Category Archives: Business and Finance

Rich Dad Poor Dad

I once borrowed the book Rich Dad, Poor Dad by Robert Kiyosaki from Wilson sometime back in 2001.

Though I found the book interesting, it left me with quite a number of questions, especially regarding the integrity of the facts stated.

For example, “if ‘Rich Dad’ is so rich, just who is he, and why haven’t we heard more about him from other sources?” (yes, I know, not all rich people live their lives in the spotlight, but after this book came out, surely he had no choice? Wasn’t anyone else curious? Why weren’t there any interviews with him about the book?)

Another thing that bothered me immensely was Kiyosaki calling his biological dad “Poor Dad”. Asians not estranged from their fathers typically do not call their fathers “poor”. I know I‘d lose some sleep if my son wrote a best-selling book that called me “poor”, and started calling the neighbour’s dad “dad”.

But of course, he’s a best-selling author, and I’m not, so who am I to argue? Millions of people couldn’t be wrong, could they?

I thought this way until I came across this page called John T. Reed’s analysis of Robert T. Kiyosaki’s book Rich Dad, Poor Dad.

From the page:

As to the whereabouts of Rich Dad—at one point, Kiyosaki tells Smart Money that he died in 1992. Poor man.

Later, he says Rich Dad is still alive, but a reclusive invalid. Uh huh.

Later, he tells Smart Money that Rich Dad was a composite of several persons.

Finally, he gets angry at Smart Money. “Is Harry Potter real? Why don’t you let Rich Dad be a myth, like Harry Potter?”

I never heard of John Tweed before this. I had thought him to be one crazed reader taking his jealousy to the extreme. It was only after I read the page where he addresses the jealously issue (people wrote to him calling him jealous of Kiyosaki), that I felt he had some credibility.

On that page he also gives some (rather detailed) background information on himself as well. (Of course, even with what he says, I’m pretty sure there’s a tinge of jealousy in him; he is human, after all, and a non best-selling one at that.)

John Tweed’s analysis is really, really long, and starts off feeling like a pointless rant; but it gets better towards the end, where he starts explaining his reasons behind his scathing remarks. I especially liked the part where he wrote about how people “got hurt” by Rich Dad Poor Dad.

This man is doing damage. I got an email from a surgeon. Her 17-year-old son read Rich Dad Poor Dad and now does not want to study or go to college. He just wants to get rich and believes Kiyosaki’s pitch that education is a waste of time. He now puts down and criticizes his mom for not being richer. I never knew a surgeon who was fighting the pigeons for something to eat. And this particular surgeon says she finds her profession extremely rewarding in non-monetary ways as well.

All in all, I wouldn’t say that I wouldn’t totally not recommend the Rich Dad Poor Dad book — it did get me interested in personal finance, if anything due to the positive, upbeat way he wrote it — but keeping in mind that the book may contain many elements of untruths sold as truths, you’d better have more than your normal share of salt on this one.

Rules I Live By

Here are some rules I live by. I had never actually consciously used them, until the last few years, where I’ve learned through greater self-awareness what drives the motivations behind me. I do think that most of these are “positive”, but like Rule #1 on my list, “there is nothing either good or bad but thinking makes it so.”

  1. There is nothing either good or bad, but thinking makes it so.
  2. Let he who has not sinned cast the first stone.
  3. A bird in the hand may be worth two in the bush. But if you believe you’ve got a good chance at getting those two, go for it.
  4. Knowing how to talk can be used with great leverage during interviews and the like. Therefore, learn how to talk.
  5. Do not treat others as you’d like them to treat you: they may not like the same things you do. Instead, treat them as you’d like to be treated if you were them, and they, you.
  6. If you don’t have time, make it. I once booked in to camp at 11:30 pm. I had booked out earlier that day, during the afternoon, and had actually planned to go for a run in the evening, before booking in. But I spent a little too much time in front of the computer, and didn’t go. By the time I finally decided to go running, it was too late. A case of not enough time? I booked in, sat on the bed, all bothered by my missing this run. Deciding that we have enough time for anything, I decided to sacrifice some sleep for that run, and went to the track to complete that run. I decided to make time for running by taking time from sleeping; this leads me on to the next rule:
  7. Think of things not in mere “cost”, but also in “opportunity cost“. Opportunity cost is the cost of not getting the next best alternative, the benefit foregone from not using a good or resource in its best alternative use. I could buy that $500 PDA , or I could put it in an investment vehicle earning (historically) 5% per year. The opportunity cost would therefore be the income I would get should I have invested it. But if I invested it, the opportunity cost would be my not having the organisation capabilities of the PDA, which could result in greater returns if I were a busy executive in need of the organisation a PDA would provide.

