Special series - how to survive a recession, part 4
I have written several articles on how to survive a recession here on my ideas on how to become rich site. You can navigate to the articles on how to survive a recession here:
Special series - how to survive a recession, part 1
Special series - how to survive a recession, part 2
Special series - how to survive a recession, part 3
In this post I shall be dealing with ideas on how to survive a recession if you happen to be hard hit by a recession. The first and most important idea is that prevention is always better than cure, and that sound financial planning and sound savings plans should have been the most important thing before any recession strikes, or for that matter, before any depression strikes (where a depression is basically a worse and prolonged version of a recession).
The question is: how do you survive a recession if you happen to be hard hit by one? Here are some practical ideas on how to survive a recession if you happen to be hard hit by one... good luck!
1. Education is important. Get more education and more skills.
There are many types of education, some professional and some academic. Now is the chance for you to pursue higher education or some form of learning where you can acquire new skills and new abilities that can be applied to finding and maintaining a job. The key fact is that in the 21st century, earning money will be tied to knowing skills and knowledge that can help you make money and help you work better. Education is more important than ever before to help you make money, and people who skip school or have not attained education are more likely to suffer from structural unemployment. That is not a palatable fact, but it is true that to earn money in the new knowledge based economy that is globalised, knowledge, education and skills are key critical factors to earning money and making a living.
With respect to financial education, sites like mine provide ideas, and you can actually get financial certification that will put you in good stead when the economy recovers. Try an MBA, or an accountancy degree, or some other financial certification such as an ACCA, CFA, CPA and the like, as these financial certifications will be very useful to you, job-wise as well as financial knowledge-wise. Prevention is always better than cure, and therefore not getting into a bad situation in a recession is always a good idea.
2. Adjust your expectations, in terms of job scope, salary and wages. Try out for other jobs, maybe even lower paying ones.
Usually recessions lead to massive unemployment because people get laid off. The thing is that if you happen to lose your job, that is not the end of the world, because you can find a new job - if you are willing to take the hit on the income and willing to work longer hours for lower wages. The question is how to survive a recession, remember? Hard work, lowered and adjusted expectations, and the willingness to adapt to the changing economic conditions - all are the necessary things to do.
3. The most important thing of all that you must do in a recession - tighten your belt!
The most important thing to do during a recession is to make the necessary reductions in expenditure, which basically means that you have to spend less. Spend less, spend less! You can spend more when the economy recovers and when you have a high paying job. The reality is that sometimes people are forced to do things out of necessity, and surely a recession is one of the biggest factors forcing people to spend less money, which they should during a recession.
Some financial advisors have even suggested cutting up credit cards and downsizing or even moving to smaller homes and selling home objects, although that might be very extremist. Just reduce expenditure, and there should be no need to go to such extreme lengths. If you need the money, however, then there might be no choice and you would have to bite the proverbial (financial) bullet.
The basic key and basic strategy for surviving a recession is therefore to reduce costs and try to increase income, if one has been laid off and has lost a high paying job. Maxim to live by during a recession - attempt to reduce costs and maximise income!
In the final analysis, more research is needed. My website helps people by giving financial education, investment schools of thought and their analysis, and investment knowledge, as well as ideas on various ways of making lots of money and becoming rich. I have come to the conclusion of the series on how to survive a recession, because ultimately this is not the focus of my site, and my site is basically about how to make money and how to become rich, and is mainly about ideas and education in investment, financial education and other such stuff. Recessions are not my cup of tea, because as I've mentioned prevention is better than cure.
Thanks for reading, take care, and all the best. More to come on my website on finance and making money so as to become rich! Thanks.
Ideas on how to become rich!
Special series - how to survive a recession, part 4
Special series - how to survive a recession, part 3
Special series - how to survive a recession, part 3
Welcome back to my series on how to survive a recession here on my Ideas on how to become rich site. In the first post here on my site I wrote about the orgins of the 2008 financial crisis, which can be seen to have had long rooted causes and goes back many years. In the second post here on my site I wrote about the various past depressions (a depression is a longer and more series recession) and also on several key terms and key terminology for the current economic and financial crisis.
