminate anyone who is never driven to frenzy by the urge to seek knowledge. When I have pointed out one corner of a square to him, and he cannot make the connection with the other three, i will not teach him again."

WTF

Now , this a book on real estate using the Malaysian scenario...

This is also a "draw on equity" type of investing... and is assuming that the real estate will remain bouyant throughout the investment holding period.

Just be mindful that when the property slump comes, the techniques suggested may not work as well.

Meanwhile, keep dancing if the music is still playing....

Miillionaire by Thirty

Now, this is the type of books that Robert Kiyosaki would term as " How-To books". In it , you will have all the tax forms ( for the US citizens) and the tax rates illustarted  for active, portfolio and active income.

 Striking features of this book :

(1) The LSRR ( Laser ) formula
      Liquidity, Safety , Rate of Return

(2) Extracting Equity from your house to Increase Asset base

     Here is how it works. Assuming you have $100,000 in cash. Your asset is S100,000, you net worth is $100,000. Now by buying a house with 100% financing, you now have an asset base of $200,000 ( $100,000 cash plus $100,000 house) but your net worth remains the same, $100,000 ( because Asset, $200,000 minus Liabililties of $100,000 mortgage) . The reward is when your Assets grow by 10% ( say $100,000 put into paper investments and made 10%, and your house appreciates by 10%). Here, you borrow fom the bank to increase your asset base. However, note that mortgage interest is the cost of borrowing. If your house is not appreciating at a rate higher than your mortgage rate, then you will be in trouble. Generally, tenants will help reduce the borrowing cost. Do a thorough study between borrowing costs, and rates of returns ( appreciation, tenants rent) before attempting this type of financing.

(3) Be a banker. Borrow at a cheaper rate, grow at a higher rate. Say, mortgage at 6%, house appreciation at 10%. But will real estate ALWAYS grow at 10%? And which paper assets will give you 10% perpetually?

This is all good under a rising market and assumptions of borrowing at 6% and investing at 8%.

What if it was a slumping market? Your asset base will shrink double the rate as your asset base is now bigger!

And what if your rate of return is less than the bank mortgage?

Well , like all businesses, leverage is a double edged sword. Know your risks and rewards before engaging in real estate.

If you know your figures well, this is the Rich Dad' sway to Financial freedom the real estate way... with all the nitty gritty explained.

Alamac of World History

This is like reading high school  history all over again... but without the pressure of remembering the dates... and with lots of colours and pictures.

Well, if this was the text used for history , maybe I might be the next Indiana Jones!

The Art of Happiness

Never thought I would pick up a religious book at a book fair...let alone read it!
Well, it was cheap enough ( only RM8 at the Big, Bad Wolf sale)..so i guess the organisers of the book fair have achieved their mission is getting people to buy books they normally would not buy if only the price was cheap enough...

This book , though written by a religious figure, is more spiritual than religious.

Dalai Lama can connect with people because he uses people-centric approach.

He believes that we are all human beings, and that we are all entitled to being happy. How much more human can that that be?

Among the striking points :

(1) The antidote for bad attitudes are good attitudes : eg patience as antitode for anger, tolerance for hatred, honesty for low self esteem.

(2) A calm mind means peaceful mind, therefore it is easier to find joy and happiness.

(3) Many problems face by humans can be solved . If the solution can be found, there is no need to worry. Even if no solution can be found, there still is no need to worry about it.

Some of the concepts may be difficult to accept for mere mortals like me. Like how he visualises other people's suffering and chooses to bear them. Something like Christ bearing the sins of the people on earth. Very high level.

Most of the concepts , however, are applicable as the values are quite universal. Patience to counteract anger.... even from a Western perspective, taking some time off and some deep breathing when faced with anger is a proven way to diffuse immediate anger. Patience, eh?

Now , I know why Richard Gere finds Tibetan Buddhism so appealing.... He is after all , AGentleman...looking to get away from the attachments of His Pretty Woman!