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?

http://www.cbc.ca/marketplace/2010/road_to_rich_dad/main.html

If you enjoyed this article be sure to check out:

Top 3 Signs of a Scam

http://reynold-savemoney.blogspot.com/2010/07/top-3-signs-of-scam.html

The 4 Hour Work Week Scam

http://reynold-savemoney.blogspot.com/2010/07/4-hour-workweek-is-it-scam.html

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?
http://reynold-savemoney.blogspot.com/2010/07/rich-dad-poor-dad-whats-asset.html

Rich Dad Lesson: 3 Types of Income
http://reynold-savemoney.blogspot.com/2010/07/rich-dad-lesson-3-types-of-income.html

Top 4 Forms of Passive Income
http://reynold-savemoney.blogspot.com/2010/08/top-4-forms-of-passive-income.html

Know Your Debt!
http://reynold-savemoney.blogspot.com/2010/08/top-4-forms-of-passive-income.html

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

http://reynold-savemoney.blogspot.com/2010/08/top-4-forms-of-passive-income.html

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

http://reynold-savemoney.blogspot.com/2010/08/top-7-things-you-should-not-have-to-pay.html

3) Tim Hortons vs. McDonald's Coffee

http://reynold-savemoney.blogspot.com/2010/09/tim-hortons-vs-mcdonalds-coffee.html

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

http://reynold-savemoney.blogspot.com/2010/07/your-home-one-of-best-invesments-youll.html

5) Know Your Debt!

http://reynold-savemoney.blogspot.com/2010/08/know-your-debt.html

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 http://www.howcast.com/ about how to build a nest egg.

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
http://reynold-savemoney.blogspot.com/2010/08/top-4-forms-of-passive-income.html

Rich Dad Lesson: 3 Types of Income
http://reynold-savemoney.blogspot.com/2010/07/rich-dad-lesson-3-types-of-income.html


Here is a clip from http://www.howdini.com/ 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: http://reynold-savemoney.blogspot.com/2010/09/whats-your-latte-factor-automatic.html

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?" http://reynold-savemoney.blogspot.com/2010/08/pay-off-debt-or-invest.html

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 http://www.howcast.com