Second Chance: For Your Money, Your Life and Our World
The financial world seems to be in chaos and companies are ordering layoffs again. Just this week Target, Ericsson International and Sony Mobile Phone Unit eliminated a total of 6400 jobs. The middle class seems to be getting poorer and the rate of food and housing assistance, which in 2013 was 47.6 million, is still at an all-time high.
What should you do if you are one of the middle class families worried about your finances? Is there any hope for a second chance?
I had the opportunity to read the newest book in the Rich Dad series Second Chance: For Your Money, Your Life and Our World by Robert Kiyosaki and learn a few things about getting my own second chance.
Our family was hit hard by the recession. It took until 2009 for the worst of it to set in. We were upside down in our house and the income producing cash flow we had in place all came crashing down. Our business, which we sold on contract, came back and our rental properties became unable to sustain themselves. What a mess!
Even thought that was an extremely hard time we learned a few valuable lessons. The foremost was not to give up; and that it was time to do something different. As Robert explains in Second Chance, “The most basic thing you need to know about money is that it is a subject that you can become smarter about, a subject that can give you the confidence to make informed and educated decisions.”
He contends that everyone needs a second chance because money as we know it has changed, and continues to change. Many people who are rich today will lose their wealth and only those who have financial education and knowledge will be able to weather the storm. There is a war on the middle class.
Our money is being stolen from us
It’s a harsh statement, but true. There are many ways it’s happening, you already know some of them. They are:
- The value of your labor is stolen via taxes.
- Prices rise when governments print money. As prices rise, people work harder, only to pay more in taxes and inflation.
- The banks steel savers’ wealth via a banking system known as the fractional reserve system. For every $1 we have in savings, the banks are allowed to lend $10 against it. This is another form of printing money that reduces the purchasing power of a saver’s money.
This book is split into three sections
Section one covers lessons we can learn from the past. Mr. Kiyosaki talks in-depth about the Great Depression and the similarities and lessons learned during the Great Recession of 2007. He predicts that “Today the world remains in an economic emergency. The poor get poorer, the middle class is shrinking, and millions of highly educated young people cannot find jobs.” and “Many of the rich whose wealth is in the stock market will get wiped out. Their wealth will be stolen in the next giant stock market crash.”
Pretty heavy and worrisome stuff!
Section two, is about your present financial condition and where your second chance begins. You can evaluate where you are today and then decide where you want to be in the future. There is hope.
Much of today’s economic crisis is caused by people who want to look rich on the outside but who are not rich on the inside. There is nothing wrong with wanting to look rich. Who wants to live below their means, right? But the continued rise in consumer credit debt and student loan debt must come to an end sometime.
This section encourages you to take a hard and honest look at your finances, starting with your income and expenses. Then moves on to what your assets and liabilities are at the current moment.
Those with high paying salaries from a job or profession and those with stock and bonds are in financial trouble if the stock market crashes, because their wealth in only on paper, he calls it tertiary wealth. They do not produce wealth themselves (farmers who produce food or factory owners who produce products) nor do they have the resources of wealth like gold, silver, fish, trees or fertile land.
This was certainly an eye opener to me. A farmer (and thereby even a homesteader) can be considered wealthy because they can produce products to sell. This one concept has completely changed the way I’m thinking about the benefits of purchasing land that will sustain our family and others.
He also suggests investing in real silver or gold, which is also a primary wealth vehicle and one that has been real money for thousands of years, and taking time to think about your future and which assets you would like to have. Choose a category by what most interests you, because you are going to do a lot of studying about it. Choose to – own a business, own real estate, own commodities or own stock options. You’ll want to commit yourself to becoming the very best you can be.
Section three is about the future – your future – and how you want to live.
These are big thinking ideas about entrepreneurship and investing, for people who want financial freedom more than job security. Robert Kiyosaki‘s lesson: “If you go back to school, know the difference between a paycheck and cash flow. When you go to school you learn to work for money. Financial education teaches you to acquire assets that produce cash flow.”
The better part of this chapter covers learning about how to practice, simulate and learning to leverage “good” debt to cash flow your way into the future. You will be creating wealth, and earning income that is passive cash flow from assets.
There is much to learn from this book and I have only begun to scratch the surface. For me, I think it all comes down to the kind of life we want to have in the future and how much we are willing to learn to achieve the goals we set.
I would say that this book is not for the weak at heart or for those who cannot look to the future and imagine a new life for themselves. The thing I like the best? While the message may appear bleak at the beginning, there is hope for your family to achieve the wealth you want to have. Real wealth, that can weather the financial storms ahead.
I have much to learn and it’s exciting!
You can see the future by studying the past. Your second chance requires that you avoid the dangers that lie ahead and be prepared for the opportunities that exist in a growing, global financial crisis.
Robert Kiyosaki’s new book Second Chance is a guide to understanding how the past will shape the future and how you can use Information Age tools and insights to create a fresh start. This book is a guide to facing head-on the dangers of the crises around us – and steps and tips for seizing the opportunities they present.
Thanks to Rich Dad for sponsoring today’s post and for providing the book for review.