Guest muttley Posted January 13, 2006 Share Posted January 13, 2006 As far as investments go, you may recall that in the summer of 2005, I warned of a slow down in real estate. I now believe 2006 will be dangerous for flippers or speculators. I trust you are not hoping to flip a property. My crystal ball thinks that the market for flippers may become dangerous in the U.S. just because building costs may go through the roof and the flippers who were buying properties off the plans in Miami and Las Vegas will eat lunch. If Miami and Las Vegas begin to collapse, a domino effect may follow. If a crash occurs, then good times will roll again as real investors, not speculators, begin to buy up bargains. As many of you know, I personally do not like to flip properties, although I have made a lot of money doing it. The reason I do not like flipping properties is because to me, that is speculation not investing. It is investing for capital gains, rather than cash flow. This is what Warren Buffet says about investing because prices are going up. He says: "The dumbest reason in the world to buy a stock is because it’s going up." I would say that is true for real estate. Do you know how many people buy real estate on the assumption that the property will go up in value? Do you know how easy it is to buy a property with the hopes that it’s price will increase? Do you know how hard it is to find a property that is undervalued or cash flows without it going up in value? Yet that is what so many people do. They buy on hope or a future promise rather than dig a little harder and look for a great investment that is high in value and low in price … today not tomorrow. While they have made a lot of money in the last few years, I suspect that it will be tougher and riskier to be a flipper in 2006. You may have noticed that gold is above $500 an ounce and may test $600. For those of you who attended our 2-day study group on the book the Dollar Crisis, by Richard Duncan, have done well if you followed the advice and strategies from that course. Silver may be the biggest sleeper investment now, especially if it remains below $10. Personally, I am watching interest rates and the inverted yield curve that hangs over the entire market. The inverted yield curve in interest rates, which means short-term interest rates are higher than long-term interest rates may means a drying up of short-term credit. If short-term credit dries up, a recession may follow. That coupled with a possible slow down in real estate, the war, excessive debt, and high oil prices means it will be a great time for active investors. Why will it be a great time? As Warren Buffet says, "It’s only when the tide goes out that you learn who’s been swimming naked." If you have been swimming naked, get dressed quickly! Happy New Year! Robert Kiyosaki This is part of an e-mail I received from the Rich Dad website.It says it all really Quote Link to comment Share on other sites More sharing options...
malco Posted January 13, 2006 Share Posted January 13, 2006 "The dumbest reason in the world to buy a stock is because it’s going up." Eh? Then he says: "You may have noticed that gold is above $500 an ounce and may test $600. For those of you who attended our 2-day study group on the book the Dollar Crisis, by Richard Duncan, have done well if you followed the advice and strategies from that course. Silver may be the biggest sleeper investment now, especially if it remains below $10. " Ah... so I was wrong to buy gold and silver at a time when they were going up? Does he mean you should really buy because you believe it to be undervalued - irrespective of whether it happens to be going up or down? He is being a little obscure. Although as it happens, gold was falling when I bought it... but not for long! Quote Link to comment Share on other sites More sharing options...
Fudge Posted January 13, 2006 Share Posted January 13, 2006 This is part of an e-mail I received from the Rich Dad website.It says it all really Strange, so after he has encouraged everyman and his dog to invest everything in property, he is now saying no not property commodities. His followers are not going to be able to get into commodities as they have all their money tied up in property, and at this stage of the game not easy to get out of. If I was one of his followers I would be just a little bit peeved. Quote Link to comment Share on other sites More sharing options...
BandWagon Posted January 13, 2006 Share Posted January 13, 2006 (edited) Where's TTRTR when you need him? A couple of months back he was telling us to listen to Kiyosaki, until I showed him this article... http://www.richdad.com/pages/article_dollar_crisis_part1.asp 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. 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. And TTRTR still can't see what's coming. Quite sad really. Edited January 13, 2006 by BandWagon Quote Link to comment Share on other sites More sharing options...
