Guest growl Posted August 22, 2005 Share Posted August 22, 2005 There is a board game called cashflow for kids that aims to help children learn about finance and investing - the adult version is called cashflow - see www.richdad.com<{POST_SNAPBACK}> Is that the book 'Rich Dad, Poor Dad'. Very interesting and much better than most of the self help rubbish. Useful advice along the lines of what is an asset and what is not. Such as the car is not an asset or the house if you are paying a mortgate. Usefull graphs and explanations on what goes out of your income over a month and what you can count as profit. How your job can be your job but your business can be something else and you work at your job while you eventually build up your business. All in easy to understand laymans terms. They should make children read that. Quote Link to comment Share on other sites More sharing options...
Bucephalus Posted August 22, 2005 Share Posted August 22, 2005 I honestly think that working out tangents and using cos and sin, basically geometery, oh and algebra should be dropped from the maths syllabus and replaced with life finance.Of course geometry and algebra have there place but most people will never use either, you dont need to know how to use PI to work out the area/volumes of circles/cylinders. <{POST_SNAPBACK}> And dumb down even more? If you can understand trig, algebra, analysis etc you'll understand mortgages just fine. Life finance would be very easy, with an even more restricted set of things to know than is already the case. If people don't understand APR, it's because they don't listen at school. They still won't listen if you call it life finances. To anyone with a very basic grasp of maths, all the info in the world is available at the click of a mouse. If people are ignorant, it's not because they cannot inform themselves but because they would rather focus on their new car than on understanding the APR of the loan required to pay it. School won't change that, life finance or not. Quote Link to comment Share on other sites More sharing options...
lowrentyieldmakessense(honest!) Posted August 22, 2005 Share Posted August 22, 2005 The one I have only works in a bull market. (That is, the message is: "buy, buy, buy!")<{POST_SNAPBACK}> Don't think so - message is more buy assets that put money in your pocket not rental property that currently takes money out of your pocket - unless your the tenant. - also the author is currently buying gold - Dr Bubb also appears to be recommeding this at the moment. ALL BOOMS BUST! Words of Caution from Robert Kiyosaki Lately, I have been asked if we are in a real estate bubble. My answer is, "Duh!" In my opinion, this is the biggest real estate bubble I have ever lived through. Next, I am asked, "Will the bubble burst?" Again, my answer is, "Duh!" It was only a few years ago we were in a real estate depression, which proves how quickly people forget. In 1987, the stock market crashed and the Savings and Loans went out of business. That led to one of the biggest real estate fire sales in history. By 1991, the real estate market was depressed and it remained depressed until around 1998. In Hawaii, the real estate market remained depressed until 2001. Today, the Hawaii real estate market is on fire and people have already forgotten how bad the market was. So the answer to the question, "Will the real estate bubble bust?" is an emphatic, "Yes. All bubbles bust." The reason I write this alert is because this time, when the bubble bursts, I think it will be a monster. Never in my life have I seen so much money being made on such weak fundamentals. If you think the last recession caused by the bubble bust was bad, the coming recession will be at least twice as bad. It might lead to a depression. The reason I put forth this alert is not to frighten anyone. The reason I put forth this alert is to say get prepared for the coming economic changes. Presently, although Kim and I are still buying real estate, we are also selling our "junk" real estate. Eight months ago, Kim put on the market a small apartment house valued at $1 million, for $1.4 million. People complained and no one bought it. So four weeks ago, she raised the price to $2.0 million and it sold in one day for full price. To me, this is more than a bubble... it is a mania. As many of you know, the best time to get rich is after a crash. My suggestion is: if you are new to real estate investing, this is not the time to jump in. If you are holding "junk" properties that are costing you money, you may want to consider unloading them. How long will the bubble last and keep expanding? I do not know. I just wanted you to know that I am currently preparing for a crash, an economic recession, and possible global depression. Why? Because this is a very big worldwide bubble... the biggest I have ever seen. SAVERS ARE LOSERS Also, I am getting rid of my U.S. dollars. As you may know, the U.S. dollar has lost nearly 40% of its value against other currencies in the last four years. That means if you have $10,000 in savings in the year 2000, it is worth about $6,000 in purchasing power. Rather than holding cash in the bank, Kim and I have been holding our excess cash in gold and silver bars. Why? Because you will know that the dollar is falling because the price of gold and especially silver will begin to rise. When silver goes higher than $8.50 an ounce and gold reaches $500 an ounce, you will know the end is near. When the crash comes, the currency of many countries will go down in purchasing power as the price of these two precious metals rise in value. A GREAT BOOK This past weekend, I held a class for about 150 people on the book entitled "The Dollar Crisis," authored by Richard Duncan. If you want to better understand why the real estate bubble bust and the crash of the dollar will probably lead to a prolonged recession, you may want to read this book sooner rather than later. In a nutshell, we really do not have a real estate bubble... the world is in a currency bubble. In other words, the governments of the world have printed too much "funny" money and cash will soon turn to trash. Even if you are not in real estate or are saving dollars, you may want to read this book to find out what you need to invest in now, before the bubble bursts. If you are in stocks and mutual funds, you definitely want to read this book. Quote Link to comment Share on other sites More sharing options...
