Conspiracy of the Rich

[Buddy]

Actually I just dismissed it.

"The Bush admin forcing the banks to lend to people who couldn't repay loans was a cluster fuck and the implimentaion of the powers to do that by the previous clinton admin opened the door for bush to do that."

Let's not forget Barney Frank and Chris Dodd for championing this little bit of legislation...the so-called Fair Housing Act

The Fed is just a giant Ponzi scheme:
http://www.humblelibertarian.com/2009/0 ... nment.html

[Teazer]

Actually I just dismissed it.

Whereas your trust in Kiyosaki's writing is impressive considering his overall sketchiness.

The Fed is just a giant Ponzi scheme:
http://www.humblelibertarian.com/2009/0 ... nment.html

The gist of that article is: in retrospect they think the Fed kept interest rates too low for too long. Their proof - because the markets got righteously shagged in 2008. Seems to lack in certain details about pretty much anything.

Here's an alternate way of looking at it: Since inflation was very low and stable, the Fed could keep interest rates low for a long period of time, allowing the economy to do really well. Unfortunately, there was a dubious opinion around that markets could regulate themselves allowing all sorts of crap to develop without oversight. Due to this lack of oversight as well as a bunch of other stuff, financial companies could use the low interest rates to approve dodgy mortgages. Investors were upset with low rates of return so shifted into more and more risky investments with the conspiracy of the rating agencies.
The problem then was not low interest rates, it was the lack of monitoring by market regulators, investors etc.

[Bär]

Lemmy told me to eat the rich. I took him seriously. They're tasty with some hot sauce.

[Buddy]

T,
As the saying goes, you're either part of the solution or you're part of the problem. I'll let you guess my position on you by quoting Warren Buffet, "Derivatives are weapons of mass destruction". Recent events bear this out. But I love your use of the word "sketchiness"- your views seem to define it.

[Chris Fleming]

Kiyosaki is "sketchy" only in that he has been successful. By that I mean, he created the whole "Rich Dad" persona about a person who never existed. People get all pissy about that fact and for some reason denounce everything he ever has written, like that makes sense.

If you look at his first book (no, not Rich Dad Poor Dad, but something called If You Want To Be Rich and Happy Don't Go To School) you can see that there was no mentor guiding him like his stories in his later books. He credits his success to his father and Buckminster Fuller. That book was mainly about the educational system and it's many flaws. That book was in all likelihood largely ghostwritten too, as seen by the co-author. Still though, his original book was a good book and it was nice to see his original thoughts.

I don't have a problem with him going on to create the RDPD theme books because by that point, to my understanding, Kiyosaki was already independently wealthy, already out of the rat race, as he would put it, from his own knowledge of investments. The money from his book sales only went to further his wealth, so I don't see any of it being out of integrity.

People don't like that he didn't speak the party line when in his first Rich Dad book, RDPD, his main message was that you house is NOT an asset but a liability. He got a lot of criticism for that, and low and behold, we see the housing bubble and collapse that followed from the people who followed the party line instead of understanding that your mortgage is the BANK's asset, not yours. Simple definitions such as an asset being something which puts money into your pocket and a liability being anything that takes money out of your pocket are excellent distinctions that everyone ought to understand, but sadly do not.

All in all, I enjoy his works and only a few of them I'd call duds. Principles are still principles.

[ShortFormMike]

re getting out of the depression.

anyone check out what the takes were for the rich back then? 94% in some instances.

so what did the rich do to keep from paying them? instead of being sneaky w/ offshore banking like today, they would just keep pouring their money back into their businesses which was good for the economy. that is real trickle down. but when the economy turns to shit nowadays, they just squirrel it away since it's not taxed heavily.

[Teazer]

Kiyosaki is "sketchy" only in that he has been successful. By that I mean, he created the whole "Rich Dad" persona about a person who never existed. People get all pissy about that fact and for some reason denounce everything he ever has written, like that makes sense.

What I get from it is he claims how much success he has had but have never seen much evidence of it, other than as an author. His continued defense of the existence of that character just made me think - okay so what else is he lying about. The setup reminds me more of Carlos Castaneda than anything else - some good ideas, but not so dependable in practice.

