Wednesday, September 29, 2010

Rich Dad Scam

I recently watched a video from CBC marketplace in which Robert Kiyosaki author of Rich Dad Poor Dad was exposed as a fraudster. I would not immediately discredit all his work. I do think he writes entertaining, easy to understand, insiteful personal finance books. However, Robert may have gotten too greedy with his latest attempt at increasing his earnings.

In his books he often talks about fundamental concepts on how money works and how important cashflow is rather than looking for large jackpots (or what he calls capital gains). Robert Kiyosaki has many investments that brings him cashflow such as: rental property, stocks, board games, royalties from books, and licensing of his Rich Dad brand. Licensing of his Rich Dad brand is where Robert has gotten into trouble. Robert Kiyosaki has relentlessly marketed his Rich Dad brand through his books and educational board games. He now uses his brand to sell educational seminars. Robert does not actually teach any of these seminars but licenses out his Rich Dad brand to slick huckster salesman to sell expensive seminars that provide very little value to their students.

Check out this link from CBC Marketplace which has a video that exposes Robert Kiyosaki's grave mistake. It seems that Robert's greed may have irreversibly devastated his Rich Dad brand which he worked so hard to build. I think that his books still have merit and are still worth reading. However, some of Robert's choices with his Rich Dad brand were not well thought out, unethical, and may cost him his life's work.

Road to Rich Dad: Who's Getting Rich Off Rich Dad?

If you enjoyed this article be sure to check out:

Top 3 Signs of a Scam

The 4 Hour Work Week Scam

Saturday, September 25, 2010

Conspiracy of the Rich

Robert Kiyosaki (a.k.a. Rich Dad) author of Rich Dad Poor Dad, a bestselling personal finance book, has recently come out with a book entitled the Conspiracy of the Rich. This article does not only provide a synopsis of the book, but I also wrote this in response to some comments about my last article. The comments were addressing today's education system in Canada and how it avoids teaching children valuable personal finance information. Schools rarely teach basic money management, the ideas of debt and interest, or how to invest for the future. According to Rich Dad, this is not an accident.

Our school system is based on the early 20th century Prussian education system. Back then Prussia was a communist country and the education system was training children to be future government employees. Under these circumstances, Prussia needed workers that would obey authority and stay in line with political agendas set by the communist dictators. In order to train children to become docile, who would later become adults in the work force, they designed an education system similar to the one we have today.

This education system starts with a teacher at the head of the class with 20 to 30 students sitting and listening to what the teacher has to say (who is the authority figure and disciplinarian). The students are constantly searching for praise from the teacher, while trying to avoid punishment. The students therefore have to search for the "right answers" and abide by the rules. This fosters a herd mentality which is perfect for a communist dictatorship who is trying to train the next generation of government workers. So in this environment you're not rewarded for trying new things or questioning the authority of others.

This education system has it's advantages. It is an efficient use of human resources (i.e. 1 teacher to 30 students). However, we can clearly see the drawbacks since it stomps out creative ingenuity and independent thought. Why would the uber rich want to have an education system like this. First off, the uber rich own large corporations and would rather have you as an employee than an entrepreneur who could later become their competitor. The rich, like the communist dictators, want docile employees who are hard working and who don't question their authority.

This brings us to the comment of why personal finance is not covered well in our current education system. The financial institutions such as banks (i.e. TD Canada Trust, Scotia Bank, Royal Bank of Canada, and Bank of Montreal) are a multi-billionaire dollar industry. They are in the business of selling financial products (i.e. mutual funds, mortgages, credit cards, etc...). The more financial knowledge you have, the less money they make. I know that banks care about their bottom line just like any other company, so it is very plausible that they don't really want you to have a good handle on your personal finances. After all TD would love you to pay management fees for their mutual funds (because it is too difficult to manage your own money) and have you making minimum payments on your credit card (because nobody told you that 19% interest is highway robbery).

Conspiracy of the Rich could just be a cracked out theory, like Major League Baseball trying to steal our thoughts (Simpson's reference). However, Kiyosaki makes a plausible argument and at least an entertaining read. Hopefully, our education system will change and start to teach the leaders of tomorrow better personal finance management, until then be sure to bookmark Cash Saving Tips.

