Key Points from Conspiracy of the Rich

I am reading a lot of financial books right now, and I plan to provide the key take aways that I get from the books, not necessarily a full review of each chapter. In fact, I’m not even going to outline the full “8 New Rules of Money” from Conspiracy of the Rich, instead, simply the main points that I found of value and how I’m going to apply them to my life. I have seen a lot of controversial blog post about whether Kiyosaki offers sound advice or just fluff, whether he has a legitimate story for his background or not, etc. My feeling is that he offers some good big picture suggestions that you then have to spend time researching on your own and deciding what will work for yourself.

Rating: 3 out of 5 stars

Historical Key Points:

There is a lot of information about the history of the dollar, why banks can ‘print money’ and how our government will essentially never stop the bail out cycle because its in the federal gov’t and rich classes’ best interest to bail out the big banks. The purpose of outlining his beliefs of the conspiracy is to motivate those that read his book to action. To take control of their own financial situation, make educated and sound financial decisions, and increase their financial IQ as he calls it.

Financial Education Key Points:

Key Point #1 - Invest in all four areas of investment for true diversification.

1 – Business (Owning one)

2 – Income producing investment real estate

3 – Paper Assets (Stocks, bonds, funds)

4 – Commodities (Gold, silver, oil, platinum)

This may be easier said than done, but it makes a lot of sense to me. If you simply own your home (a liability as I have found out as of late) and have a few savings and a 401k accounts, you are putting all your eggs in very limited baskets.

How I’m applying this: The items from above that I have control over now are #1, #3 and #4. I am and have been a small business owner, but I want to be more strategic about a business plan in 2010. I own stocks, bonds and funds in my 401k,  but I am not happy with them. I’m going to move my Traditional IRA to a Roth IRA when I can figure out how to do it, and determine what is best to invest it in. I plan to look into and research investing in commodities because this is something that can be done with a smaller initial investment.

Key Point #2 – Learn how to sell. Him & Trump recommend doing a network marketing type of business to learn the ins and outs of selling.

How I’m applying this: Whether you agree with this point or not, it is inevitable that to be successful you have to build confidence in yourself, who you are, and what you offer. Don’t mistake confidence for arrogance or not being humble. They are  different things. I’m working on building my brand for myself, and what that means. I am in the marketing profession right now, and understand that if you don’t get people’s awareness and interest in your offerings, your business will not succeed. I believe you can sell your products or services without compromising integrity, value and trust with your potential customers. That’s what I plan to do.

Key Point #3 – Derivatives. Kiyosaki discusses how money can be a derivative of your financial knowledge. He defines derivatives as simply being a off shoot of something or something that comes from something else. So, instead of selling his own books by himself, Kiyosaki sells licenses to reprint his books to many publishers, and gets a derivative of his book, the product, through royalties.

How I’m applying this: I like this concept when applying it to yourself and what you can offer the world. Stop thinking about your hourly wage and start thinking about what value you bring and how to make it into value for others. This will lead to derivatives of, well, you. I have already been thinking of ideas for some time now. Applying all or any of these iddeas, and focusing your efforts (which Kiyosaki also says is key) is the hard part!

Key Point #4 – He challenges his readers to push the boundaries that they have set in their life. He says that you shouldn’t think, look or act poor because the world treats you as you treat yourself. This concept gives me a lot to ponder. He uses examples such as: he managed to drive his dream car by bartering services. He managed to live by the ocean by trading services as well. This point was of interest to me. As humans we often don’t think of creative ways to solve our biggest problems because we are so stuck in what we know or believe. However, there is always another way, it usually just involves accepting different options, and putting yourself out there. The concept of bartering is back big time these days since so many of us are struggling financially, and cool websites like Swap Mamas and various others make it easy to do nationally or locally. When you don’t have enough money to get what you need, its a great idea to find someone willing to trade you for something you do have or can do that has value.

How I’m applying this: I have often traded my design services with others for what their business offers. This is a win-win for both of us. I’m interested in finding new, creative ways to make what I want happen in life.

Despite the fact that Kiyosaki spends a little too much time (1/2 the book) on the history, and a little too much time discussing his game, Cash Flow, I found this book to be very useful and thought provoking for my next steps towards learning and improving my financial knowledge.

What are your thoughts on Conspiracy of the Rich? What are you going to apply to your life?

Related Posts

• November 11, 2009 -- Financial Ignorance and Conspiracy of the Rich

Review of the Money Book Geared at Age 20 Something by Suze Orman

Orman’s book has some helpful tips, but in my opinion is much to basic for the real needs of the 20 something year olds. It feels like we’ve been typecast and I personally didn’t relate to much of it. Perhaps its geared towards a younger demographic than my 28 years.

The design of this book is simple and to the point, perhaps with the idea that “young” people don’t have the patience to read without quick tips? It has a reference to go on to her website for additional information such as calculators and feedback. (No thanks, too much work for me, if I’m reading a book, I want the info I need right there in the book). I appreciate that she was writing a book for a younger generation, but I felt that, at least for where I’m at in life, her advice was much to basic.

Rating: 2.5 out of 5 stars

Some of the key points included:

• Make sure you have a good FICO score
• Its okay to have “some” credit card debt if you only use it to pay for necessities that you cannot otherwise cover with your measly entry-level income (helps you build credit anyway)
• Stop spending money on frivolous things like going out to dinner a lot (obviously!)
• Try to save up an emergency fund (not 8 months worth, she realizes that’s not realistic for those living paycheck to paycheck)

Take Charge and Make Sure You are in a Career not a Job

The point that I found most interesting is her recommendation to make absolutely sure that you are choosing a career that is what you want to spend the next 30 – 40 years doing. If you’ve picked a job just for the money, then why not use the time you have now, when the economy is down and out, to better your education. Not necessarily grad school or that type of pricey education either. The education that you can get from networking, exploring what truly interests you in your free time, and giving real thought and dedication to ensuring you have chosen a career and not a job.