His focus on passive cash flow panders to /is based in the multilevel marketing viewpoint which haven't been the healthiest organizations I've encountered. In what I've come across of his ideas, he does not express clearly the risks that he is recommending people take on. This is particularly the case with his opposition to diversification which is really lousy advice for most people. For anyone that's tried to value a single company, to do it well is often a long and challenging process with with much room for error. Suggesting people try to do what Buffett did is just crazy.
He also suggests you can avoid much of the risk of failure when starting your own business if you're smart about it (i.e. be the one in ten that succeeds). The nice thing here is the successful ones provide some nice examples of success for promotional purposes. The failures think the fault was their own.
Leveraging in business to get others work for you also involves taking on a lot of risk, which he conveniently ignores.

He credits his success to his father and Buckminster Fuller. That book was mainly about the educational system and it's many flaws. That book was in all likelihood largely ghostwritten too, as seen by the co-author. Still though, his original book was a good book and it was nice to see his original thoughts.

Sounds better

I don't have a problem with him going on to create the RDPD theme books because by that point, to my understanding, Kiyosaki was already independently wealthy, already out of the rat race, as he would put it, from his own knowledge of investments. The money from his book sales only went to further his wealth, so I don't see any of it being out of integrity.

Apparently he was bankrupt in 1980. He got in with Amway. Did "If you want to be rich" in 1992. Published RDPD in 1997.
So, was he independently wealthy from some kind of Amway downline generating cash?

People don't like that he didn't speak the party line when in his first Rich Dad book, RDPD, his main message was that you house is NOT an asset but a liability.

From my iffy accounting, the house is an asset, the mortgage is a liability. People don't instantly make money by buying a house with a mortgage.

Simple definitions such as an asset being something which puts money into your pocket and a liability being anything that takes money out of your pocket are excellent distinctions that everyone ought to understand, but sadly do not.

Certainly worth keeping in mind. Maybe a different choice of words from ones already attached to particular definitions would've been a good idea.

[Chris Fleming]

"His focus on passive cash flow panders to /is based in the multilevel marketing"

Kiyosaki is no dummy. All he had to do was to mention MLM in his books and instantly there would be more sales. MLM companies would buy his books and add them in their starter package. I personally have very little respect for MLM but I don't blame Kiyosaki for partnering with companies who do have legit (although over priced by their MLM nature) products so he can increase his own profits for his own products.

From reading his works, he recommends MLM for the short term, not to get rich. He said he had a sales job with Xerox which taught him all about sales and how to handle rejection--two things an entrepreneur needs. He recommends working an MLM business for 5 years tops to gain this experience while benefiting from an organization structure that won't fire you and will give you training and support. Whether or not a person actually follows this is up to them.

As for passive income, he mainly talks about real estate, not ever saying you get out of the rat race from MLM.

"This is particularly the case with his opposition to diversification"

The party line on "diversification" is buying stocks, mutual funds, bonds, CD's, savings accounts, and keeping cash. These in reality aren't diversified at all. All paper. Bad advice.

"Suggesting people try to do what Buffett did"

Repeatedly in his books he talks about people who ask him for advice. Over and over again he says the same thing: increase your financial intelligence. He gives no "how to", no "hot stock tip".

"Leveraging in business to get others work for you also involves taking on a lot of risk, which he conveniently ignores."

I wouldn't go so far as to say he ignores it. Again, he would say that the rich are playing with everything that works in their favor, seeking to maintain control over as many things as possible that could potentially go wrong. The middle class has no control over their investments or their own self-employed businesses. Everything becomes much more risky to them. He would say that the rich understand their investments and businesses to the point to where they eliminate as much risk as possible. Without this, anything is very risky business.

"So, was he independently wealthy from some kind of Amway downline generating cash?"

Don't know. I thought I read about how he became independently wealthy from real estate and gold mine profits.

"From my iffy accounting, the house is an asset, the mortgage is a liability. People don't instantly make money by buying a house with a mortgage."