Bucephalus Posted August 22, 2005 Share Posted August 22, 2005 For me The Chuz called it correctly earlier, even I as a computer programmer have no need for knowing how to manually calculate eg the volume of a cylinder. Can anyone name a profession that does?<{POST_SNAPBACK}> Calculating the volume of a cylinder is a complete piece of piss. It's pi*radius squared*height. It's a simple series of multiplications that takes 5 minutes to explain. You don't think that there is some more complicated math behind your programs? And that learning this might be a step along the way to more advanced stuff? What if someone asked you to make a programme calculating the volume of a cylinder? Why bother learning to spell while we're at it? Every one has access to a spell checker right? Can anyone name a profession that doesn't? Quote Link to comment Share on other sites More sharing options...
lowrentyieldmakessense(honest!) Posted August 22, 2005 Share Posted August 22, 2005 Is that the book 'Rich Dad, Poor Dad'. Very interesting and much better than most of the self help rubbish. Useful advice along the lines of what is an asset and what is not. Such as the car is not an asset or the house if you are paying a mortgate. Usefull graphs and explanations on what goes out of your income over a month and what you can count as profit. How your job can be your job but your business can be something else and you work at your job while you eventually build up your business. All in easy to understand laymans terms.They should make children read that. <{POST_SNAPBACK}> it's from the same author. think they should make most financial advisers read it as well. Quote Link to comment Share on other sites More sharing options...
Elizabeth Posted August 22, 2005 Share Posted August 22, 2005 (edited) How about a small subject called - "Skills for life" or something like that, which is mandatory when children do GCSEs.1. Deals with Sex 2. Relationships 3. Morals; Right and Wrong 4. Finances 5. Basic Healthcare/Lifestyle choices 6. First Aid 7. Avoiding Scams 8. Health and Safety And anything else thats useful.... <{POST_SNAPBACK}> This is nice, but morals? Thats tricky! - requires both in principle agreement and reinforcement from the home environment. Consequence. The great teacher of responsibility. I thought they started to get it right when they started jailing the parents of truants. ("I can't make my kid go to school cause she doesn't want to". Excuse me?) Now jail the parents of petty muggers, happy slappers and Nike thieves! The problem with the present situation is that too many current adults never grew up and learned consequence, impulse control or responsibility, far less healthy ways to instill these adult attributes in their children (Its not my fault, the bank shouldn't have lent it to me, Statement 1 False, Statment 2 True - but get a grip! ) How do you get backup from these adult nappy cases for this great leap forward with their kids? Edited August 22, 2005 by Elizabeth Quote Link to comment Share on other sites More sharing options...
