Rich Dad, Poor Dad

[CalicoKat]

Rich Dad, Poor Dad -- has anyone gone to one of their free seminars? Is it worth it?

 

One of my self-education goals this year includes exploring and finding a way to supplement our income without me having an outside job. DH is just as interested as I and it's something we're going to do together this year.

 

If you've read and done the suggestions in Rich Dad, Poor Dad please share youre thoughts and experiences.

 

Thanks.

[Sweetpeach]

My story:

 

In July 2003 and at 8.5 months preggers with #3, friends from Beautiful British Columbia came for a visit and brought with them a book they thought we'd enjoy -- Rich Dad/Poor Dad's What The Rich Teach Their Kids about Money that the Poor and Middle-Class Do Not.

 

That one book absolutely revolutionized our financial lives and I am forever greatful for the lessons we've learned.

 

Real Estate is not a s*xy investment -- it's not a get-rich-quick scheme, although it can be very profitable in the short-term and very worthwhile in a long-term investment scenario.

 

What I know today:

 

1) Always find people to work with you that are smarter, more experienced and enjoy mentoring rookies. Building a team is the most important thing you can do for yourself. Go fast, go alone. Go far, go together.

 

2) Leveraged money is key.

 

3) It's not how much you make every month . . . it's how much you keep in your pocket at the end of the month.

 

4) If you are serious about real estate, you can't have personal debt. Leverage money for mtg's but for everyday living, find a way to live on less.

 

I could go on and on about this . . . I've never been to a RD/PD conference, but we've successfully used the examples given in RD/PD to build an real estate investment portfolio which is being 100% paid for by rental incomes. Our monthly cashflow hasn't changed considerably, but we're building equity every month and big purchases/expenses like university educations are being saved for in the equity of our investment properties.

 

It's an amazing journey of self-education and learning how to open your eyes to the possibility of wealth all around you . . . I'm not talking just $$$, but the true wealth of living within your means, seeing the beauty in everyday life, loving deeply and freely. It's all tied together.

 

Another one of my favorite books is by Richard Paul Evans, The 5 Lessons a Millionaire Taught Me. Another one I like is by Dr. C. Thomas Anderson, Becoming a Millionaire God's Way: Getting Money To You, Not From You.

 

Have fun!

Tricia

[Brilliant]

I haven't read the book or attended a seminar, but I have friends who have.

 

Both families I know who have done this (books, seminars, etc.) had some pretty serious financial difficulties that led them to seek *anything* that would help them. One of them is now far worse off than if they hadn't followed the advice which includes not "Working for the man." Sometimes you just have to get a job. Not everyone can be successful by "changing your mindset" (you're not rich because you don't think like a rich person), or investing in real estate (you should buy an investment/rental property before a house for your family), or starting your own business (you'll never get ahead by trading time for money), etc.

 

The author has admitted that no Rich Dad existed.

 

There are plenty of web-sites (just google rich dad poor dad) that might help you get more information.

[Brilliant]

It's an amazing journey of self-education and learning how to open your eyes to the possibility of wealth all around you . . . I'm not talking just $$$, but the true wealth of living within your means, seeing the beauty in everyday life, loving deeply and freely. It's all tied together.

 

Tricia

 

I'm glad it is working for you.

 

My friends who faced bankruptcy & foreclosure don't talk much about the wealth of beauty in everyday life anymore. I think they saw that beauty more before they started on the Rich Dad path. They turned to Rich Dad to fill a financial need, and the advice they took ultimately made it worse.

[Sweetpeach]

I haven't read the book or attended a seminar, but I have friends who have.

 

Both families I know who have done this (books, seminars, etc.) had some pretty serious financial difficulties that led them to seek *anything* that would help them. One of them is now far worse off than if they hadn't followed the advice which includes not "Working for the man." Sometimes you just have to get a job. Not everyone can be successful by "changing your mindset" (you're not rich because you don't think like a rich person), or investing in real estate (you should buy an investment/rental property before a house for your family), or starting your own business (you'll never get ahead by trading time for money), etc.

 

The author has admitted that no Rich Dad existed.

 

There are plenty of web-sites (just google rich dad poor dad) that might help you get more information.

