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So what's going on with this board? It seems everyone checked out for summer vacation and forgot to come back...

We're fast approaching New Year's resolution time and I'm wondering what important (or not so important) financial lessons people have learned this year? Assuming that everyone reading this board has also read the works of Dr. Stanley, what influence has his research had on any financial decisions or directions you have made or are planning to make?

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So what's going on with this board? It seems everyone checked out for summer vacation and forgot to come back...

It seems that everyone was in agreement about LBYM, but discussions polarized on investing vs. paying off the mortgage.

We're fast approaching New Year's resolution time and I'm wondering what important (or not so important) financial lessons people have learned this year?

I haven't made a New Year's Resolution for decade!

What I learned was that it is possible for me to stick with my investment strategy in spite of market activity, even though it goes against the feelings, and so far when people tell me what had been a good investment just a few years ago, my asset allocation plan was leading me in that very direction, so I am building up confidence that I am indeed doing the right thing, even in face of overall portfolio loss.

Assuming that everyone reading this board has also read the works of Dr. Stanley, what influence has his research had on any financial decisions or directions you have made or are planning to make?

I have read The Millionaire Next Door but not The Millionaire Mind. I was surprised as I read The Millionaire Next Door just how many of those things fit me--not everything, but the majority did. It didn't really give me any life-changing insight, but acted more of a confirmation that I was indeed living correctly: using "artificial scarsity" in my case (instead of budgeting) to help me live below my means, avoiding consumer debt, buying used cars instead of new since used cars take care of my transportation needs, reasonably inexpensive clothing, buying some things in bulk where it makes sense for me to do so.

I am planning to continue living below my means, investing as much as I can and according to my investment plan, and try to avoid picking up expensive tastes or expensive hobbies.
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It seems that everyone was in agreement about LBYM, but discussions polarized on investing vs. paying off the mortgage.

I did notice thist ever-ongoing discussion wrapped in many threads. It seems to me that both TMND and TMM offer much more than just information about mortgage-debt held by millionaires.

For example, I found choice of occupation and level of education very interesting. Occupation choice and its accompanying accoutrements seemed to play largely in whether or not a person would be an extraordinary accumulator of wealth v. stuff v. debt. Also, college and graduate studies, usually highly regarded educational choices and historically an option reserved for those most affluent, cuts substantially into what could otherwise be income-generating time and can actually "force" a person into a lifestyle not warranted by income later earned. Case in point, college professors. Well-schooled, but when finally entering their field in an income-generating capacity, very poorly paid considering the amount of time and money invested into education. Compare this scenario to that of the bus driver cited in TMM. Low-paying job, but because of the lack of prestige, no need to buy fancy clothes or throw expensive dinners/parties. Additionally, because of the increased income-generating years available, more time to invest.

I have read The Millionaire Next Door but not The Millionaire Mind. I was surprised as I read The Millionaire Next Door just how many of those things fit me--not everything, but the majority did. It didn't really give me any life-changing insight, but acted more of a confirmation that I was indeed living correctly: using "artificial scarsity" in my case (instead of budgeting) to help me live below my means, avoiding consumer debt, buying used cars instead of new since used cars take care of my transportation needs, reasonably inexpensive clothing, buying some things in bulk where it makes sense for me to do so.

I also found that I do many of the same things cited as lifestyle choices enabling s.o. to become a millionaire. Unfortunately, I am far from being one. Working on it, but I have a LLLLOOOOOONNNNNGGGG way to go. In fact, this was my 2001 NY's resolution and will likely be my 2002 one as well. Because of my resolution, I have made a lot of lifestyle changes this year and have dragged my family along with me. While I have been LBYM through-and-through for many years, I am much more so this year.

Answering my own question posed in a previous post, what I took from both books, but in particular The Millionaire Mind, was that self-employment in so many ways is actually less risky than working for someone else.
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Also if you read the Rich dad, Poor Dad series, play the game cashflow it directly relates to your level of mindset, the smart LBYM and stockpile cash for the market / RE / business crash to get stuff cheaper and hangon for the long term (buffet prinicple). Hopefully other people will get on this board.