You can conveniently and quickly view the articles that I wrote earlier quickly using these convenient links here:
Special series - how to survive a recession, part 1
Special series - how to survive a recession, part 2
In this post, I will be writing about the various assets that you can put your money in - that is to say, while the world/ your local economy/ your regional economy is in recession, what should you do with your money? Basically I am asking the question "how do I survive a recession" and answering it with another further and related question: "where do I put my money during a recession and how do I survive it without losing any more of my funds?"
From the Straits Times, here are the 10 safest to most dangerous investments you can make - financial instruments that you may want to consider to take you through a recession. Note that I do not deal with psychology and with how to cope with losing money and psychological aspects of recessions and depressions, with emotions and all that. My goal is far more limited and has to do with looking at financial outcomes, financial reasons, financial causes of recessions and what I can do with money, what I can do with other people's money, what I can do while the world is reeling from the 2008 crisis and other questions of this nature. That is the fundamental reason why this article on how to survive a recession basically deals with giving 10 financial instruments/ means and investments for you to make a choice. Where should you put your money? That is the question. In future posts here on this site, the special series will also deal with (theoretically) things you can do to cope and survive a recession if you have been hard hit.
Safest to riskiest investments/ financial devices etc
1. Money
2. Bank deposits
3. Money market funds
4. Bonds
5. Unit trusts
6. Equities/ Shares
7. Complex structured products
8. Futures
9. Forex
10. Hedge funds
(Straits Times, 28th Sep 2008)
Safest to riskiest investments/ financial devices/ holdings
1. Money
This is the most liquid form to hold, and in a recession might be one of the best ideas since stock markets go down in a recession. This form is liquid and can be easily converted from asset to asset, and can tide you over rainy days. However, do bear in mind that money diminshes in value due to inflation and also there is no way that you can make money from money without interest or investment. Thus, money is liquid and useful in a recession but loses its value to inflation and does not earn you a return.
2. Bank deposits
This gives you peace of mind as well as some minute, low interest rate, so bank deposits basically are good for you in a recession. In Singapore as well as in many countries in the world, your bank deposits should be guaranteed, at least up to a certain sum of money. However, if there is a run on the banks in a recession, then you stand to lose your money - or part of your money if the money is not entirely guaranteed. Also, it is possible that inflation may be higher than the little bank deposit interest rate. So while in a recession bank deposits and cash are very safe and very liquid, they also do have their cons, but in a recession you might be safer holding these two very safe forms of money.
3. Money market funds
These rank a bit riskier than money and deposits in a recession, and while these are basically stable and low risk investments, there may be a risk of default when borrowers do not pay back the loans owed and hence the money market funds which lent those borrowers money might lose some money. A money market fund is basically an investment into short term instruments and debt securities, and sometimes government bonds. You can place your money in money market funds for some time and these should be overall quite safe in a recession.
4. Bonds
These are rather safe investments - bonds are basically fixed income instruments where governments and companies raise funds by borrowing money. These are basically debts.
The returns may not keep place with inflation in a recession, and also there is the risk of default, so do stand warned. This is more risky than money market funds which are diversified.
5. Unit trusts
Your investments will be managed by professionals, you can get high returns sometimes, there is diversification; however, in a recession, these are many risks and sometimes you may not get your capital back. Unit trusts (or mutual funds) are only good for new investors or people who have little knowledge of the stock market. In good times, a lot of money can be made, but in a recession lots of money can be lost and your capital and principal may not make it back.
6. Equities/ Shares
If you are Warren Buffett, or for that matter any savvy investor and wise man, this might be a very good option for you, in a recession or not. However, in a recession this may not necessarily be a very good idea unless you have an appetite for risk and you really know what you are doing.
7. Complex structured products
High risk products which give you potentially high returns, but they have complex underlying mechanisms which may not be fully understood by investors - therefore a very risky investment to place a lot of money in a recession.
8. Futures
There are low transaction costs, low outlay with the potential to make a lot of money and become rich, but just as there is potential in making a lot of money, there is a possibility of losing a lot of money as well. Derivatives are usually only for professionals or very savvy and intelligent investors, and even then, in a recession these are very unsafe.
9. Forex
You can generate and make a lot of money in good times and in also still make money in bad times with forex trading and there are many pros and cons discussed here: visit these links here to see what I have written on forex here (a summary page to access links to forex articles here on my finance and investment site).
However there is a need for intensive research, this may be rather dangerous, constant monitoring is needed, and forex is usually only for pros and savvy investors with an appetite for risk.