 

I absolutely agree with everything you say here -- I think it's not very bright to quit your job, or not look for a job while you do the "pie in the sky" and hope something will happen for you.

 

The reason we've had success in real estate is because my dh has a solid, stable government position, which for the most part is an 8:30 - 4:30 work day. It gives us the time to "mind our own business" on the side, which is why it works for us.

 

And the fact of the matter is -- it is *hard work* buying and maintaining rental properties. We have a pending deal right now, and we'll have to work like crazy folks to get that property rentable in a short period of time. We just can't afford cleaning teams and tradesmen to do the hard work for us.

 

I don't think real estate investment is a good choice if you need quick cash to somehow dig out from under a heavy debt-load. We had to flip our first two houses just to see the light of day, and only when we were debt-free would the banks even look at us for third and fourth mortgages. I also don't recommend real estate investment if you aren't handy -- it costs a ton of money to have a tradesperson do repairs on a rental.

 

I think you have to do real estate with your eyes wide open -- and we've tiptoed into the income property game, bit by bit.

 

I'm sorry for your friends - I hope they find their way to surface soon!

 

Tricia

[Colleen in NS]

that while I've read a lot of the Rich Dad books, and while dh and I are not doing any of the RE stuff that is recommended in them - I know Mr. and Mrs. Sweetpeach personally, and have ***seen*** with my very own eyes, the results of their very hard work on RE investments. We have talked about this stuff together, and this girl knows what she's talking about - AND she works hard at it!! It's definitely not something to "try out" or dabble in, but I know the Sweetpeaches are learning their stuff and work hard at renovations, etc. They've pretty much made it their "family business," while keeping the day job, while they are learning, until it brings the results they are looking for.

 

I read the Rich Dad books long before I met them....so it was fun to hear about the actual "workings" that someone was doing.

 

:) Fun to keep hearing about it, Tricia!

[CalicoKat]

My story:

 

In July 2003 and at 8.5 months preggers with #3, friends from Beautiful British Columbia came for a visit and brought with them a book they thought we'd enjoy -- Rich Dad/Poor Dad's What The Rich Teach Their Kids about Money that the Poor and Middle-Class Do Not.

 

That one book absolutely revolutionized our financial lives and I am forever greatful for the lessons we've learned.

 

Real Estate is not a s*xy investment -- it's not a get-rich-quick scheme, although it can be very profitable in the short-term and very worthwhile in a long-term investment scenario.

 

What I know today:

 

1) Always find people to work with you that are smarter, more experienced and enjoy mentoring rookies. Building a team is the most important thing you can do for yourself. Go fast, go alone. Go far, go together.

 

2) Leveraged money is key.

 

3) It's not how much you make every month . . . it's how much you keep in your pocket at the end of the month.

 

4) If you are serious about real estate, you can't have personal debt. Leverage money for mtg's but for everyday living, find a way to live on less.

 

I could go on and on about this . . . I've never been to a RD/PD conference, but we've successfully used the examples given in RD/PD to build an real estate investment portfolio which is being 100% paid for by rental incomes. Our monthly cashflow hasn't changed considerably, but we're building equity every month and big purchases/expenses like university educations are being saved for in the equity of our investment properties.

 

It's an amazing journey of self-education and learning how to open your eyes to the possibility of wealth all around you . . . I'm not talking just $$$, but the true wealth of living within your means, seeing the beauty in everyday life, loving deeply and freely. It's all tied together.

 

Another one of my favorite books is by Richard Paul Evans, The 5 Lessons a Millionaire Taught Me. Another one I like is by Dr. C. Thomas Anderson, Becoming a Millionaire God's Way: Getting Money To You, Not From You.

 

Have fun!

Tricia

 

questions about rentals . . .

 

we have talked about renting our current home after/if we move into the new house. BUT we don't know much about renting single properties. My folks have many multiplex rentals and a several duplexes they manage. I do know the hard work that goes into managing those properties. It works for them because they do all the hard work.

 

And while we do have their experience to draw from they do admit they don't know anything about doing a single family home. Have you done this?

 

We've been trying to sell our current home. But it just may now happen. We're supposed to build a new home. But if we can't sell this home it won't happen either. However, we've been wondering about renting this home and building. But we don't know how to make a smart move in this direction.

