Karen Ruby

Get Rich Slowly

There's a really interesting post at foldedspace.org: Get Rich Slowly! concerning personal finace. J. D. Roth has read several books on the topic and has discussed the similar themes found in the books.

He summarizes the books into 4 main steps, including;

Step One: Prepare the Foundation
The first step is to lay a foundation upon which the secure home of financial independence can be   built. To prepare to build wealth, one must first eliminate debt, reduce spending, and increase earnings.

Step Two: Build the Framework
The second step toward financial independence is to construct the framework upon which future wealth can be built: establish an emergency fund, maximize your retirement investments, and begin acquiring income-producing assets.

Step Three: Finish Construction
After you've laid the foundation to financial independence, and after you've built the framework, you must then spend years (decades!) finishing construction. All that's required during this time is patience and discipline. Resist temptation. Do not accrue debt. Acquire income-producing assets; avoid non-income producing assets.

Step Four: Move Into the House
Some years later, you will wake to find that your financial house is in order. It's finished. It's ready for you to move in. How do you know when this is the case? Financial independence is achieved when your investment income equals or exceeds your monthly needs.

Well worth a read. There is a lively discussion in the comments, plus plenty of financial advice.

Rich Dad, Poor Dad - Poor, Poor Dad

I read Rich Dad, Poor Dad yesterday and while the author made some interesting points about how the rich think, all I could think about while I was reading the book is how badly I felt for his real father, the one he calls his 'Poor Dad'. Maybe it was just me, but it seemed like he had issues with his father's lifestyle and how he was brought up. The 'Rich Dad' was actually a friend's father who mentored the two boys when they were growing up.

Some of the lessons in the book include:

• The Rich Don't Work for Money
• Why Teach Financial Literacy?
• Mind Your Own Business
• The History of Taxes and the Power of Corporations
• The Rich Invent Money
• Work to Learn  - Don't Work for Money

Because I'm building up my personal finance library and see this book referenced in a lot of other finance books, I bought it from Amazon. I guess at the time this was published (in 1997), the whole approach of choosing to be rich and to think about how you could obtain money through real-estate and investments was new, but there are a lot of better written, more relevant books on the market now. I highly recommend David Bach's Finish Rich series, especially Smart Women Finish Rich and Mark Victor Hansen's One Minute Millionaire.

I found the Rich Dad, Poor Dad book to be very light in specifics. He advises you to invest in real estate, but doesn't provide a lot of details about how to get started, what to look for, how to get financing, etc. He also talks about the merits of creating your own personal corporation to hold your assets, but doesn't tell how you go about doing it. The book is more of a concept-themed book, I guess, that it gets you to think about choosing to be rich, rather than being an employee and working hard for someone else. The other books I recommended above provide a lot more detailed, specific financial information, in addition to the broader concept of thinking about money and how to use money to obtain your goals in life. A better book that deals with the choice of becoming rich is Napoleon Hill's Think and Grow Rich or George S. Clason's classic The Richest Man in Babylon.

Despite the awkwardness in reading how one 'Dad' was favoured over the other, the book was a somewhat interesting read, although overall I was disappointed.

One Minute Millionaire, Part III

"All is takes is a dream, a team, and a theme to create a stream of perpetual income". One Minute Millionaire

As I've previously posted here and here, the One Minute Millionaire book is really two books in one. One half of the books tells the story of Michelle, who after her husband dies, loses custody of her children. She must come up with $1 million dollars in 90-days to regain custody. A powerful motivation. She does it with the help of a Dream Team and through MSIs. You have to buy the book to learn exactly how.

The second part of the book provides practical advice, 24 Ahas or Principles of Wealth. The ones that resonated with me were:

The 9th Aha: Wealth is Freedom

The 10th Aha: It All Starts with a Dream

The 12th Aha: More Clarity is More Powerful

The 13th Aha: Tap Into Your Genius

The 15th Aha: Imagination Trumps Will

The 17th Aha: You Already Know the Answer

The 18th Aha: Be Congruent

The entire book is about MSI (Multiple Streams of Income) which include: Real Estate, Investments, Business and Internet. The book leans heavily towards the Real Estate route, but provides really good examples and principles for obtaining MSIs in Investments, Business and the Internet. As the author notes: 'Our objective is to awaken the entrepreneur that is hidden inside you'. Or, as in the Internet MSI case, the 'info-preneur' hidden inside you. This really spoke to me, too. We all have information inside of us that we can share with the world, some obstacle that we've overcome, or some talent we have, or some knowledge that we can share to earn us another source of income. It's certainly got me thinking.

I also liked the way the book presents the topic of increasing your MoneySkills (Value, Control, Save, Invest, Earn, Shield, Share). This topic was unique, in my opinion. I haven't seen it outlined in quite this way before.

I liked this quote, too: 'Find value or Create value' - Warren Buffet. All we have to do it look around us and be aware of opportunities. If other people can do it, then so can you (and me).

There's a really good discussion on Leverage (Mentors, Teams, Networks, Infinite Networks, Tools and Skills, Systems). I know that I need to focus more on this section in my own life.

Now I understand why there are so many reviews of this book and why people have recommended it. Check out their website here to review their book and see what resources they offer for free.

I'm recommending it, too.

One Minute Millionaire, Part II

I've just finished one-half of the One Minute Millionaire book (see this post) about how Michelle gets her children back by earning $1 million dollars in 90 days. The book is divided into two - one side of the book tells the story of Michelle, the other side provides the 24 Ahas and explains them. Michelle's story is very inspirational. What would I do if my life depended on earning one million dollars in 90 days? A lot of things would be different, that's for sure! What would you do? I'm going to provide a more detailed post and review when I finish the book. But, here's the reason for this post:

Have you ever noticed that when you start to do something new, let's say, work out, and all of a sudden you see people on the streets jogging, or notice people who are in shape or you start to notice street signs for gym memberships, etc? Suddenly, you're surrounded by fitness-related stuff where previously you would never have noticed. It's partly because you are focusing on working out and you're more consciously aware of people/places that have garnered your attention. My point is, I'm reading this book and my attention is on money-making opportunities and finance-related topics and I came across this very interesting article this morning. It was very coincidental....or was it?

The article is Anatomy of Give and Take by Robert Lee Hotz and it describes how researchers are studying the secret of trust, particularly when it comes to money.

As the article says:

The experiment was part of a new frontier in the exploration of the brain — a field called neuro- economics that seeks to understand the biology underlying economic behavior.

Our emotional brain has a hard time imagining the future, even though our logical brain clearly sees the future consequences of our current actions," said Harvard economist David Laibson. "Our emotional brain wants to max out the credit card, even though our logical brain knows we should save for retirement."

What I thought was really interesting in the article were these sentences:

When a decision forms, the brain moves faster than self-awareness.

The brain unconsciously prepares to act a measurable length of time — up to 500 milliseconds — before a person consciously decides to act.

In other words, the brain is always one step ahead of itself, calculating the potential costs and benefits of each choice at a cellular level.

I think is really interesting, because Mark Victor Hansen in the book talks about trusting your gut instinct about money-making opportunities and listening/trusting yourself, and I'm also reading Blink - the Power of Thinking Without Thinking which describes the nanosecond before we actually have thought or decided upon something. I haven't finished the book yet, but it seems to be when Gladwell talks about 'adaptive unconscious' and 'rapid cognition' he's talking about trusting your gut and there being reasons why we do the things we do, even though we may not be aware of the reason consciously. Or is that trusting your brain, which is ultimately yourself?

Just something to think about.