Guest muttley Posted January 13, 2006 Share Posted January 13, 2006 It's interesting how Kiyosaki is positioning himself away from real estate,having had a number of books in the "Rich Dad" series published on the subject.Last year he announced that his disciples should dump "junk" real estate,by which he meant those that were not covering the mortgage with the rent.(No sh*t,Rich Dad!!) Now he's reinventing himself as a property bear! And a goldbug to boot! Quote Link to comment Share on other sites More sharing options...
lookingafterthekids Posted January 13, 2006 Share Posted January 13, 2006 A book, a million or 7 in the bank. Hey you guys, your boat has come in Quote Link to comment Share on other sites More sharing options...
Guest muttley Posted January 13, 2006 Share Posted January 13, 2006 A book, a million or 7 in the bank. Hey you guys, your boat has come in Huh? Quote Link to comment Share on other sites More sharing options...
lookingafterthekids Posted January 13, 2006 Share Posted January 13, 2006 And from what I can recall, the main jist is be your own boss then invest in real estate or whatever. Quote Link to comment Share on other sites More sharing options...
Guest Bart of Darkness Posted January 13, 2006 Share Posted January 13, 2006 Huh? My thoughts exactly. Unless he means that the book earns millions. Sorry lookingafterthekids, unless you're a top author you won't get anything like that type of money. Quote Link to comment Share on other sites More sharing options...
lookingafterthekids Posted January 13, 2006 Share Posted January 13, 2006 Bart, I have no ambition to be a top author. Too much work and not enough fun for this short life that we are given but of of course it's publishing for him He made a valid point of working for yourself then reinvesting the profits in real estate. You guys could do the same. Promote the benefits of working for yourself then reinvesting the profits in whatever the current favorite is. Gold, mining, property, or any other fickle market. Then get off your bums and write about it rather than spouting on here! Those that can do ................................. Quote Link to comment Share on other sites More sharing options...
Guest muttley Posted January 13, 2006 Share Posted January 13, 2006 He made a valid point of working for yourself then reinvesting the profits in real estate. You guys could do the same. He just changed his mind about the "reinvesting in real estate" bit. Quote Link to comment Share on other sites More sharing options...
lookingafterthekids Posted January 14, 2006 Share Posted January 14, 2006 The major slant was work for yourself. If property ( as explained) was taken as gospel then other books were probably needed. But the general Se v E was solid Quote Link to comment Share on other sites More sharing options...
Guest muttley Posted January 14, 2006 Share Posted January 14, 2006 But the general Se v E was solid Se v E? Quote Link to comment Share on other sites More sharing options...
lookingafterthekids Posted January 14, 2006 Share Posted January 14, 2006 Se v E? Self employed v employed Back of the class boy Quote Link to comment Share on other sites More sharing options...
gone west Posted January 14, 2006 Share Posted January 14, 2006 Self employed v employed Back of the class boy Now, while having been self-employed in the past (before I retired), I must say that it does not suit all personality types. Many people are less stressed and far happier being employed. For many vocations, self-employment is difficult, if not impossible. Having said that, having focus and being self-employed is a very good way to accumulate wealth faster than the average Joe. I think Kiyosaki started with good intentions, but Rich Dad justs looks like another Get-Rich-Quick scam now. Seminars, books, courses, tapes,.... ugh! Quote Link to comment Share on other sites More sharing options...
lookingafterthekids Posted January 14, 2006 Share Posted January 14, 2006 Gone west, The main word being now. He has helped lots of people I know by pointing out the benefits of being self employed without the property bit. Retrospectively the books may look a bit ropey now because they focused a little on property but you can not hold that against them. L:ook at some of the 80's books on investment and wonder at how out of favour they look Quote Link to comment Share on other sites More sharing options...