 

Is there anyone in your network who would be happy to mentor some rookies?

 

Thanks,

Calico

[Mama Lynx]

that while I've read a lot of the Rich Dad books, and while dh and I are not doing any of the RE stuff that is recommended in them - I know Mr. and Mrs. Sweetpeach personally, and have ***seen*** with my very own eyes, the results of their very hard work on RE investments. We have talked about this stuff together, and this girl knows what she's talking about - AND she works hard at it!! It's definitely not something to "try out" or dabble in, but I know the Sweetpeaches are learning their stuff and work hard at renovations, etc. They've pretty much made it their "family business," while keeping the day job, while they are learning, until it brings the results they are looking for.

 

I read the Rich Dad books long before I met them....so it was fun to hear about the actual "workings" that someone was doing.

 

:) Fun to keep hearing about it, Tricia!

 

When you say "works hard," exactly what do you mean? What does the hard work involve? Hours of research? Physical labor of working on properties? Hours of work finding tenants?

 

Is it an unworkable thing to do if you are okay with the financial risk, but feel you would need to use someone else as a handyman, or manager?

[Colleen in NS]

When you say "works hard," exactly what do you mean? What does the hard work involve? Hours of research? Physical labor of working on properties? Hours of work finding tenants?

 

Is it an unworkable thing to do if you are okay with the financial risk, but feel you would need to use someone else as a handyman, or manager?

 

They do all three. Hours of research (like, how do you install a toilet - she explained to me, one day in her basement bathroom, the process she had just learned, about how they were going to break up the cement floor and all the other stuff involved in installing the toilet - I just stared at her and the cement floor in awe - just like she stared at me and my homemade yogurt in awe, LOL!), physical labour (see toilet - also tiling bathroom walls, putting up studs and wall in basement, mudding, painting, cleaning up afterwards, laying hardwood flooring, landscaping....and these are just a few of the things I know they have done - I'm sure there is more), finding tenants (the Sweetpeaches are very sociable people, and I imagine that helps, but I know that they do find tenants - last I heard, their renovated duplex had both sides rented out).

 

As for your second paragraph, I don't really know. If it was me, I'd probably opt to do the work myself, just to spend as little as possible and slowly build up the equity. As to whether or not to hire managers and handypeople, it always depends on the numbers. You gotta crunch the numbers with everything in life (move or not move, buy a house or rent, take this job or not, go the self-employment route or not, start a business or not, buy the steak or buy the hamburger, buy bread or make my own.....). That's why I said it's hard work. I'm sure the Sweetpeaches have crunched a lot of numbers over the years, as well as learning all sorts of reno skills. And I'm sure there is a LOT more to it than what I know, too. :)

 

Let me also say that I am not advocating that everyone should go into the reno and real estate business. All I was saying is that I know her personally and I know she is passionate about it, so the learning and application of the practical skills comes a little easier for her that it might to someone else who is only somewhat interested.

 

I feel like I'm doing a job reference, LOL! But she is good at what she does!

[Mama Lynx]

Thanks. I'm asking because this is something my husband has always wanted to do. However, in our family, I tend to be the researcher ;-)

 

Hmmm. We did a great deal of handyman stuff on our last house that we owned - tiled, painted, replaced toilets, etc. It sounds like I would have to think about the time commitment to that kind of work, and how it would impact homeschooling, etc. But what you're describing is about what I was expecting to hear, so I'm at least in the ballpark as to what to expect.

 

Thanks!

[Carol in Cal.]

I recommend the Nolo Press books about being landlords.

 

We have used these for years, and they have been complete and helpful.

 

Always check your references and credit history. Make sure you go back two landlords. Someone who wants to get rid of a tenant may not say what it is really like to work with him.

 

I always rent a little below market and charge a large security deposit. I explicitly tell the tenants--I do this so that I can pick someone who will really take good care of this property. My old neighbors live around here, and I don't want this house to bring down the neighborhood just because it is rented. So I'm giving you a good deal on the rent, and if you take good care of the house you will also get your deposit back.

[Sweetpeach]

I'll bring what I know to the board later this evening . . .