MGL
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Also if you read the Rich dad, Poor Dad series, play the game cashflow it directly relates to your level of mindset, the smart LBYM and stockpile cash for the market / RE / business crash to get stuff cheaper and hangon for the long term (buffet prinicple). Hopefully other people will get on this board.

I haven't read nor heard of the "Rich Dad, Poor Dad" series. How many books comprise this series and who is the author?

Is the cashflow game a real game, as in Parker Bros., or is it an exercise found within this book series?
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"Rich Dad, Poor Dad" is a book by Robert Kiyosaki. He tries to challenge some of the most sacred notions of investing, including some that fool.com espouses. He advocates non-traditional styles of investing such as tax lien certificates and buying property with zero downpayment and then renting it out. Tends to focus on becoming an entrepreneur the "easy way", rather than working for someone else & investing the surplus.

Some people worship Kiyosaki; others think he's a con man just saying things people want to hear so he can sell more of his books. Some fact-checking has not been able to verify some of the autobiographical details Kiyosaki included in his books -- take what you read with a grain of salt.

For more information, please see
http://boards.fool.com/Message.asp?mid=16238167
http://boards.fool.com/Message.asp?mid=16230756
http://www.johntreed.com/Kiyosaki.html
http://www.savewealth.com/taxes/taxliens/
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The cashflow game is a game created by Kiyosaki to illustrate the principles found in his books. You have a lot of freedom to choose what you want to do, but if you choose to work at a job and invest the surplus, you will lose. If you invest in real estate, tax lien certificates, and network marketing, you will win.

The game costs around $150-200. Kiyosaki disciples say that the high price is necessary to get you to take the game seriously and to cement the lessons in your mind. Kiyosaki cynics say the high price is just to make money for Kiyosaki, and anyone who would pay that much for a mediocre boardgame is so blindly devoted to Kiyosaki that of course they'll do everything the game is teaching.
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Thanks for the links!

Robert Kiyosaki...advocates non-traditional styles of investing such as tax lien certificates and buying property with zero downpayment and then renting it out.

I thought you could only buy property with zero down if you met certain criteria, one of which is that you must be occupying the building. And even if this isn't a stipulation for zero down, why wouldn't you want to put down at least 20%? You're still able to charge the same rent, save money by not paying PMI, take advantage of depreciation by renting, and with equity, pay less interest, and have more borrowing power.

What am I missing?
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I think the idea is supposed to be that you are able to increase your leverage ratio and thus act as if you were richer than you currently are, thus making it possible to get into richer deals.
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I think the idea is supposed to be that you are able to increase your leverage ratio and thus act as if you were richer than you currently are, thus making it possible to get into richer deals.

Oh. So this would be the Warren Bluff-it style of investing? What is the definition of leverage ratio?

I'm still stuck on the mechanics of zero-down without occupancy.
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leverage ratio = ratio of assets to equity; if you own $200,000 of stuff and your debt is $100,000, your equity is $100,000 and your leverage is 2:1. If you own $800,000 of stuff and your debt is $700,000, your equity is $100,000 and your leeverage is 7:1.
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One way one might buy a property with zero down payment is to buy a property that has an assumable mortgage.

Another way is for the seller to take a note for the entire purchase price.

Another is to get a personal loan for the down payment.

I've heard of combinations of these and other tactics. All legitimate but hard to execute.
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No money down according to RK is quite risky, similar to borrowing on margin to buy stocks, the less you put down , more risk of loss. He talks about it because people think only money can make money which is poor / middle class thinking, the rich do it by "printing money", taking co. public, using lease option in real estate, corps to lower taxes, etc leverage to control and create much more money, the middle class buying stock, RE thru the usual means (middle class method). Nothing wrong by that, he just wants you to be more aware of the other methods, up to you to do with the info. People love and hate him, I found his stuff true in my limited experience so I rx at least read his books and play his games, much better stuff then other things I spent money on. And yes, his CD info ad goes more detail then his books.

MGL
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