10. Hedge funds
You can make a lot of money here, but you can also lose a lot of money. You depend on the fund manager here and then again, in a recession this might not be a very good idea. This according to the Singapore news is the worst and most risky investment in a recession, and I must say that I agree. Only investors with a lot of money to risk should do this in a recession, and there must be a ability to wait for the economy to recover. This is the most risky investment when compared to the rest above.
That was a lot of analysis and it deserves a close attention and serious reading. Hope that gave you a better idea of what to expect in terms of investment and money during a recession. More to come on my site on this special series on how to survive a recession!
Thanks for reading, cheers.
Ideas on how to become rich!
Special series - how to survive a recession, part 2
Special series - how to survive a recession, part 2
Financial education here on Ideas on how to become rich!
This is my second instalment in my series on how to survive a recession, or more accurately, what can we learn from a recession and what can we do during one so that we can make money or prevent the loss of money. I do the research and present it on my site so that you can learn and benefit from financial education and so that your investments will be well informed such that you make money whenever you can and avoid losing money if possible. Here are some information and word definitions related to recessions - but in particular, these are about the great stock market crashes of the last 100 years and the words associated with the latest stock market crash in 2008.
(All investment/ stock market/ news information from the Straits Times in Singapore)
First and foremost, a recession is a period of falling economic growth, and a depression is a period of prolonged and powerful recession.
These were the great stock market crashes of the last 100 years:
1929 Great depression - which lasted until the Second World War
1973 The oil shock - which had to do with OPEC, the Yom Kippur War and much more which I will discuss in future posts in future here on my site
1987 Black Monday - a fall in the stock market when confidence plummeted
1997 the Asian Financial Crisis - the crisis caused by currency speculation, and spooked investors, and this was the particular stock market crisis I said earlier that caused American investors to criticise Asian markets - and Asians were even criticised about their political systems (but the problem is that there should be blaming here or there, because all economic systems have their own inherent pros and cons, their own inherent good parts and bad parts, financially speaking)
2001: 9/11 and the Dot Com bubble bursting - we all know this one because it was both a political crisis and also an economic crisis
2008 The current Credit Crisis which will surely go down in history - so in a sense here we are, and here I am, writing about future economic history.
The central question of "how to survive a recession" is rather simple to answer, if one takes a sufficiently long term view - all the recessions mentioned above and all the stock market crises ultimately recovered, because the business cycle operates in such a way that there will ultimately be recovery.
This second part relates to terms and words that you need to know if you wish to understand the global crisis further.
securitisation - banks securitise loans by making them into "investments" which are then sold to third parties, rather than the usual practice of banks holding mortgages
mortgage backed securities - the basis of the 2008 financial crisis, these repackaged home loans are the IOUs that third party investors bought (see earlier term for a better financial understanding)
credit default swaps - these are basically insurance policies that companies and investors bought to protect themselves from the default of the securities - the buyers of these swaps make regular payments to a swap seller, usually an insurer, in exchange for a payout when there is a default (the economic problem with AIG becomes very clear when you realise that it was such companies like AIG selling credit default swaps from banks and other investment banks so that the risks would be lower for those investment banks - but all the risks went to AIG instead)
collateralised debt obligations (CDOs/ or toxic debt) - these are like mortgaged backed securities, but instead of mortgages, these are made up of differnt types of assets, including commercial property and bons (CDOs and mortgage backed securities are some of the instruments that people call toxic debt, because of obvious reasons)
leveraging/ gearing (in Singapore we say gearing instead of leveraging, but the two terms are synonymous) - basically this is using OPM (other people's money) - the degree to which a company or an investor is using borrowed money, and the problem with gearing is that, while it is very useful on the upswing and can make you a lot of money, the converse is also true that it is not useful on the downswing and can lose you a lot of money since it works the other way as well
deleveraging - what is happening now (in 2008), as banks and companies have to put up more collateral and reduce their debt levels by selling their assets and raising capital
libor/ silbor - the london interbank overnight rate and the singapore interbank overnight rate respectively (basically, the rates that banks charge when they lend money to one another, be it in London or Singapore) - the process works the same way in the USA, in a similar manner
treasuries - treasury bonds, notes and bills - these are government bonds issued by the USA Treasury Department. These are seen as the ultimate safe haven investments because they are denominated in US dollars, backed by the US government and are very stable
derivatives - these are a class of investments that derive (hence derivatives) their value from another underlying asset, such as company stocks, allowing investors to profit from movements in the stock price without owning the stock - basically investors can take bets on anything from interest rates to stock prices
short selling - when an investor sells a financial instrument that he doesn't own, in the hope that he can buy it back later at a lower price and earning a profit - short sellers usually borrow stock to make good their promises - currently short selling has been banned in many countries because they are exacerbating the financial crisis by making it worse
hedge funds - these are private, barely regulated investment funds that manage assets using high risk high return strategies, and they often leverage / gear to get bigger returns, and they usually even engage in short selling - doing anything to make money.