 

We're in the middle of the crazy storm right now, trying to secure the next deal, and it's making me a little crazy. Financing is always a hill to die on for me . . . I find the #'s so stressful. I feel like we're in the 4th quarter, down by a few points and have to rally this through, dig deep to make it happen.

 

I still did school today though -- *hooray*

 

T

[Sweetpeach]

When you say "works hard," exactly what do you mean? What does the hard work involve? Hours of research? Physical labor of working on properties? Hours of work finding tenants?

 

Is it an unworkable thing to do if you are okay with the financial risk, but feel you would need to use someone else as a handyman, or manager?

 

 

So, I'll give this my best shot!

 

Different situations take different hard work.

 

For ie, we're closing a deal on a set of side-by-side semi's mid-April. These semi's are *disgusting* in every way. I think the toilet's are white, underneath the grime. I think the shower stall has tiles, but can't tell from the mold and disgust. There is no trim work in any part of the semi, the carpets are original, the basements are disgusting, the kitchen is indescribable and I'm praying I don't catch a communicable disease during the clean-out days -- so why in the world are we buying them, knowing we have to face the intensity of turning these properties around in 6 weeks?

 

Instant equity. But it's hard work.

 

Finding tenants is easy in our neck of the woods - our properties are in good locations and solid neighbourhoods. But certainly, it's not that way everywhere and you really need to have your finger on the pulse before you jump in to the rental pool.

 

Hours and Hours and Hours of physical labour go into our properties. They are truly labours of love. We don't have a money tree growing in our backyard (shocking, I know) so we have to do everything the hard way, which is figure it out ourselves. Granted, the intensity of the hard physical labour is a short-term pain for these semi's, but still tough.

 

Flipping houses is much more intense than purchasing and holding on for the ride.

 

Your last question is key: many people own rental units who are fine with paying tradesmen and believe me, if I had the cash, I would get help. The only problem, however, is tradesmen don't necessarily care about your property the way you do, so I'm always very leery to pay for work that I'm not sure is A-OK. We get help with tricky plumbing situations, or if we have to run updated electric but otherwise, we've taught ourselves and we work it at.

 

Real estate is fun - we love the challenge of buying the sweat equity properties, doing the hard work and then doing it again on another property. It's not for the faint of heart, but we love it.

 

I feel disheartened for the folks who've been burned by RE investing -- and I validate that it's a tough slog sometimes. Keep your eyes wide open; be very careful of who you work with in terms of agents and mortgage brokers. I don't work with hungry agents . . . and I sure don't use mtg brokers who haven't been personally recommended by someone I trust.

 

HTH's.

T

[Sweetpeach]

questions about rentals . . .

 

we have talked about renting our current home after/if we move into the new house. BUT we don't know much about renting single properties. My folks have many multiplex rentals and a several duplexes they manage. I do know the hard work that goes into managing those properties. It works for them because they do all the hard work.

 

And while we do have their experience to draw from they do admit they don't know anything about doing a single family home. Have you done this?

 

We've been trying to sell our current home. But it just may now happen. We're supposed to build a new home. But if we can't sell this home it won't happen either. However, we've been wondering about renting this home and building. But we don't know how to make a smart move in this direction.

 

Is there anyone in your network who would be happy to mentor some rookies?

 

Thanks,

Calico[/quote/]

 

I think this is a quick answer -- will the rent cover your mtg, insurance and taxes? It's an unemotional numbers game. We have friends that have rented out their single family dwelling - they've had pretty good luck. I would be especially careful with tenant screening.

 

T

[Sweetpeach]

I recommend the Nolo Press books about being landlords.

 

We have used these for years, and they have been complete and helpful.

 

Always check your references and credit history. Make sure you go back two landlords. Someone who wants to get rid of a tenant may not say what it is really like to work with him.

 

I always rent a little below market and charge a large security deposit. I explicitly tell the tenants--I do this so that I can pick someone who will really take good care of this property. My old neighbors live around here, and I don't want this house to bring down the neighborhood just because it is rented. So I'm giving you a good deal on the rent, and if you take good care of the house you will also get your deposit back.

 

I like how you framed the conversation with the tenants you've chosen -- I'll remember that for future reference.