lowrentyieldmakessense(honest!) Posted August 22, 2005 Share Posted August 22, 2005 OK. Egg on face. Hat eaten. I take it all back. It's a great game anyway!<{POST_SNAPBACK}> Don't know if its relevant to this thread but thought I would copy in his next article - i know this guy uses real estate to make money and a lot of people on these boards don't like that idea - but he does seem to know what he is talking about. HISTORY IN THE MAKING A Follow-Up to "All Booms Bust" by Robert Kiyosaki Thank you for your response to my Financial News Alert "All Booms Bust." The number of people that responded surprised me. Since the response was substantial, I thought I would continue on with my thoughts on the subject of the probability of a bust coming. Also, I thought I would add what I am doing to profit from the bust. So thank you for your interest in the subject regardless if you agreed or disagreed with my message. About a week after my message on the coming bust, the June 18th 2005 issue of The Economist ran two different articles supporting my concerns about the real estate market. The following are some comments I think are noteworthy. They are: Measured by the increase in asset values over the past five years, the global housing boom is the biggest financial bubble in history.” Prices are already sliding in Australia and Britain. America’s housing market may be a year or so behind.” Not only are new buyers taking out bigger mortgages, but existing owners have increased their mortgages to turn capital gains into cash which they spend. As a result of such borrowing, housing booms tend to be more dangerous than stock market bubbles and are often followed by periods of prolonged economic weakness.” A study by the IMF found that output losses after house-price busts in rich countries have, on average, been twice as large as those after stock market crashes, and usually result in a recession.” Two-fifths of all American jobs created since 2001 have been in housing-related sectors.” The housing boom was fun while it lasted, but the biggest increase in wealth in history was largely an illusion.” The day of reckoning is closer at hand. It is not going to be pretty. How the current housing boom ends could decide the course of the entire world economy over the next few years.” You may want to obtain a copy of this issue of The Economist and read the entire two articles and then decide for yourself if there is another real estate boom ahead, or a bust. RECESSION OR DEPRESSION On Friday, June 23rd 2005, I was on Your World with Neil Cavuto on the Fox Network. He asked me what I recommended when it came to investing in real estate. I replied, “If you’re new to real estate investing, this is not the time to get into the game.” Unfortunately, many people are in the market late and not only have paid too much for their homes, they are over-leveraged. The Economist article went on to say, “42% of all first time buyers and 25% of all buyers made no down-payment on their home purchase last year.” That is what I call over-leveraged. They bought late in the cycle, probably paid too much, and have signed their lives away on the dotted line. I am concerned for these people. In 1929, the stock market crash led to The Great Depression. Some of the causes of the Depression were excess credit and too many people buying stocks on margin... i.e. leverage. In 2005, once again there is too much credit and instead of stocks, individuals are purchasing real estate with leverage. So is it “Deja-vu all over again?” History shows that there is a depression approximately every 75 years. The last depression occurred 75 years ago. Is it time for a really big bust or will the boom continue on? Only time will tell. HOW I AM INVESTING TODAY As many of you know, I have been in gold and oil for several years now, beginning in 1996. While Kim and I have continued to invest in real estate, I have been more active in taking my Chinese gold company public on the Toronto Venture Exchange. I have also invested in several oil and gas wells. When it comes to real estate, Kim and I have let go of non-performing properties and made several million dollars. Does this mean we are selling real estate? The answer is “No.” Although selling we are still buying property, we are being very selective. Although we have “flipped” properties, our primary objective is good properties in good locations with a positive cash flow. Currently, Kim and I are buying properties in Oregon as well as in Arizona. We bought them because we believe they will do well regardless if the real estate market booms or busts. PROBABILITY VS PREDICTION Although I have made predictions, I don’t like to. Instead of predicting the future, I choose to evaluate probabilities. A friend offered Kim and I the opportunity to buy a piece of land for $1 million. He said, “In two years the property will be worth $2.5 million.” If this were year 2002, I would have jumped all over the deal. But it is year 2005. The question I ask myself is, “What is the probability that the boom will go on for two to three more years?” What is the probability that the property will more than double in two to three years?” My answer is “slim to none.” Your answer may be different. Can I be wrong? The answer is, “Yes I can be wrong. The boom may go on for ten more years and that $1 million dollar piece of land could be worth $10 million maybe $15 million.” Yet at this late stage of the market, I will only invest in properties that return a cash-on-cash return on a monthly basis. That is why I like my Oregon and Arizona deals. In the short term, I may not make as much money as the land deal, but they should return a positive cash flow regardless if the market goes up or down. After the crash, I may change my strategy. WARREN BUFFET Even Warren Buffet is seeking safer investments. Recently he announced he was investing in utility companies... not for capital gains but for capital safety. Buffet's two most important rules for investing are: Rule #1. Don’t lose money. Rule #2. Don’t forget rule number one. THE GREATER FOOL In the world of investing, there is what is known as The Greater Fool Strategy of Investing. When someone buys a property to flip, or a share of stock to sell at a higher price, that is the Greater Fool Strategy in Action. In simpler terms, a person buys a property or a share of stock not to own but in the hopes that there is a fool greater than them. The problem is, when the bust comes, and it will come, many people who were buying for a fool greater than them, may find out that they were the last fool in line. A FINAL WORD FROM THE ECONOMIST Another interesting comment from The Economist went, “Another sobering warning is that after British house prices fell in the early 1990s, it took at least a decade before they returned to their previous peak.” I’ve made a lot of money in the last few years in real estate, but I believe it is time to move on and invest in other assets. And that is why I am moving more of my money to gold, silver, oil, and gas. While I love real estate as an investment, and will continue to always invest in real estate, this is not the time to let love blind me to reality, the reality that all booms eventually bust. Thank you, Robert Kiyosaki Quote Link to comment Share on other sites More sharing options...