In summary, here I've shown you a list of the several stock market crashes and important dates that you need to know in your financial education, and also you now know more words and ideas associated with the current stock market crashes worldwide and the recession worldwide, in 2008. One key idea is still that prevention is better than cure, and the thing about most of the financial instruments that have caused problems is that to prevent yourself from losing money, you should always be aware of the pitfalls of what you buy. Simply and beautifully put: "Rule No. 1: Don't lose money. Rule No. 2: Don't forget rule no. 1." Knowledge and more research is key and very important to surviving a recession and a stock market crash.
In my next post, I will share ideas on what to do with your cash and your money if you are afraid of the current economic crisis, by showing you options in which to place your money. The current recession caused by the financial crisis worldwide has not prevented Warren Buffett from investing in the stock market, because to him the prices of most companies has gone down and now he can acquire many good companies at cheap prices.
Ideas on how to become rich!
Special series - how to survive a recession, part 1
Special series on ideas on how to become rich - how to survive a recession, part 1
This is a special series only for this month on my Ideas on how to become rich website. The thing is that my site focuses on ideas on how to make money, case studies on rich people and their ideas, investment ideas and investment knowledge, education with respect to finance, business and entrepreneurship, and the like. Yet there has been no mention of a recession, so I've decided that it's high time that I wrote about recessions and how to survive them.
Actually there are many caveats that I have to state categorically first before delving into the topic on how to survive a recession. The first is that there are many ways of surviving a recession and that there is no one single way of surviving a recession. The second is that sometimes, it is hard to say whether one can or cannot survive a recession, because a recession sometimes makes it hard to know whether or not you will be the one affected when all along you've been fine in your job or in your career. The thing is that the title of the post "how to survive a recession" is actually wrong, because the idea is still that prevention is better than cure. Fourth, the post here on "how to survive a recession" is actually better labelled "what to do with your money during a recession, and in particular this particular recession that the world is facing". Having stated all those caveats, this post and the next post is a foray into the world situation standing as at October 2008, and the collapse of world financial markets and financial institutions in the USA.
The world is in recession at the moment due to the global financial crisis that started in the USA. In my opinion this still highlights the importance of a financial education and the usefulness of blogs like mine where people learn about investment, business, money, financial education and finances in general. How did the world financial crisis of 2008 come about? Here is a summary for those who need a look into the crisis.
In the USA, prior to 2008, there had always been a double deficit of the budget deficit and the current account deficit in the balance of payments. This is the long term factor. The more intermediate factor was the subprime crisis in the USA, which basically worked as follows: many people in the USA borrowed money to buy houses, and normally the mortgages would be held by US banks. However, the thing is that some of the loans were made at subprime (hence "sub and prime- subprime") rates to borrowers who really had no real long term ability to pay back. What the banks did was that they decided to finance all the risks by securitising, which is a fancy way of saying that they passed the risks all to other bank customers - the US banks made the loans that they made out to others into securities and other bank financial instruments, and sold them as "investments" to customers. This made the banks safer in the sense that they did not hold the risks - their customers did. Did I also mention, that property prices went down even though the customers expected prices to continue rising? In economics, after a boom usually comes a bust - after a bull market, there usually comes along a bear market, and that is precisely what happened. People borrowed money to buy houses that they could not afford and the prices of those houses went down, while other people made investments into houses that people could not afford. A recipe for disaster, but that was only the intermediate factor.
