Rich dad, Poor Dad

This is another book that I read while I was in transit to San Jose. This is probably the easiest of the 3 reads as the book is pretty fluent. I thought it was also the best read for an investor starting out for the first time.

The reason I chose this to be the first book for an investor (of the three I read on the trip) is because it talks about some fundamental principals about money. Being an accountant, I have some finance background that certainly aids me in my financial endeavors. When I am talking about fundamentals about money, I am talking about some of the myths associated with home ownership. Specifically, I am talking about thinking of a house as an asset.

In accounting, an asset is something that is purchased to generate income. A typical owner-occupied home does not generate income, however, this concept delivers an important lesson about money. If you can somehow generate an income or at least reduce your monthly payments, you can generate an opportunity to make more money, making your money work for you instead of you working for money.

The book goes into detail about how people move into bigger and bigger homes when their salaries go up and up. The problem becomes that people don't really get further ahead because they carry larger mortgages as a result. In that sense, you fall into the rat race. The book starts to go into detail about how to get out of the rat race. By the end of the book, the tips become more advanced (and more American), so these points may not be advantageous for the person just starting out. I like to think that this book can convince people to think of real estate when thinking about their investments.

The reason I am stressing this point is because I think our education system is somewhat flawed. I remember in multiple math classes learning about trigonometry and wondering when the hell I would use this info. After university, I still think that trig is somewhat useless for the average person. I'm not saying that trig should be removed from the curriculum, but I think money should be added.

How many people get themselves into deep credit card debts? How many people have trouble with student loans? There are people that don't understand basic concepts about money and I think a more concerted effort should be taken in our schools to help kids understand how to use money properly and effectively. It can be the largest lesson a kid could learn. Anyways, it's just my two cents.