Guest horace Posted August 22, 2005 Share Posted August 22, 2005 (edited) Do schools continue to teach R.E? That, as Frank Zapper said, is guaranteed to f@cck your kids lives up. horace Edited August 22, 2005 by horace Quote Link to comment Share on other sites More sharing options...
madenph Posted August 22, 2005 Share Posted August 22, 2005 Calculating the volume of a cylinder is a complete piece of piss. It's pi*radius squared*height. It's a simple series of multiplications that takes 5 minutes to explain. You don't think that there is some more complicated math behind your programs? And that learning this might be a step along the way to more advanced stuff? What if someone asked you to make a programme calculating the volume of a cylinder? Why bother learning to spell while we're at it? Every one has access to a spell checker right? Can anyone name a profession that doesn't? <{POST_SNAPBACK}> You're missing my point. Yes it is a simple calculation. But what is more important in life, knowing how to calculate the volume of a cylinder, or knowing that it is foolish to take out an Ocean Finance secured loan at 12%+ to pay off an unsecured Lombard loan at 8%. Quote Link to comment Share on other sites More sharing options...
Guest horace Posted August 22, 2005 Share Posted August 22, 2005 (edited) >> madenph You are indeed correct in my view but what we all tend to miss is the `I want factor`. Let me expand. BMW / Ocean Finance or BMW / volume of cylinder? There in lies the rub or perhaps the lack of common sense and I don`t think it is possible to teach the latter. horace Edited August 22, 2005 by horace Quote Link to comment Share on other sites More sharing options...
Bucephalus Posted August 22, 2005 Share Posted August 22, 2005 You're missing my point. Yes it is a simple calculation. But what is more important in life, knowing how to calculate the volume of a cylinder, or knowing that it is foolish to take out an Ocean Finance secured loan at 12%+ to pay off an unsecured Lombard loan at 8%.<{POST_SNAPBACK}> This is a false dichotomy. Calculating simple volumes is easy and can be taught with minimal effort to anyone who can multiply. Caculating volumes is a very useful thing to know how to do,(for doctors nurse, cooks, mechanics, etc etc). You don't want you nurse who has to give you a shot of morphine to get her volume calculations wrong, you won't have time to pay of your loan, secured or not. Understanding interest is a simple too. Once again a simple multiplication. 12% yearly interest on £100. 100*1.12=112. Compound interest, do it again: 112*1.12=125.44. Explain multiplication, and both are within your grasp. It's like saying you don'y need to learn to read as you never plan on reading Shakespeare once you've left school. Very shortsighted... Quote Link to comment Share on other sites More sharing options...
madenph Posted August 22, 2005 Share Posted August 22, 2005 "Explain multiplication, and both are within your grasp." My argument is why are we not taught how to apply these simple mathematical concepts to situations we will *all* go through in life - choosing a bank account, taking out the cheapest loan or mortgage, choosing a pension scheme etc. Quote Link to comment Share on other sites More sharing options...
Bucephalus Posted August 22, 2005 Share Posted August 22, 2005 (edited) "Explain multiplication, and both are within your grasp."My argument is why are we not taught how to apply these simple mathematical concepts to situations we will *all* go through in life - choosing a bank account, taking out the cheapest loan or mortgage, choosing a pension scheme etc. <{POST_SNAPBACK}> For starters, I am glad you no longer seem to think that no-one ever needs to do volume calculations. Second, I was taught how to apply simple mathematical concepts to financial situations in math. Third, you are going to face all sorts of unpredictable situations in your life. Your education should equip you with certain timeless skills (multiplication say) and teach you how to apply them and how to think. That way you can react to uncertain situations, like new financial products that you weren't told about at school. Fourth, most kids won't pay attention anyway because they would rather be watching tv and will end up being screwed out of their money one way or the other. Anyone with half a brain and a very basic maths will have no trouble choosing the cheapest loan, whether they were taught how to do so at school or not. Having said this, I think we can both agree that some basic financial education at school is no bad thing (just not at the expense of volumes, or trig or differentials etc) B. Edit for spelling. (You can tell I wasn't taught how to type at school ) Edited August 22, 2005 by Bucephalus Quote Link to comment Share on other sites More sharing options...