The immediate trigger for the crisis, at least in my own personal opinion, and I am an economist by academic training, was the collapse of the Lehman brothers which was not supported (rather, bailed out of their liquidity problems) by the US government. In a nutshell, the US government did not bail out this ailing giant, and that was when the whole problem started. AIG started having problems a while later, and then the whole of the western capitalist system that had criticised communism and criticised "Asian values" and Confucian values as leading to economic disaster also fell ill; in short, capitalism, American style, is also prone to problems and illnesses just the same as communist economic systems and Asian economic systems. Understanding that economic systems in the world all have their own problems and their own pros and cons is already a key step into financial education (i.e. there are many ways to skin a cat, if you get the drift).
The final point to note is that the crisis spread all around the world because suddenly there was a run on banks and a general fall in stock market confidence worldwide. People yanked their money out of stock markets and financial instruments and started putting their money under their pillows. As you should know, the rapid decrease in the supply of money (this is simple demand and supply analysis) soon led to liquidity problems because banks and other financial companies (and companies in general) could not rely on stock markets to raise funds, which in turn affected their investments and even day to day operations, while at the same time, stock prices came crashing down.
I am writing this article in October 2008, and this is one of the biggest world economic crises that I have seen in ages. Yet, this is not the first time that the world has faced such a problem. By now we should be able to overcome such problems because we have seen recession after recession and learnt key facts and key ideas about economics and how markets work. Yet people don't seem to have learnt much and there is still much room for learning and improvement. Do stick here with my site and learn more about recessions as I seek to explore the topic on "how to survive a recession", a key skill that we will need as recessions come and go often in the world economy, and learning about them may give us ideas on how to become rich despite the fact that others are finding money hard to earn.
I don't purport to know all the answers, but let's have a look into recessions, ideas and concepts on "how to survive a recession" in general, and perhaps we can glean some important insights into how to make money when others don't and how to avoid losing money. In addition, we can also attempt to learn about the various options that we have for investment and the various options we have for surviving a recession. Some ideas will be general, and some ideas will be specific, so learn what you must and glean the ideas if you need them. Cheers and thanks for reading!
Ideas on how to become rich!
Case study: Anthony Robbins, part 2
Case study: Anthony Robbins, part 2
This is my last post in my case study series for now. In future case studies, I may research and write about Bill Gates and other millionaires and billionaires, and I even intend to write an article on how to become a billionaire, based on my research here on my ideas site.
This article is about the psychological side to what Anthony Robbins talks about and how we can adapt his ideas and what he does to our use, which is making money and becoming rich.
The key difference between quotes by people like Warren Buffett and quotes by Anthony Robbins is that Anthony Robbins' quotes are mainly psychological and mainly rhetoric meant for motivation and self motivation purposes. Warren Buffett quotations, on the other hand, have some use in terms of what they teach in terms of logic, in terms of real ideas on how to make money, and in terms of real principles of finance and principles of how to make money on the stock market, as well as the occasional quip here and there. Therefore, the only real use for Anthony Robbins for our purposes for making money is to see what he does and to answer the question if what he does is replicable for us or not.
That is not to say that Anthony Robbins' psychological motivation and the good words that he has are not useful; they are - it's just that between such words and the quotes from a wise man who invests in the stock market, you would probably want to choose the man who knows how to make money.
I have already written some of the psychological and motivational quotes from Anthony Robbins in my earlier post, and here are some more famous quotes from Anthony Robbins that have inspired me psychologically. Bear in mind that these are good pieces of advice in their own right, but we shall not focus on them; we shall just read them then go on to analyse what he does in terms of how he makes his money and how we can learn to become rich.
Setting goals is the first step in turning the invisible into the visible.
Most people fail in life because they major in minor things.
Once you have mastered time, you will understand how true it is that most people overestimate what they can accomplish in a year -- and underestimate what they can achieve in a decade!
Most people have no idea of the giant capacity we can immediately command when we focus all of our resources on mastering a single area of our lives.
It's in your moments of decision that your destiny is shaped.
Quality questions create a quality life. Successful people ask better questions, and as a result, they get better answers.
Whatever happens, take responsibility.
Your life changes the moment you make a new, congruent, and committed decision.
Beliefs have the power to create and the power to destroy. Human beings have the awesome ability to take any experience of their lives and create a meaning that disempowers them or one that can literally save their lives.
Having dealt with the psychological part, the next question is what tangible lessons can we learn from Anthony Robbins? This site is all about ideas on how to become rich and ideas on making money, after all. How can he teach us to make money and become rich?
