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Book club Discussion #1: Rich Dad, Poor Dad

Hello everyone, This will be the home for the Book Club discussion of “Rich Dad, Poor Dad”.

I hope you all are ready for tons of great discussions. Since this is the first book club event, I will explain the format. We will work out of this blog post and everyone is invited to add a comment on something you would like to discuss from the book. This will serve as the spark to get everyone else talking and thinking.

Hopefully this can be an educational experience that everyone can benefit from.

Let the fun begin:

One of the most controversial points Robert Kiyosaki made in Rich Dad Poor Dad to me was when he discussed why buying a house was more of a liability than an asset. He states on page 73 that since the money you pay for your mortgage, taxes, insurance, and other house related costs take money out of your pocket that it is a liability.

Most people look at their house expenses as investment money, in hopes that their home will appreciate and make money for them in the future.

I am interested to hear people’s opinions on this issue.


Discussion

5 comments for “Book club Discussion #1: Rich Dad, Poor Dad”

  1. I would say this current recession has showed us that, you can’t look at your home an asset because the value can go down too and not just up.

    Posted by Eric | March 23, 2009, 11:08 pm
  2. I agree somewhat with that statement, but there is risk in the simple nature of having any asset. This recession has shown that no asset is safe whether it is a house, a stock, owning your own company, or anything else. I know people that have been saving in there 401k for over 20 years, and it is almost down to $0. So what makes everything else an asset that is different from owning a home?

    Posted by The Architect | March 23, 2009, 11:14 pm
  3. I also partially agree with the statement. One of the greatest expenses of owning a house is the time commitment required. Often the owner has to either fix and maintain the house and surrounding land, or pay exorbitant fees for the housing related costs.

    However, I have known several families who have owned small tracts of land that became very wealthy as the land around them developed.

    Posted by Phil J | March 25, 2009, 10:25 pm
  4. When I purchased my first home about 3 years ago, I found out there are a lot of expenses that go along with it. I went from 700 a month in rent to 1100. So that meant my cash flow went down but supposedly I was building equity. Well thanks to the recession, I now owe more on the house than what I can sell it for. A house you are living in sounds like a liability to me because right now I’m definitely liable for the loan I took out!

    Posted by TheMoneyMaven | March 26, 2009, 1:19 am
  5. But owning a home is no different than owning a stock: When you purchase a home you are putting up a certain amount of money in hope that it will increase. (paying your mortgage, and paying the stock price) When the values of either the stock or your home go up, you can use that increase as collateral to purchase something else. When the values go down, you loose money in either situation. The only difference is that you are paying for one over time and paying for one with a large lump sum up front. So my question is when you begin to loose money in the stock market, does a stock become a liablity?

    Posted by The Architect | March 26, 2009, 4:57 pm

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