Guest muttley Posted January 14, 2006 Share Posted January 14, 2006 Self employed v employed Back of the class boy Ah! It's not a geographical thing then. Of course the "work for yourself" idea was not exactly business's biggest kept secret.And Kiyosaki's idea to compound one's excess cash was not original either. I was not trying to discredit RK in starting this thread.On the contrary.I was highlighting his new found bearish stance on property as an asset. In fact Mr Kiyosaki's only original thought seems to be that your home is not an "asset" but a "liability". He does indeed extol the virtue of SE and building a business.The unimaginative minds on the likes of sinkingpig.com took this to mean starting a BTL empire.This worked for many.Unfortunately for them they now think the world has changed for their benefit. Quote Link to comment Share on other sites More sharing options...
lookingafterthekids Posted January 14, 2006 Share Posted January 14, 2006 Muttley, The majority of ideas in the bussiness world are not original. Thats the beauty of it! Ok so he's changed his stance. What was Warren Buffet advising on in the 70's, 80's or 90's. Little bit silly if you think he's bad cuz he's changed his stance. Main home = asset or liability depends on your position. For fairly active investors it will be viewed as a liability but for joe public it will always be viewed as an asset. In fact for a lot of switched o business types, their mortgage free home is still classed as an asset as it offers the family one thing. Security. Quote Link to comment Share on other sites More sharing options...
Guest muttley Posted January 14, 2006 Share Posted January 14, 2006 I never said he was silly.I agree with him!! My Poor Dad told me "House prices always go up.Rent money is money down the drain." My Rich Dad said "Renting is the best revenge, in an overhyped property market". Quote Link to comment Share on other sites More sharing options...
lookingafterthekids Posted January 14, 2006 Share Posted January 14, 2006 Never had a dad but if I did he would have told me: "Be self employed and invest in the property market. Do not try to jump from market to market trying to make a profit as , just as divesrification within a specific market can wipe you out, so can divesrification accross markets. Get to know the property market, stay with it and get to know it even better when the crowd are jumping ship. That is when the best, safest and the profits with least competition will be made. If you know what you know and are comfortable in the market then you will profit regardless of conditions. The general concensus is that the property market has peaks and troughs and profits will only be made on the peaks. Crap. Oh, and avoid 2BCCNB like the clap" Quote Link to comment Share on other sites More sharing options...
Guest muttley Posted January 14, 2006 Share Posted January 14, 2006 Don't knock diversification until you've tried it. You are advocating putting all your eggs in one basket because the basket is so good.Perhaps,perhaps,perhaps. Quote Link to comment Share on other sites More sharing options...
gone west Posted January 14, 2006 Share Posted January 14, 2006 Gone west, The main word being now. He has helped lots of people I know by pointing out the benefits of being self employed without the property bit. Retrospectively the books may look a bit ropey now because they focused a little on property but you can not hold that against them. L:ook at some of the 80's books on investment and wonder at how out of favour they look I think he was spot on in suggesting to invest in real estate when he did. I am currently reading a book written in 1980 by the head of a property investment company. It is a good laugh in retrospect but at the time probably made sense. I still don't think self-employment is for everyone, although some people could improve themselves immensly by it (and not just financially). "You have a much better chance of becoming a millionaire by starting your own business than by winning the lottery." - Gone West (who should know). Don't knock diversification until you've tried it. You are advocating putting all your eggs in one basket because the basket is so good.Perhaps,perhaps,perhaps. Rich Dad is very anti-diversification. Since I am not clairvoyant, I must diversify to some extent. Never had a dad but if I did he would have told me: "Be self employed and invest in the property market. Do not try to jump from market to market trying to make a profit as , just as divesrification within a specific market can wipe you out, so can divesrification accross markets. Get to know the property market, stay with it and get to know it even better when the crowd are jumping ship. That is when the best, safest and the profits with least competition will be made. If you know what you know and are comfortable in the market then you will profit regardless of conditions. The general concensus is that the property market has peaks and troughs and profits will only be made on the peaks. Crap. Oh, and avoid 2BCCNB like the clap" Perhaps. History does not repeat itself but it does rhyme. Diversification, done properly, cannot wipe you out; that is the whole point. Plowing every penny you have into one asset class and then leveraging to the max to further invest in said class can easily wipe you out, even if it is property. Quote Link to comment Share on other sites More sharing options...
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