Check out this video from Rich Dad about his new book:

If you like this article also check out:

Rich Dad Poor Dad, What's an Asset?

Rich Dad Lesson: 3 Types of Income

Top 4 Forms of Passive Income

Know Your Debt!

Wednesday, September 22, 2010

Top 5 Articles from Cash Saving Tips

When I first stated this thing I had no idea that it would be possible to accumulate more than 40 articles. I would never have kept writing if it wasn't for the readers that came to this website. Watching the unique visitor count increase has really made me believe that I was reaching readers that were concerned about their personal finances. Thanks again for taking time out to read these articles. I hope you've found them entertaining and informative.

According to the statistics of this site, here are the top 5 articles (by pageviews):

1) Top 4 Forms of Passive Income

2) Top 7 Things You Should Not Have to Pay For!

3) Tim Hortons vs. McDonald's Coffee

4) Your Home - One of the Best Investments You'll Make

5) Know Your Debt!

Let me know which article you liked best by leaving a comment. I'll be sure to research and write more on those topics.

Keep saving!

In addition to the top 5 articles here's a nice little clip from about how to build a nest egg.

Monday, September 20, 2010

Rules of Retirement Have Changed!

We all occasionally daydream of the day when we don't have to work anymore. Images of feet in the sand and a cold beer in hand come to mind. For most of us retirement is far from reality and it may seem to far away to think about. Now with the recent changes to company and government pension funds retirement may seem more like fantasy than reality.

First of all it's important to note that the rules of retirement has changed. In the past people would work at one company for 30 years or so and get a pension where 70% of there annual salary would be paid to them for the remainder of their life. This type of retirement plan is known as a defined benefit plan. Most companies have found that a defined benefit plan is too costly to their bottom line since they have to ensure they can pay for employees that are no longer working. Therefore, companies are moving towards a new type of pension plan known as a defined contribution plan. The way this pension plan works is the employee contributes a certain portion of their pay cheque (usually 5-10%) into a registered retirement savings plan (RRSP) and the company matches the contribution.

There is a dramatic difference between these two types of pension plans. The pro to a defined benefit is that the company will ensure that you get a steady pay cheque after you retire (unless the company goes bankrupt). The con is that you have to stay with the same company for 30 years, which is happening less and less these days. The pro to a defined contribution plan is that it is usually portable, which means it travels with you if switch to a different company sometime down the line. The con is that now the employee is responsible for the management of their own retirement fund (to a certain extent, more on this in future articles), so if the markets perform horribly just as you are retiring you are up the creek without a paddle.

So now that we know the rules have changed and that our retirement is now our own responsibility, what can we do to ensure that we can retire? The simple answer is to set a goal, calculate your current cost of living, and to save and invest wisely so that your savings and passive income can support your cost of living. This is one article that can lead to endless topics, but the most important step is to realize that the retirement rules have changed and we need to change our financial planning accordingly.

For more on passive income check out the following articles.

Top 4 Forms of Passive Income

Rich Dad Lesson: 3 Types of Income

Here is a clip from of David Bach the author of Start Late, Finish Rich on saving for retirement:

For information on "The Automatic Millionaire" by David Bach check out:

Saturday, September 18, 2010

Start a Change Jar

This is a nice little tip that can add up to big bucks. All you need is a container, an old fashion piggy bank would be ideal. The picture above is a high-tech change jar that keeps track of your change on a digital display. You would be surprised how much you can save by putting all your spare coins/change into a jar when you get home at the end of the day.

Try not to reach into your change jar/container for little expenses like coffee or snacks. Let the change build up into a nice chunk of savings. If you designate this money for a specific savings goal it will be less tempting to dip into it. Label the change jar with your savings goal. Here are a couple examples of common saving goals: family vacation, retirement, paying down debt, child's education, new vehicle, or that flat screen tv you always wanted. Check out an archived article about paying off your debt: "Pay Off Debt or Invest?"

Having a change jar won't just help you meet your savings goals faster you'll also avoid carrying around a bunch of heavy coins that jingle in your pocket. Leave it and let it build up until it's full. Than go to your local bank and ask for some papers to roll your coins up and put it into your designated savings account. This can be your automatic savings plan.