The house isn't paying you any money. People think that their home is their best investment. Sadly, as we can see today with people with upside down mortgages, this is not the case. The people who thought they could just live in one over priced house for a couple years and then cash out at an even higher over priced number learned this lesson first hand.

[chud]

No, it was WWII that pulled America out of the great depression.

Well that, and repealing prohibition. Some people are theorizing that the modern day equivalent would be to legalize pot, and bring in that huge revenue stream to turn things around. I don't know if legalizing pot would be good or bad for the country, but at this point we gotta do something to pay for all the bills coming due, so what the hell, do it.

[Chris Fleming]

Drop in the bucket, I'd say. There's a big difference between a market comparison of beer, wine and hard liquer drinkers to potential pot smokers.

[Michael]

We've given the banks $27 trillion in one year. That's a lot of friggin' pot to sell if you want to recoup the loss. But I'm all for legalizing it for this as well as other reasons.

[Darth Rock&Roll]

27 trillion? there isn't even that much money in the world i don't think.

Maybe assets etc, but I think that the whole entire world all combined amounts to less than 50 trillion in cash and assets.
all in, the whole planet.

so where is that figure getting floated from?

[Michael]

Bloomberg has been updating the amount given out since Oct. 3, 2008 when the banker takeover bill passed Congress. I think you're right about the actual assets of the entire planet. In that regard, 27 trill is nothing. The NYSE derivatives bubble is estimated at $1.5 quadrillion. Financially speaking, it is a totally false reality, a sort of wyrd black hole sucking in the true assets of anyone connected to the global financial system. That was pretty much the underlying mission of the NYSE: get as many people, pensions, city, state, federal govts, and anyone else with real assets hooked into the scam and then suck their money out of them when the bubbles burst.

Evidence of this is that no one has sued. AFAIK, not a single major loser in these bubbles has sued, nor have any of Madoff's victims sued. What does that tell you? It tells me that the principals in the brokerages and the fund managers were in on it. It has been quite successful and we keep throwing them more money. I asked Teazer this and he never answered: what financial problem can't be solved by a few trillion USD? By the time we had given the banks a few trillion and they just wanted more, shouldn't Congress have wised up? A few did (Kucinich, Paul, Grayson, and a few more), but the rest are brain dead or bought off and do nothing as the looting continues.

[Chris Fleming]

"27 trillion? there isn't even that much money in the world i don't think."

And that's the point. Money is now debt, and debt is money. Real money hardly exists if you compare it to the debt. The whole world system would collapse if debt was eliminated.

[Teazer]

Bloomberg has been updating the amount given out since Oct. 3, 2008 when the banker takeover bill passed Congress. I think you're right about the actual assets of the entire planet. In that regard, 27 trill is nothing. The NYSE derivatives bubble is estimated at $1.5 quadrillion.

For starters, I think your number's a bit on the high side, particularly for just NYSE. Also using the total value of derivatives in existence is meaningless. Whenever a trader closes a position, they sell an opposite derivative to cancel the other one they're closing. The total value from that estimate would count both, whereas in actuality there is no derivative left. You're also assuming that every derivative in existence is part of a bubble, which is quite an assumption in itself. Many derivatives are perfectly legitimate hedges that counter risk of other assets owned. When combined with other assets, again they may cancel each other out, create synthetic stocks, bonds etc.

That was pretty much the underlying mission of the NYSE: get as many people, pensions, city, state, federal govts, and anyone else with real assets hooked into the scam and then suck their money out of them when the bubbles burst.

Are you just making this up or is this based on some checkable source?

Evidence of this is that no one has sued. AFAIK, not a single major loser in these bubbles has sued,

Possibly that could also be because there's no proof it's a bubble?

nor have any of Madoff's victims sued.

Oh yes they did
http://www.scribd.com/doc/8925572/Class-Action-Lawsuit-Against-Madoff

I asked Teazer this and he never answered: what financial problem can't be solved by a few trillion USD?

I don't recall the question or context. The answer though depends on the situation and where that money's coming from.