TY for sharing.

T

[Sunny]

I've read 3 of R. K. book's. They are interesting, and filled with principles that are ideal. Many people don't know these principles, such as believing their house is an "investment". Today, our homes are usually a majority of our "wealth" yet it really isn't something we tap into, it is something we live IN.

 

He is also right on when he talks about needing residual income. That is what business owners do. They duplicate their efforts with employes. Rentals duplicate the stream of income. Anything that can duplicate your efforts after you have already performed the majority of the work and continues to grow is what he is endorsing. He is also an endorser of Direct marking sales, because this does precisely that same thing, but without the capital required of RE. If you want to work from "home" don't dismiss this as a valid opportunity. just do diligent research. We've taken this approach, and it is working really well, keeping me home, and will start replacing dh's income within a year. No risk to capital. Very little monthly expense. Hard work, but not physical like remodeling a dump of a property.

 

So, he has some really good things to say.

 

He is also really redundant. After reading 3 books, I think I read only a book and a half of something I could walk away with that was not duplicated. He contridicts himself too. And, as earlier posters have confirmed, he presents his principles and his life story as something that is worthy of replicating even as far as he went.. all the way to bankruptcy. I think there are smarter ways to get going, and the first is being able to afford the new venture without risk to home and family. I don't think that he suggests quitting the day job before the supplemental income is strong. At least, I've heard him talk about getting that second business going while using the day job to support the needs of family. That is important to remember, because it gets lost in the hipe of his message.

[Mama Lynx]

So how do you manage to do all this, have your husband hold down a full-time job, AND homeschool?

[Sweetpeach]

I've read 3 of R. K. book's. They are interesting, and filled with principles that are ideal. Many people don't know these principles, such as believing their house is an "investment". Today, our homes are usually a majority of our "wealth" yet it really isn't something we tap into, it is something we live IN.

 

He is also right on when he talks about needing residual income. That is what business owners do. They duplicate their efforts with employes. Rentals duplicate the stream of income. Anything that can duplicate your efforts after you have already performed the majority of the work and continues to grow is what he is endorsing. He is also an endorser of Direct marking sales, because this does precisely that same thing, but without the capital required of RE. If you want to work from "home" don't dismiss this as a valid opportunity. just do diligent research. We've taken this approach, and it is working really well, keeping me home, and will start replacing dh's income within a year. No risk to capital. Very little monthly expense. Hard work, but not physical like remodeling a dump of a property.

 

So, he has some really good things to say.

 

He is also really redundant. After reading 3 books, I think I read only a book and a half of something I could walk away with that was not duplicated. He contridicts himself too. And, as earlier posters have confirmed, he presents his principles and his life story as something that is worthy of replicating even as far as he went.. all the way to bankruptcy. I think there are smarter ways to get going, and the first is being able to afford the new venture without risk to home and family. I don't think that he suggests quitting the day job before the supplemental income is strong. At least, I've heard him talk about getting that second business going while using the day job to support the needs of family. That is important to remember, because it gets lost in the hipe of his message.

 

 

Hi Sunny, wonderful news that you are making a multi-level work for you. Like yourself, I think Direct Marketing is a very valuable option, and easily dismissed by the masses. I always go to the information sessions if a friend of a friend wants to introduce me to something . . . in my opinion, people have to "choose their evil" and I do real estate because the outcome only depends on our hard work; I don't have to educate others about the benefits of minding your own business.

 

If the correct Direct Marketing business came along, and I was inspired by their products and individual profit %'s, than I would definitely think about it.

 

I find Kiyosaki's writing style to be rather uninspired (he admits his writing isn't great) but I think he's got some smart things to say. Certainly, we've not followed his advice to the T . . . we're pretty cautious with how far we extend ourselves.

 

DH's employment pays the bills, allows us to tithe and save a smidge, and we have an ok life . . . no extravagant vacations, we live in a budget. The real estate pumps a bit of cashflow into our monthly budget but not enough to make a huge difference. It's the longterm benefits which interest us.

 

It's fun, though, and I really enjoy learning the ins and outs of playing the game. RE has stretched dh and I into a new way of thinking, a more intense committment to living in reduced budget, more passionate about having a savings layer, less short-term gratification for long-term benefits.