These are just some of the major rules I live by everyday. I hope you find something useful in this list. Perhaps you’ve got your own, and I’d love to hear from you if you do.

Negotiation and Human Behaviour

The passages quoted below can be found in the book Fundamentals of Negotiation by Gerard Nierenberg. I’m sharing these with you because of the insight it has provided me regarding the techniques in dealing with people. I especially enjoyed the second passage, where Nierenberg asks the reader the question, “are you more interested in their behaviour, or the motivations behind the behaviour?”

As a person greatly interested in psychology I’ve always chosen the latter, that of “the motivations behind the behaviour.” But Nierenberg argues that these motivations are not as important as the behaviour. There are many motivations for people to do anything, and many of these are rational, but rationality is people-specific, he says. It is far better to work with the numbers of probability, trying to predict what his next behaviour will be, and work from there.

[i] People’s behaviour are guided by their own rationalisations. Whatever they do, in some way or another they are doing it as they believe it will help in some way, even though it might seem to the contrary. A man who flies into a rage might be trying to prove a point, in his own rational way, that he is to be taken seriously this time.

[ii] When talking/negotiating with people, are you more interested in their behaviour, or the motivations behind the behaviour? Man’s motivations are many, and often may well be rational, but this rationality is people-specific. Behaviours on the other hand, are like probability. You cannot predict what an individual man may do, but you can predict with mathematical certainty what a group of individuals will do.

Relation of Height to Salary

Taken from the book, Blink, by Malcolm Gladwell:

“Overwhelmingly, the heads of big companies are… also almost all tall: in my sample, I found that on average, male CEOs [of the companies on the Fortune 500 list] were just a shade under six feet tall. Given that the average American male if five foot nine, that means that CEOs as a group have about three inches on the rest of their sex. But this statistic actually underestimates the matter. In the U.S. population, about 14.5 percent of all men are six feet or taller. Among CEOs of Fortune 500 companies, that number is 58 percent…

“…Not long ago, researchers who analysed the data from four large research studies that had followed thousands of people from birth to adulthood calculated that when corrected for such variables as age and gender and weight, an inch of height is worth $789 a year in salary.”

It pays to be tall.

The Millionaire Spouse

I read a wonderful chapter in the book The Millionaire Mind today on spouses and their relationship to millionaire-ism. The essence boils down to this:

The typical millionaire couple in America has been married for twenty-eight years. One in four have been married for thirty-eight or more years…

…There is a highly significant negative correlation between divorce and wealth, and, conversely, there is significant relationship between years of uninterrupted marriage and net worth…

…Future millionaires seem to be able to judge potential partners with respect to traits like sinceirty, cheerfulness, reliability, and affection.

One of the most important aspects of school and college that influenced millionaires in becoming economically productive adults? Learning how to make accurate judgements about people — and that is how they pick their spouses too.

Intelligence Clouding the Mind

Then I came across another paragraph that also struck me as a very interesting observation — that on intelligence and its effect on choosing your spouse.

Not all the intelligent people one meets in college have all the other important qualities. In fact, the quality of high intelligence can often act as camouflage. Some people are so taken with a suitor’s high level of intellect that the suitor’s deficiencies are concealed or overlooked, just as others are blinded by physical attractiveness. If one places to much emphasis on a quality like intelligence, then he may be insensitive to variations in sincerity, cheerfulness, reliability, and virtue, for example.

War and Business

This book features interviews of quite a number of millionaires. Several of the millionaires interviewed mentioned that experience in the military was vital to their economic successes later on — one of them even required that his son join the military for a couple of years before agreeing to hand over his business.

That has really bolstered my confidence in believing that the army hasn’t been such a waste of time after all. Sure, the amount of humble pie I have had to eat daily since conscripting has been considerable. But values such as discipline, humility, as well as experience of being away from home has been quite invaluable, especially if I plan to go overseas to study.

The Colours of the Wind

Most importantly though, has been the amount of interaction I have had to go through with people from all walks of life. Living in close spaces with people different from you and sharing completely different values has been difficult.

But over time, you realise that this — especially for me, as a business student — has been extremely helpful in helping me develop a knack of judging people more accurately, something mentioned by millionaires to be highly influential in helping them attain their millionaire status. It also teaches and condition’s one to keep one’s emotions in check, something essential in the fast-paced, and emotionally-draining business world.