Check out this additional savings tip from

Thursday, September 16, 2010

I Scream, You Scream, We All Scream for Ice Cream!

We scream for Chapman's Ice Cream that is. Chapman's ice cream is hands down, the best value ice cream in Canada. The prices for Chapman's ice cream is often better than generic no name/store brand ice cream.

I recently received a free $5 gift certificate in the mail for any Chapman's ice cream product. This sounds too good to be true, but I'll tell you how I got it. All you have to do is go to their website and fill out their online comments form.

Be sure to request a promotional gift certificate and write something that you like about their product in the comments box (i.e. like their great prices). Also, include your mailing address so they can mail you the gift certificate. It will take about 3-4 weeks for the gift certificate to arrive in your mail box, but when it does it'll taste so sweet!

Here's an additional savings tip on how to make your own ice cream at home (source:

Monday, September 13, 2010

Knock Years Off Your Mortgage and Save Thousands in Interest With This Simple Tip!

One of the proudest moments in our lives is becoming a home owner. To provide your family and loved ones a place to live and grow up is one of life's feelings. A part of realizing that dream is choosing the proper financing, since most of us will not have all the money up front to purchase a home all at once. Therefore, it is important to understand our financing options when approaching a bank or other lending institutions.

In my last article I reviewed a book by David Bach entitled The Automatic Millionaire ( This was a great personal finance book with a lot of solid tips. At the very end of the article I included a short video about how to knock years off your mortgage and save thousands of dollars in interest. The simple trick is to increase the frequency of your mortgage payment. You don't even need to increase the amount that you're paying, just the frequency!

Here's how it works. The bank constantly charges you interest on your loan. The interest is calculated based on the principal that you owe (the total amount you borrowed). With each mortgage payment you make, some money goes towards paying the interest (cost of borrowing) and paying the principal (the original amount loaned). Therefore, with each payment the principal decreases a bit. So the next time around the interest that accrues will be slightly less. This is the magic of compound interest in reverse. By changing your mortgage payment from monthly to biweekly you can save thousands and knock years off your mortgage.

Here's an example to help illustrate the amount of time and money you can save by increasing your mortgage payment frequency:

Mortgage amount: $200,000
Interest Rate: 5% fixed interest rate
Monthly Payment of $1200 or Bi-weekly Payment of $600 (same amount per month)

In this example the mortgage would be paid off 3 years and 13 weeks earlier. The amount of money saved in not paying interest would be $22,800. This could be your hard earned money that would otherwise line the pocket of your banker. Change your mortgage payment frequency as soon as possible!

Pay off your mortgage even quicker with tips from this video:

Friday, September 10, 2010

What’s Your Latte Factor? The Automatic Millionaire

The Automatic Millionaire is a great personal finance read by David Bach. Bach has written a wide assortment of personal finance books geared towards different audiences. The Automatic Millionaire is his most popular book and the one that applies to most people.

The book starts with a couple approaching Bach in their late 50’s worried about their finances. The couple approaches Bach for advice, trying to see if they are prepared for retirement. The couple has a dual income of approximately $60,000 a year, which is not a huge salary but provides them with a decent living. Bach takes a quick look over their finances and is surprised to see that the couple is well prepared for retirement. The rest of the story is about how this couple was able to become financially free on an average salary. Here are 3 valuable lessons you’ll find in this book.

1) Pay Yourself First – It is really disappointing whenever we get a pay cheque only to see how much gets taken off the top. The first person who usually gets paid on payday is not you but the government. Money is taken away in the form of Canada Pension Plan, income tax, and employment insurance. In addition you may have to pay a small fee for company benefits and insurance. All of these deductions can add up to as much as 30% depending on your tax bracket (it can be as high as 45-50% for people making over 100k). To bypass all of these deductions you can contribute to a Registered Retirement Savings Plan (RRSP), which can grow untaxed until it is withdrawn. When it is time to withdraw from your RRSP you should be retired, therefore your income is much lower (thus you'll be in a lower tax bracket) resulting in less income taxes. Another way to bypass tax deductions is to contribute to a Registered Education Savings Plan for your children. Either of these plans are great for paying yourself first and not the government.