 

T

[Sweetpeach]

So how do you manage to do all this, have your husband hold down a full-time job, AND homeschool?

 

Good question:

 

I've mentionned before that we flipped two houses which allowed us to pay off all outstanding debt and have a substantial downpayment for the first rental property. That was not easy, with three little kids and homeschooling.

 

To be honest with you, looking back over the decisions we made . . . I pushed myself to the end of my strength, physically and emotionally. Now, we use equity to purchase dumpers that we don't have to actually move to . . . it allows me to guard our mornings for school and our afternoons/evenings are used to work on the houses until they are finished.

 

I'm prepared to work hard from mid-April to mid-June, and then we can relax a bit more.

 

It's a lifestyle - I know that might sound crazy, but we've made a lifestyle out of our love, which is RE. Initially, homeschooling grew out of the RE decisions we were making. We bought and sold houses, and the kids would have been bumped around different school districts, and that was a price too high to pay.

 

Now, we're settled in a house for a minimum of 3 - 5 years, unless a deal came up that we absolutely couldn't resist, and then we'd consider another path.

 

That's enough about us. Wishing you well as you figure out the best way to mind your own business.

 

Warmly, Tricia

[CalicoKat]

questions about rentals . . .

 

we have talked about renting our current home after/if we move into the new house. BUT we don't know much about renting single properties. My folks have many multiplex rentals and a several duplexes they manage. I do know the hard work that goes into managing those properties. It works for them because they do all the hard work.

 

And while we do have their experience to draw from they do admit they don't know anything about doing a single family home. Have you done this?

 

We've been trying to sell our current home. But it just may now happen. We're supposed to build a new home. But if we can't sell this home it won't happen either. However, we've been wondering about renting this home and building. But we don't know how to make a smart move in this direction.

 

Is there anyone in your network who would be happy to mentor some rookies?

 

Thanks,

Calico[/quote/]

 

I think this is a quick answer -- will the rent cover your mtg, insurance and taxes? It's an unemotional numbers game. We have friends that have rented out their single family dwelling - they've had pretty good luck. I would be especially careful with tenant screening.

 

T

 

yes. I've been checking our rentals for us in the event we have to move before the new house is built. Monthly rentals in our neighborhood are well above our current monthly homeowning expenses.

 

Tenant screening -- I know how my parents do it regarding the financial piece, but they have said that they can't technically screen out for anything less than the financial. Any tips you have would be great.

[CalicoKat]

Thanks. I'm asking because this is something my husband has always wanted to do. However, in our family, I tend to be the researcher ;-)

 

Hmmm. We did a great deal of handyman stuff on our last house that we owned - tiled, painted, replaced toilets, etc. It sounds like I would have to think about the time commitment to that kind of work, and how it would impact homeschooling, etc. But what you're describing is about what I was expecting to hear, so I'm at least in the ballpark as to what to expect.

 

Thanks!

Impact to homeschooling wouldn't be as huge since you'd be able to close the door and walk away for a couple hours. The remodeling dh did in our home was disruptive to the family (bathrooms!) and homeschooling.

 

We were talking about the positives this might have for our kids. If we can include them in on what they're able then we'd also be teaching.

 

It is an investment of energy & time (driving and working away from home).

[Sunny]

You sound like you are doing all the right things! Rentals are really about having the property gain value over the years and when sold, offer a great retirement. I don't know of many that find it "profitable" early on.usually when done right, it pays for itself, but not really a stream of extra spending money until years into the mortgage.

My husbands dream has always been to flip houses, or keep the special ones and rent them. He is a paint contractor and handyman. He could do the whole remodel himself, and with the help of our boys. But.... it has always been the capital upfront that has held us back. That is the only reason we took the other "option" RK talks about with MLM. Yep, it is definately about training your downline how to replicate the process. If you don't, they are not successful, and thus the business isn't successful. Definately different than putting in effort to remodel and then sit back and manage that property. I'm so glad that it is working for you. Maybe one day, after we get this business going well enough that it gives us above and beyond, we'll be doing the same thing as you, and we'll just have to look you up and get some tips!