I’m thankful that I love what I do. Perhaps I will move slightly in one direction or another, but I do feel that my career is headed in the right direction.

What about you? Do you think its okay to work for a job or is important to find a career, even if it means perhaps a temporarily financial set back?

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Day 16: Rich Dad’s Conspiracy of the Rich

Robert Kiyosaki, author of, Rich Dad Poor Dad took a new approach with his current book. He’s releasing chapters of his latest book, Conspiracy of the Rich: The 8 New Rules of Money, online — for free and asked for input and interaction. Its now available in full for purchase.

I find this very refreshing, and I’ve read that it has been widely accepted and generates a lot of interest and response. What a cool way of integrating the online channel, social media, and a general desire to help people.

Since then, he is now in the process of writing a book, “The Four Main Causes of Negative Emotions”, and is posting some of this on his Conspiracy site as well.

I read Rich Dad Poor Dad, but didn’t know what to think about investing in real estate given the current economy. I’ll be buying this book to read and reflect on.

On his site, he starts by discussing the political and economic climate of America that led us to where we are today.

He goes on to suggest how imperative it is that youth (and everyone) is educated about the difference between taxes, debt and inflation. He believes that truly understanding this will allow you to make better financial decisions for your life.

8 Rules of Money

The beginning of the book defines the 8 Rules of Money – in terms of the “Conspiracy” or Old Rules and New Rules.

For example: Old Rule: Save Money. New Rule: Spend. Don’t Save. Rich people know that you can’t make money by saving it slowly. You have to invest it.

Old Rule: Diversity. New Rule: Control Your Money.
Invest for cash flow, not for capital gain. He says a new rule is to Focus Your Mind and Money. Not diversity. (What does this mean? No idea… Yet.)

A Great Excerpt from his Online Book

“‘Is the love of money the root of all evil?’ I say no. I believe it is evil to keep people in the dark, ignorant about the subject of money. Evil occurs when people are ignorant of how money works, and financial ignorance is an essential component of the conspiracy of the rich.”

He also states that investing blindly in stocks and your 401K is an old system and will not work.

I believe up until two weeks ago, I fell into the category of the “financially ignorant”. It got me no where, feeling stuck, lost and frustrated. I wouldn’t say I know that much yet, but it is a journey after all, and it’s only been 2 weeks!

Does anyone have any thoughts on Kiyosaki’s site and new books?

photo by Ninette Luz

Related Posts

• January 1, 2010 -- Review of Conspiracy of the Rich Book by Robert Kiyosaki
• December 21, 2009 -- Be the Change You Want to See in the World
• November 12, 2009 -- Who Am I Writing For?
• October 26, 2009 -- 365 Days to Financial Freedom
• January 6, 2010 -- 5 Steps to Happiness with a Personal Finance Twist

T Harv Eker’s Millionaire Mind Takeaways

As I mentioned in my last post, there are many things that best-selling author and coach, T. Harv Eker (“Secrets of the Millionaire Mind”) suggests that differ from mainstream financial advisers that can I relate to. In the short time I’ve started to search, I’ve found that most advisers recommend reducing your debt as the number 1 best way to be financially well off. It’s not that I don’t want less debt, because I do.

But I tend to agree with Eker that its better to focus your energy on creating good financial habits, such as allocating amounts of your income regularly, rather than only focusing negative energy on paying off your debt.

Eker’s Concept of the 6 Investment Jars:

• (FFA) Take 10% of your after tax dollars towards a financial freedom account (You can never, ever, ever touch the money that you invest, only the profits that come from it. Invest it in passive income opportunities)
• (NEC) Take 50% towards paying for your necessary expenses
• (EDU) Take 10% towards education savings (Courses, books, seminars, software, etc invest in your self)
• (LTSS) Take 10% for long term savings funds (ie Travel, Contingency (instead of the negative term, Emergency), Kid’s College, Car expenses, etc)
• (GIFT) Take 10% towards charity and gifts
• (PLAY) Take 10% and put it towards an account that you can do whatever you want with, but you HAVE to spend it! Do something luxurious like rent a limo, order expensive champagne, etc

Note: If you are self employed, its highly recommended that you have another jar or ‘account’ that you put your tax dollars in before you separate it out into the above accounts.

There are other variations of this system out there, but for me, the concept of this one sounds worth a try. Eker’s theory is that you have to actually buy jars, as you will have a visual reminder of what you are saving and working towards.

My husband and I have implemented this system, with clear shoe boxes, and it reallly helps for us to remember what we need to work towards.

As a speaker, Eker has many quotes and pearls of wisdom. Here are just a few.

T Harv Eker Quotes

“You have to believe to see.”

“The number 1 reason most people don’t get what they want is that they don’t know what they want.”

“What you hear, you forget; what you see, you remember; what you do, you understand.”

Has anyone used the jar method successfully?

Related Posts

• November 8, 2009 -- Best Kept Secrets of How to be a Millionaire & Other Trust Buster Phrases
• December 21, 2009 -- Be the Change You Want to See in the World
• November 21, 2009 -- Review of FiLife: Your Financial Lifeline
• November 14, 2009 -- Top 3 Barriers in My Journey Toward Financial Freedom
• November 12, 2009 -- Who Am I Writing For?