Another successful addition to the range of financial books written by Robert T. Kiyosaki together with Sharon L. Lechter, Who Took My Money is a worthy read. It is divided into 2 main parts.
The 1st aims to address the importance of having a synergy of advisors as well as taking into account their different points of view.
The 2nd is about the synergy of various assets and financial forces.
Take a look at the content page below. Study it carefully, which part does it answer the question of Who Took My Money?
What should I invest in?
1. Ask a Salesperson
2. Ask a Cattle Rancher and Then Ask a Dairy Farmer
3. Ask Your Banker
4. Ask Your Insurance Agent
5. Ask The Tax Man
6. Ask a Journalist
7. Ask a Gambler
8. Ask Newton
9. Ask Father Time
Ask an Investor!
10. 4 Reasons Why Some People Can’t Become Power Investors
11. The Power of Power Investing
12. Gambling Rather Than Investing
13. How to Find Great Investments
14. How to Be a Great Investor
15. Winner or Loser?
It is obvious that the book deals more with investments rather than money loss. In my opinion, Who Took My Money is just a provocative title aimed at boosting book sales. It is human psychology, books with cheeky titles fare better than books with boring titles. If this book were to be titled ‘Investments’, it would be competing with the numerous other books already titled this way. Misleading…because Kiyosaki does not spend many pages explaining where our money is disappearing to (taxes are your single largest expense). Criticisms aside, this book is developed in an unorthodox ‘interview style’, making it both intriguing and engaging at the same time.
Rather than doing a whole summary of the book resulting in a diluted book review, I want to share something I learnt from the chapter ‘The Power of Power Investing’, which I feel is the most important chapter of the book.
Why the Rich Get Richer!
Conventional attitudes and wisdom lead us to be working in the E and S quadrant. Usually individuals in this group will only have 1 source of income which is their paycheck and they cannot survive prolonged periods without it. Referring to the chart, they save, reduce debt, pay off mortgage, buy paper assets first and invest in a long term retirement plan.
Turn your attention over the right side of the chart.
Instead of operating from the E-S quad, the rich operate in the B-I quad. Instead of using their own money & time to invest, the rich also use other people’s money and other people’s time and money! Instead of investing in paper assets first, the rich invest in Business, Real Estate followed by paper assets last.
Professional Investors use various forms of leverage for their own gain. They use banks to leverage their money and keep it moving. An example would be putting 10% down payment of a piece of property and borrowing the remaining 90%. Whatever profits gained would not be shared with the banker, even though the banker has 90% of the risk. Bankers would collect interest, which is paid by the tenants.
While people on the left side of the chart work alone, people working on the right side of the chart have a whole team of advisors working together, ensuring their money is properly managed, leveraged and protected. Essentially, people on the left side PARK their money while those on the right side ACCELERATE their money, ensuring rapid growth.
‘This is the basic plan that the richest investors in the world follow.’
~Big Words from Robert T. Kiyosaki