Creating Wealth Book Review

Robert Allen is one of the key experts of American property investing.

His investment techniques spark allot of controversy, just look at John T Reeds site, but I consider him a genius, his writing style is simple and understandable.

Like many books these days Allen starts with the "Wealthy Mind-Set" (P11). He suggests you become programmed with the conversations around you. To loosen its grip start noticing the conversations around you. I can certainly relate, after coming back from a property investment meeting I talked to a relative about the guy teaching us having 80 properties. Her reaction was "Wow, think of all the land tax he pays!". Certainly not the reaction I expected. Another is "Replace luck thinking with probability thinking" (P 15).

Robert breaks down "The seven wealth principles" (P 22) . These involve taking notice of tax, appreciation, focusing your efforts, making offensive actions, investment stability, leverage & control. Well explained, this guy is the real deal.

The power of the book now appears, a 10 year plan. With an order at every stage. Pre-launch: time to learn like you have never learned before. Liftoff: buy a property a year at 10% off its real value. These are the years of sacrifice, keeping the focus. Pre-orbit: (year 5) Time for insurance incase of mishap. Year 10, Jettison some debt, diversify, and enjoy!

Allen provides a number of methods for buying property to work the plan. the one I like is the buy low and don't sell. My own plans is to buy low add value though renovation sell two to three near the end of the cycle. I find myself in the enviable position of waiting for a big property wave that my research suggests Sydney (Australia), is about to experience. I'm planning to stack my properties and ride the wave.

Now Robert tantalizes us with some creative financing. This is discussed more in his amazing book Nothing Down for the 2000s. Much of this is written for the American property market, though I know of people that have converted some of this successfully in the Australian market.

Tax, diversification with other forms of investment, and property management is devoted to all but the last chapters. Oh hum, yet essential.

Lastly Allen talks of the need for the "right kind of education" (P 234). Which is learning from people that have already done it. With the ending of the book, he stresses that "Wealth is Thoughts, not things" (P239). If wiped out, Armed with the right knowledge Robert feels it would take him no time to make his way up the ladder.

This book is a must have. 9/10. Have it on your shelf within arms reach of when you need it.

What did I get out of this?

• Allot of sensible reasons of why property is a good investment or wealth building vehicle. When the doubts come, and they will if your like me, this is the stuff that will put you back on track.
• A 10 year plan! with multiple entry and exit strategies. No one can work without a plan!
• Several methods of buying property.
• Creative financing methods.
• The realization that this applied knowledge used diligently separates the successful property investor from the unsuccessful.

Ian's Spin

There are certain books that are essential reading for property investing. I think this is one of them. Clever, informative, packed with a well thought out plan with multiple entry and exit strategies. The only thing you could complain about is that it is so packed it might overwhelm you with options.

The book is a must, as is his other best seller Nothing down for the 2000s.

The Cashflow Quadrant Book Review

This sequel to Rich Dad Poor Dad, provides another step in the development of a business/property investing mind set.

"Which quadrant are you in?" (P1). Kiyosaki creates four conceptual quadrants to reflect a persons working life. Employee, Self Employed, Business Owner & Investor. According to Robert, he created this book for the person that was trying to move to another quadrant.

The author argues that people tend to move toward a particular quadrant depending on there core values. A doctor could be an employee at a hospital, set up a private practice, own a medical clinic with many doctors, or even invest monies in stocks or bonds. "Its not so much what we do, but more how we generate income" (P10).

Our educational system according to Kiyosaki trains up to think like employees. Which I would agree with. My own fear bounded up with possible failure keeps me firmly in my job.

Employees value security over financial risk. Self Employed tend to be perfectionist. Business owners design more business systems of people. Finally Investors make money by using other peoples money or there own.

Each quadrant has its own terminology and core beliefs. If you wish to jump to another quadrant then it requires you to move mentally.

Kiyosaki divides these four quadrants into two basic areas. The work/time dependant jobs and the financial rewarding and time free side. Kiyosaki obviously favors the business quadrant. Seeing both Multi-level marketing and franchises as good introductions. He proposes new mind sets into the mix, the most powerful being "you cannot have success without failure. So unsuccessful people are the people that never fail" or "success is a poor teacher" (P71), others include seeing the potential of a new business system combined with an idea, business structures that support investment or business have many more tax benefits, or using other peoples money.

I am changing my own mindset from a normal employee to a realestate investor. I have tried a number of times to break the barrier from my job to business without success. My failures weren't the problem, the problem was I couldn't continue to fail in order to learn and succeed. So I am the first to agree that the mind set and due diligence is everything. With that in mind I give this book an 8/10.

Like the first book, this is also light on a detailed plan. My own situation as an employee diving into realestate investing. Now Robert would put me as an employee/investor. Yet with the properties I will be renovating with hired help and my own hands. So I don't see the property buying I am doing as purely investing. I don't know if it fits in the quadrant? None the less the quadrants is a great theory that comes closer to realizing who you and are what you strive to be if you want to change your working life.

What did I get out of this?

• Employees have a mindset of security and risk free finances, which is against my property investment philosophy of needing lots of borrowed money or "Good Debt".
• Investors think in "Return On Investment", "Acceptable Risk", "Due-diligence", and researching rather than buying emotionally.
• Failure is needed for learning success, as bitter as that statement is, there is no substitute. So get thicker skin.
• Go over the numbers to any investment you are considering. If the numbers aren't there it doesn't matter how pretty the property is.
• Know the difference between facts and opinions, as an investor you have to think differently about property than a normal owner occupier.

Ian's Spin

If you expect to change quadrants these type of books are essential to break the hold of past conditioning. Don't just read the book, absorb the message. Although this isn't a property book, without the mindset change you will not be ready for the road ahead.

Might I also suggest trying games like Cashflow, also from Robert Kiyosaki. They provide education to both your conscious and sub-conscious. If your on a journey like me you need all the help you can get.

Get this book!

Rich Dad Poor Dad Book Review

Well, this my friend is a life changing book. If like me, property investing is what you want, you have to develop the mind set, the motivation and the lingo.

The first time I read it was over 5 years ago, at the time it didn't seem that great. However with the addition of years, and my own cancer episode, it seems to have sparked a much greater appreciation, or perhaps understanding.

It tells of Kiyosaki's own poor father and his friends multi-millionaire dad. Both the men had powerful impacts on Robert's life, and this is really brought out by the thought differences between the two fathers. While I certainly don't know if 'Rich Dad' existed or for instance was a combination of people and Kiyosaki's own thoughts, it certainly makes compelling reading.

So whats so good? it's really a case of perspective. While Robert's own father was always in the unenviable position of letting the lack of money dictate his future, his rich dad actively sought to build an empire, a system, a way out of the rat race.

Rich Dad takes on the task of empowering the boys to bring out there creative ideas. Rather than talk he preferred to train via experience. One of the more notable quotes was "The poor and middle class work for money. The rich have money work for them." (P30). This is done via building your own system to run a business, or assets, so that money comes in whether your there or not.

Financial understanding is the first step into this world. Knowing the difference between an asset and a liability. Kiyosaki has a new take on the meaning of asset, he puts forward that an asset has to generate income. Your home would traditionally be considered an asset, Robert disagrees. He makes many diagrams in his attempts to explain finances, particularly income and expenses or assets and liabilities.

"Work to learn - don't work for money" (P117). Another one of the quotes of this book. This could well be good advice, but being an old dog of 41, I really think I wont be pulling the pug of my job until I can equal my wage.

"Master a formula and then learn a new one" (P154). This theme is only taken over a page or so, though I like its sound. Personally I like the idea of mastering a formula and then tweaking it different ways to see if you can get it working better, though I am no millionaire... yet. The main mentor Dave Dorian in my realestate group very much believes in this. He preaches this religiously, though the trick is to find qualified mentors to teach you these, be them in book or other form.

"The rich invent money" (P97) I prefer a more specific quote like "the rich invest money", Now this is my cup of tea. At the time of writing I am waiting for the Sydney (Australia - Yes the land of skippy) realestate market to pick up. I'm planning to stack a host of properties bought at least 10% under value and wait for the wave to come in, much like a surfboarder waiting for the big one. Then I will drop the shakes of my current job and annoy my friends with more jewelery than Mr T. Unfortunately this wont happen over night, but it will happen.

The criticism I have of the book is the lack of a plan. My favorite books have this as a key feature. I'm sure Robert would argue that he is really trying to develop a mind set.

What did I get out of this? The most simple of things.

• If you expect to rise above the rat race, then you have to act.
• Sacrifice now and reap the rewards later.
• Change that damn mind set. Thinking small will keep you right there.
• Time to build assets. Or as I like to think magically make money.
• Rather than be destroyed by your mistakes, learn and keep going! Life is all about making mistakes, the only question is how bad do you want to succeed?
• Change that mindset! absorb this book.

My first Rating! 7/10. Particularly good if you haven't been exposed to this sort of thing before. Not bad Kysosaki, keep up the good work.

Ian's Spin

I have (before my cancer episode) tried a number of ways to break free of the rat race, though now that I think about it, it has never been with an absolute plan, nore with a compelling belief that I can do it. I suppose what I'm trying to say is I have failed, failed and failed. Now the impetus has been embedded on my spirit. Books like this one produce the oil to keep me burning for success.

As a side note I often play Robert Kiyosaki's cashflow game. Its really a teaching aid game, similar to monopoly to educate you on the rich mentality. If you decide to play it, do it a number of times, as the idea is to push both your intellectual and your emotional understanding.

Make sure you have a look at the review of the rich dad sequel The Cashflow Quadrant.

If you don't have the book, just click the image below to be transported directly to the Rich Dad site. If your serious about changing your mind set this book is for you.