1. Motivational seminars are low cost events that can have the potential to make a lot of money. Yet it seems that you need to be already recognised or have the potential to be recognised, before this is a good option for you to make your money from this kind of thing. You will also need skills and abilities to convince people to come to your seminars and to listen to what you have to say, and above all, feel that their money has been well spent on your advice and motivational ideas.
2. Writing books on motivation may turn out to be a more important and better way of making money, because this one does not require you to be recognised first, if you are a good writer and you can find a good and reputable publisher. Yet it also seems to me that if you want to become rich doing this, you may need to write many books and ultimately you face the same dilemma that you need to be famous in order to make more money. That is, you can make some money from writing motivational books. But the real money in it is not from writing motivational books and being unrecognised, but rather in writing motivational books then becoming very recognised and then from there branching out into motivational talks and other such stuff. Then, and only then, will future books earn you a lot of income. Therefore, the fame factor still comes into play when writing books to make money.
3. NLP. This is actually a very controversial field, and I even have written entire articles about it elsewhere. It plays almost no role in our study because we are now ignoring the psychological part of making money and looking into how we can actually, tangibly, make money and become rich using Anthony Robbins' ideas.
4. Acting. Above all, Anthony Robbins is a performer and an actor. He can make money doing this but this might not be a good idea for most of us and the majority of us will never be famous actors or performers. Yet this does not rule out the fact that one or two of you readers may become famous actors or performers or even famous TV personalities. Anthony Robbins is basically teaching us to leverage on our strengths to make money.
In conclusion, here are the aspects of money making that really matter - the ideas on how to become rich that we have extracted from Anthony Robbins' ideas:
1. Motivational seminars are low cost events that have the potential to make a money. Yet you need to be already recognised or have the potential to be recognised.
2. Writing books on motivation may turn out to be a more important and better way of making money, because this one does not require you to be recognised first, if you are a good writer and you can find a good and reputable publisher. Yet it also seems to me that if you want to become rich doing this, you may need to write many books and ultimately you face the same dilemma that you need to be famous in order to make more money. Therefore, the fame factor still comes into play when writing books to make money.
3. NLP. This is actually a very controversial field, and I even have written entire articles about it elsewhere.
4. Acting. Above all, Anthony Robbins is a performer and an actor. Anthony Robbins is basically teaching us to leverage on our strengths to make money.
Thanks for reading and there will be more finance articles coming in future posts here on my site on Ideas on how to become rich. Recently in Sep and Oct 2008, with economic conditions worldwide becoming bad, with subprime in the USA and a crisis of confidence in banking worldwide, there is an even more pressing need to be financially educated and wise with money and investments, so I will try my best to educate, share ideas, teach and suggest. Stay tuned for more here on my great site! Thank you.
Ideas on how to become rich!
Case Study: Anthony Robbins, part 1
Case study: Robert Kiyosaki, part 3
Case study: Robert Kiyosaki, part 3
This is the third and last instalment on my research into Robert Kiyosaki's ideas and sayings on how to become rich. I will be using Kiyosaki as a case study to learn ideas on how to become rich by considering what he actually does to make money. In the previous two posts, I analysed what he teaches and preaches to people on how to make money, as well as the controversies surrounding his thinking and writings. In this post I will analyse what he actually does to make money and ask the central question whether we can take him as a case study to make money.
Firstly, just to recap, these are the materials that I have researched and talked about in the previous two posts on Robert Kiyosaki:
These are the key central money and financial ideas from Rich Dad Poor Dad as well as other books written by Robert Kiyosaki:
1. financial independence comes about from investing, real estate, owning businesses, and the use of finance protection methods and mechanisms
2. do not be an employee, but be someone who controls the means of production
3. formal education is not the correct education in the knowledge based economy
4. we can earn money using passive income and active income, not just active income alone
5. The Cashflow Quadrant idea according to Robert Kiyosaki - ESBI:
Employees work for others
Selfemployed owners are their own boss earning money
Big business owner with a system of making money
Investor who spends money to earn money
6. Financial literacy is important.
In addition, I also covered why these cannot be believed as ideas on how to become rich, as there are several controversies surrounding Robert Kiyosaki's methods on how to make money and his ideas about finance, money, education, and the like.