Bach also suggests setting up an automatic withdrawal from your chequing account on payday into a savings account. It’s good to start with a small amount, like $5 or $10 each payday. Bach suggests that you can gradually increase this amount over time so that it doesn’t drastically change your lifestyle. Over time you’ll see a nice bundle of savings in your account. Another excellent personal finance read with the "Pay Yourself First" lesson is The Wealthy Barber. Check out: for more information.

2) Latte Factor – Bach defines what he calls the Latte Factor, which are the dollars that escape our grasp on a daily basis. Often these small costs build up to large quantities of money. Bach gives an example of somebody who buys a Latte each day from Starbucks. Usually it’s only about $2, but while they are in Starbucks they decide to get a croissant and biscotti which adds up to $6. Do this for 5 weekdays and we’re already at $30.

With 52 weeks in the year and 3 weeks of vacation that’s 49 weeks of Starbuck Lattes and snacks. This adds up to a whopping $1,470! The thing about the Latte Factor is that usually we spend such small amounts on a daily basis we don’t even notice or give it a second thought. You don’t have to give up your latte all together, but when you are conscious about your spending you may be able to cut it down from 5 times a week to 2 times a week. Another important note is that when we’re in a position where we’re spending it’s easy to add in a couple extra treats. For instance in our Starbucks example, it’s not difficult for us to pick up a couple snacks when all we were planning to get was a latte. If we’re conscious of the extras we can also try to cut our expenses there.

3) DOLP – this stand for Dead On Last Payment. This is Bach’s system to prioritize paying down credit cards. This system could also work on other loans such as student loans, mortgages, car payments, etc... . Really this system can apply to all loans with the goal of minimizing interest costs. See this archived article for more details:

Check out this book at your local library. With these tips you can be on your way to becoming a Millionaire Automatically!

Here's an extra tip from David Bach to take 5 years off your mortgage!

Monday, September 6, 2010

Car Rentals: So Many Options

Renting a car is an inevitable part of taking a trip. There are always several things to consider when renting a car, here’s one less thing to think about. Recently I had to rent a car from Hertz. I rented a sub compact which worked out beautifully for what I needed. When I was at the counter the clerk asked if I wanted to pay for a full tank of gas, so when I returned the car I wouldn’t have to worry about filling it. He explained that they would fill the tank with gas at a 10 cent discount to the current gas price. At the time the gas price was 90 cents/litre, so Hertz would fill the tank for 80 cents/litre. For instance, if the car has a 40 litre tank the cost would be $32. This sounded like a great deal so I said yes.

The problem with this deal is that you have to bring the car back with no fuel in the tank to receive the maximum value. It is extremely difficult to plan your trip so that you can bring the rental car back with absolutely no gas left. So any gas left in the tank will add to the cost of the discounted gas from the rental agency. You will probably be paying more to fill the tank for your rental car. This is only a good deal if you know exactly how far you are going and how much gas you’ll be using. Unless you can bring the rental car back running on fumes, you’re better off just filling the car back up and bringing the car back with a full tank yourself. Don’t get gas from the rental car company! Always bring it back with a full tank.

Check out this clip from about saving on your next car rental

Friday, September 3, 2010

Tim Hortons vs. McDonald's Coffee

The coffee wars are on in Canada. Canadians love their warm cup of joe in the morning. According to the Coffee Association of Canada, Canadians drink 2.6 cups of coffee a day. Tim Hortons is Canada's favourite low cost cup of coffee, with over 2,800 stores in Canada. There are a lot of competitors that want to get in on some of Timmy's market share, of all the low cost coffee shops available in Canada (i.e. Coffee Time, Coffee Culture and Country Style) I find McDonald's provides the best value.

Here are some quick statistics.

Not only do you get more coffee for less money at McDonald's, you can also refill your coffee when you're drinking your coffee in McDonald's. That's exceptional value! I also really like the taste of McDonald's coffee. I might even say that it tastes better than Tim Hortons coffee, but that may be unpatriotic. Next time you're getting your morning cup of joe give McDonald's coffee a shot.

For you Americans here's a little clip about the Starbucks vs. McDonald's coffee wars in the U.S.A.

Also check out the very popular Starbucks Ghetto Latte article: