Posts Tagged ‘Expenses’
First Impressions: Kiyosaki’s Rich Dad Poor Dad’s Conspiracy of the Rich
It's been a long time since I've delved into a Kiyosaki book; tho I still would be quick to recommend Rich Dad / Poor Dad to anyone looking for a philosophical foundation for money. I've not read the entire book (um... that's why I entitled this "First Impressions"). My first impression (see, there's the title in action) is that it should be a pretty good read. While it's clear in calling today's financial disasters the result of conspiring men and women, it doesn't seem to be a book that's overly focused on the "Oh my gosh, how can men be so evil" downer side of things. Sure, mean people suck; but let's focus on what good people with good intentions can do to improve their own circumstances. That's the direction I feel this book is heading. Most people leave school not knowing even the basic differences between a stock and a bond, betweent debt and equity. Few know why preferred stocks are labeled preferred and why mutual funds are mutual... Many people think debt is bad, yet debt can make you rich. Debt can increase your return on investment, but only if you know what you're doing. Only a few know the difference between capital gains and cash flow and which is less risky. Most people blindly accept the idea of going to school to get a good job and never know why employees pay higher tax rates than the entrepreneur who owns the business. Many people are in trouble today because they believed their home was an asset, when it was really a liability. These are basic and simple financial concepts. Yet for some reason, our schools conveniently omit a subject required for a successful life-the subject of money. +++ Okay, so there we have one of the problems. Again, I feel the problems are introduced only as a stage to introduce solutions. He later states: +++ Smart investors understand that owning a business that adjusts to the ups and downs of the economy or investing in cash-flowing assets is much better than owning a diversified portfolio of stocks, bonds, and mutual funds- investments that crash when the market crashes. +++ This is how I see the book might appeal to Self-Enterprisers. We want our business to reflect who we are as a person; but we also want to be smart and not end up broke because we're, well... to put it in Kiyosaki's words, *playing by the wrong set of rules*. Do I recommend the book? I'm still undecided. I mean, if you just need to read something, and you've already read and understand the books on my Good-Enuff-To-Get-Going list, sure. Or, if you're finding yourself in paralasis by the bad news that's being presented daily (hint, turn off the news), then perhaps the book could be a booster shot of Vitamin B (B, meaning *Business*, of course). I believe it's a great time to start and build up a business. Perhaps better than any other time in history. To be able to take the things you care about the most and use these to create value for others makes for a great life, in my opinion. And the [...]
Many Happy Returns
I'm about to describe a mistake I've made plenty of times, and judging by the deals you can find on Craigslist.org and Ebay.com, there are plenty of other entrepreneurs making it too. First of all, when do we buy stuff for our business? The good philosophical answer is, It depends. The best answer I can offer is, Never- if you can possibly do without, then do without. I'm tempted to write, especially when we're getting started, but hey, if it's a principle at the beginning of a project, it will serve us well throughout the course of all our projects. Remember, we're in a beautiful time in history for micro-business owners and Self-Enterprisers; small is cool, independence rocks, and resourcefulness is respected. It is impressive to be viewed as not trying to impress. Even still, whatever times we live in, the principle of frugality remains solid. I've fallen many-a-time for temptation that's found me buying stuff I really didn't require. This is money that could have gone toward capitalizing on opportunity as it presents itself (check out Mark Cuban's blog on this topic, here). Hey, I know... it always seems like a good idea at the time. Through enough wasted expenditures, we (hopefully) learn that we need only what we require, and require only what we absolutely need (you can always tell if a statement is wise because it repeats itself in reverse order). Once you realize that your business requires something, how you buy that something is also important. You can almost always find better prices online. You can buy used, direct from China, through auctions, locally (Craigslist.org), etc. These "better deals" are sometimes just that. You get great products for great prices (side note: I don't buy from anyone with an approval rating below 98% on Ebay). Of course, cheaper is not always better. How long does the item need to serve you? If something goes wrong with the product (like, say... you discovered you didn't need it), the convenience of running into your local Wal-Mart, Costco, or BestBuy might be a definite plus. The extra $ spent could be seen as an insurance premium for the convenience factor. However, I've also found that buying stuff online acts as yet another litmus test as to whether I really NEED a product; am I willing to wait for it to be delivered? If not, it may be more of an emotional decision than a logical one. For me, Amazon.com is a good compromise between buying from rock-bottom online prices and the convenience of a local purchase. Their customer service has been good to me, typically easy to make returns if you need to, and free shipping on a lot of their stuff. It's a consistent way to shop online. To bring this message full-circle: Let's make certain that we're making purchases that are offset by the value we create for others - and not so we can feel cool or have the latest gadget. As a Self-Enterpriser, you're doing what you love. Recognize this and we see we''ll be [...]