madenph Posted August 22, 2005 Share Posted August 22, 2005 For starters, I am glad you no longer seem to think that no-one ever needs to do volume calculations. Enough of the points scoring already! Having said this, I think we can both agree that some basic financial education at school is no bad thing (just not at the expense of volumes, or trig or differentials etc) I would obviously have both, they're simple concepts that can be taught in relatively short time. Far quicker than say learning a second language. But take the Johnny-come-latelys (my generation) into the asset bubble which we base this very site upon - they are going to get burned very badly due to a lack of financial knowledge. We are forced into buying housing at prices we have no chance of affording once our 2 year discount mortgages run out. Add to this the likelyhood of finding ourselves in negative equity and all that entails. Why are we not taught about economic cycles, inflation and interest rates? Why are we pressured into buying by an older generation who lived in a very different world to today, where the country still produced and sold goods to the world and the money poured in? Where is the teaching that counters this misguided parental advice? Why are we not taught to beware the big bad wolf in the sharp suit down at the bank who will pull every trick to take money off you? Quote Link to comment Share on other sites More sharing options...
Bucephalus Posted August 22, 2005 Share Posted August 22, 2005 Enough of the points scoring already!<{POST_SNAPBACK}> Ahem, yes point taken. I'll stop. But take the Johnny-come-latelys (my generation) into the asset bubble which we base this very site upon - they are going to get burned very badly due to a lack of financial knowledge.<{POST_SNAPBACK}> I am younger than you so if anything I am a jonny come later and I don't intend to get burned. some of my generation will. Their problem. I didn't blow max out my credit card, they did. They should pay, it's only fair to me. Why are we not taught about economic cycles, inflation and interest rates?<{POST_SNAPBACK}> You are not taught about this in Maths because it's economics. If you were not taught this in your ecomonics class, you had a bad teacher. If you chose not to study at least a little econommics, it's your own fault. Why are we pressured into buying by an older generation who lived in a very different world to today, where the country still produced and sold goods to the world and the money poured in? Where is the teaching that counters this misguided parental advice?Why are we not taught to beware the big bad wolf in the sharp suit down at the bank who will pull every trick to take money off you? <{POST_SNAPBACK}> School can't teach you everything. Like I said, you need to be taught some basics and how to apply these basics to situations you haven't seen before, i.e you need to be equipped to think. I've seen very expensively educated people given advanced courses in finance who still can't manage their finances: they would have been better served with less facts and more thought. Given that you are here and that you realise that something is fishy with house prices, you clearly have been taught at least some of the basics and you can think. So your education served you well enough no? Even today's devalued GCSEs give kids enough info to choose a cheaper loan. If they don't then that is their fault, not their educations. Quote Link to comment Share on other sites More sharing options...
madenph Posted August 22, 2005 Share Posted August 22, 2005 You are not taught about this in Maths because it's economics. If you were not taught this in your ecomonics class, you had a bad teacher. If you chose not to study at least a little econommics, it's your own fault. And herein lies the problem. At my school, which was at the time the highest achieving state school in the town, economics was only taught in the GCSE year and then only as part of the two following subjects. * Maths with Statistics (as opposed to Maths with Mechanics which all the guys took) * Business Studies (limited intake course available to approx 1 in 5 of all pupils). Now I don't know the quality of schooling your area received but in my town a significant percentage of pupils left at sixteen with no financial awareness! Quote Link to comment Share on other sites More sharing options...
Guest absolutezero Posted August 22, 2005 Share Posted August 22, 2005 How about a small subject called - "Skills for life" or something like that, which is mandatory when children do GCSEs.1. Deals with Sex 2. Relationships 3. Morals; Right and Wrong 4. Finances 5. Basic Healthcare/Lifestyle choices 6. First Aid 7. Avoiding Scams 8. Health and Safety And anything else thats useful.... They do have this (1,2,3,4 anyway) and it's called "Citizenship". It is also a pile of crap and of no use at all. I had the misfortune of teaching this a few years ago. A lot of people are also missing the point of what education is for. It's not to prepare people for life at all. It's to allow them to have little bits of paper which then allow them to go and get more little bits of paper (thereby not appearing on unemployment figures) and eventually get some kind of job. The last thing any Government would want is a population where the majority could actually think.... Quote Link to comment Share on other sites More sharing options...
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