These controversies and counter reasons, in my own personal opinion, were:
1. that there are no details and no particulars, only generalities.
2. there is no way of differentiating between fact and fiction in Robert Kiyosaki's writing, and so that might pose a problem.
3. Kiyosaki is very repetitive, and although in my first post on Robert Kiyosaki I wrote on his book Rich Dad, it turns out that many consider his other books very similar to that one - and Robert Kiyosaki has only a very few and limited ideas on how to make money
4. Robert Kiyosaki makes his money writing books, giving seminars, selling board games, and is known to do MLM. These may make him a lot of money, but are these skills replicable and do they help his readers in their quest to learn how to make money and how to be financially literate? Perhaps not.
5. There is no one who can sum up what Robert Kiyosaki says and teaches properly, accurately and in a succinct manner because what he writes is so vague, that everyone reading it has a different perspective and a different opinion on what was written. This is unlike Warren Buffett, because what Buffett has written and talked about has come from Benjamin Graham's analyses and there have been many documented sources.
Now the question is, can we use this statement in my research to learn ideas on how to become rich? "Robert Kiyosaki makes his money writing books, giving seminars, selling board games, and is known to do MLM." It seems only fair that we work from this premise, since this is what he actually does to make his money. Here is the analysis:
Writing Books to become rich
This is a good way of making money, if you can write, if people like to read your writing, if you have good ideas, if you can express yourself fluently, if you can cook something up that people want... there are many factors involved. It is only a good way of making money if you are able to have all the factors come together in your favour. Robert Kiyosaki should not be the role model in this sense, because you would be better of emulating JR Rowling or other famous authors or novelists.
However, if you do ultimately intend to write financial books and make money this way, the catch is that you would have to be famous for making money first before you can write books on how to make money. That is to say, with the probably rare exception of Rich Dad, Poor Dad, other financial books' authors were rich and famous before they wrote those books. Trump, Buffett, Lynch and other such authors for example.
What Kiyosaki has done is rather rare, so I would say that it is harder to make money this way. By comparison, other authors who are creative make a lot of money by writing fantasy, stories, and in the case of Dan Brown, even nonsensical stuff that criticises established society also makes him famous, and even movies can come out of his stories. Therefore, if you intend to use Kiyosaki's idea of writing books to make money - try to write novels, as that is more lucrative; unless of course, you can pull off what he has done - to make money out of writing financial advice.
Giving Seminars - in particular, motivational seminars
One might be inclined to say that this is not a good way of making money, but according to my research, this is one of the best ways of becoming rich if you are so inclined. In fact, Anthony Robbins is going to be the subject of my next case study on how to become rich by looking at some rich people.
Motivational seminars did rather well for Kiyosaki, and also did rather well for Tony Robbins, so that is worth one entire post for Robbins and how he made his money speaking motivational stuff to millions worldwide, and how we can learn from what he has done.
Selling board games (in particular board games that make money)
This is a good one. Kiyosaki has also cunningly written his books in such a way that there is the sales aspect of his board games inside. What I mean is that, while he writes about financial literacy and other motivational aspects, he also puts advertisements of his games into his writing, and some of his books are designed around the sale of his board games. That is, some of his writing is no more than mere sales pitches for the real product - his own games.
We can learn the idea of developing board games or for that matter, modern times you see, online games or online board games because that might be a very good idea on how to make money. Selling these games and promoting their use would be very good, and such games, if popular could make you a winner. This goes beyond Kiyosaki now - Monopoly, Hotel, and other such games come to mind, because these help people learn about finance while playing games, and you can make money selling the complements to the games as well as the substitutes. Couple this with some business seminars and the idea is complete. I adopted all these key ideas from reading about Kiyosaki's life and methods on how to make money - running a business seminar, while using and selling your board games, seems to be a very good winner. Might be worth a try!
MLM - not going to be discussed here, but in future posts, analyses and research will be devoted to this topic specially
MLM (or the famous or even infamous Multi Level Marketing) is one big, complex thing that will be dealt with in another series, not right now.
That's the end of the Kiyosaki case study, and hope you learnt some stuff out of it! In the next post, the final case study in my case study series, before I resume other financial articles. I will be dealing with Anthony Robbins and his methods on how to make money - motivational seminars. Do stay tuned, thank you very much and cheers!
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Ideas on how to get rich!
