Financial fluency...

[dr_qwertie]

Hi all

Well I’ve tried to be good and do my ‘due diligence’, by reading as many threads as possible before posting. I was determined not disgrace myself by asking newbie questions that have been asked a million times before. I’ve been working through the brilliant list posted by Monid:

http://www.propertytalk.com/forum/showthread.php?t=8374

but have a ways to go yet! I’ve already gleaned a mass of very helpful information, and will continue to do so.

That said, I’ve gotten impatient (a bad sign for Property Investing already?) and would like to pose the following question to those of you so much farther along the path:

Where did you gain your ‘financial literacy’? This is something highlighted in the Rich Dad series and is an underlying theme in all investing I’ve read about. Knowing how to earn money is one thing, but knowing how to make money work for you is totally another. Where did each of you get your financial education? Was it wealthy parents imparting their wisdom, or conversely ‘working class’ folks that you aspired to not become? Was it something you learned young or picked up after much trial and error? This question really sparked from reading Volatile’s thread:

http://www.propertytalk.com/forum/showthread.php?t=6488

…inspiring to say the least but depressing to someone who is mid-thirties and only just learning to speak ‘money’ – a long way to go to ‘financial fluency’.

Well that’s my first query (believe me – not my last). And a small “Hello” from a new member to the PT Forums.



PS – What is the strange fascination with cats here?

[Dean@Massiveaction]

Cats?? No cats here. Anyone seen any cats??
Talk like that could get a man killed!!



Seriously though welcome to PT. AS for financial literacy the fact that you know you need it is 99% of the journey. Keep reading, get around people with more nous than you, get along to some PIA meetings and courses, read everything you can find ~ it'll come to you!!

[Monid]

Hello Dr Qwertie, and welcome to the forum.

No idea what the strange fascination with cats is... Never understood it myself

Good question.

I think for myself I picked it up via reading, doing and discussing. Oh and board gaming...

In terms of discussing my wife's mother is a property investor (as are my folks) and that meant my wife already had a notion that property investing might be a good idea. We had quite a few long discussions with her driving up and down the country for one reason or another, and while I don't agree with her about everything it was a great stimulus for thought.

As a result of this and browsing for property we bought our first home, based on the simple logic that the mortgage cost half as much as our rent did ($150 a week over 25 years rather than $300) We then realised that if we doubled our repayments to $300 we took the time to repay down to 7 years from the 24 years remaining...

A year latter we spotted a property in Rotorua for $39000 and thought that that was a mad price for something in as nice a place as Rotorua... While we didn't get that one we did buy a couple of others and at the same time discovered PT.

This was then as now a great resource and I rather quickly upskilled myself by reading my way through the forum. I remember someone posted a link to a pdf of richdad poordad which I thought was interesting reading. And basically picked up most of my financial literacy here.

However I think much of financial literacy is commonsense, and a fair amount has been picked up just through living life following a philosopher's motto, namely that the unexamined life is not worth living. Much of property investing to me is just the application of logic... And thinking about what is happening and what I want to get out of a situation.

I guess much of what I consider to be financial literacy I have accumulated in odd ways here and there, so my propensity for saving I blame on my parents and I have learnt things from places like boardgames, monopoly of course but also cashflow (I still use this on our friends to introduce them to the idea of property investing) and more obscure but great games like Puerto Rico.

Anyway that's enough rambling...
David

[Kay]

Yes, all of the above is great advice. Another tip is to talk to as many property people as you can, but not to people who aren't interested. You can easily sound people out, and then drop the subject. It can be very off-putting, when you are starting out, to have people tell you it won't work, it can't be done, or they had an uncle who had some terrible disasters in property.

I found the books (Robert Kiyosaki is a good place to start, then read the New Zealand ones) and the games very stimulating, and getting around property people is great.

I also go to heaps of seminars - but I never buy anything there!!

All the best for an interesting future.

[Kay]

P.S. Free or cheapie seminars, that is.

[tillerman]

Congratulations dr qwerty for realising all this in your mid thirties, have a thought for some of us who came to the same conclusion in our mid 50's. The mind boggles on what you might achieve in the next 20 years!
Good luck and welcome to the best property information forum around.

[sooty]

dr qwertie

Hi, Whats wrong with a little pussy.

[dr_qwertie]

Thanks for the feedback folks - love this forum thing!

Monid - you mention the boardgame Cashflow from RK (look at me using acronyms like a veteran!), I've always been interested in the idea of it, but the only feedback/reviews I've heard about it are from RK himself (not personally...books etc. ) and his army of 'advisors'. So as you can imagine I'm duly sceptical as to their objective opinions.

Is it all that and a bag of crisps? Because I love the concept of an interactive approach to learning.


Cheers

The dr.

PS - Thanks too Tillerman for making me look at my half-empty glass and realising it's actually half full!

[rueben]

Like you, I realised in my early thirties that I really didn't know anything about wealth. I had learned from my Father about being self-employed - but that it was very risky.

The only way I knew to "make money" was to get a JOB, and buy my own home.

I had pre-conceived ideas about the stock market and thought it was far too risky for me.

Rich Dad, poor Dad was the catalyst for me too. I read it 8 years ago and can honestly say I wouldn't be where I am today without it. It opened my eyes to alternatives.

The only thing I regret is not pressing forward faster and taking a long time to have confidence in myself and my abilities.

I look at where we could have been with our financial goals if we had just got off our butt faster, but also look back 10 years and we see how far we have come (even with having 3 kids and one income during that time).

The one thing that stands out for me is that we are doing different things than our friends. You may find they knock you back - don't let them. Only listen to those who you know have done what you want to do.

[Perry]

I agree with pooomba with reference to the notion that
knowing you need to know is most of the way there. That's
not to say that the last little bit is easy, though.

I'm sure that – with enough thought – I could put it more
succinctly, but the basic concepts of passive income,
a business, increasing-value-assets, depreciation and tax
deductions are among the larger foundation stones.

The ways in which forumites gained their financial
intelligence are – I suspect – as varied as the people
themselves. But the distilled wisdom of them all will contain
those 'foundation stones' and a few more.

<scratching head, here, trying to recall the quote . . . >

There are those that know and know they know and they can
be teachers;

There are those that don't know and know they don't know
and they can be taught;

Then there are those that don't know and don't know that
they don't know and they're downright dangerous.

Welcome! :

[Monid]

Monid - you mention the boardgame Cashflow from RK (look at me using acronyms like a veteran!), I've always been interested in the idea of it, but the only feedback/reviews I've heard about it are from RK himself (not personally...books etc. ) and his army of 'advisors'. So as you can imagine I'm duly sceptical as to their objective opinions.

Is it all that and a bag of crisps? Because I love the concept of an interactive approach to learning

Well Dr I think it is good as far as it goes. Its a great introduction to the basic ideas and particularly of replacing wage income with investment income. It does oversimplify the market which encourages much more risk taking than is prudent... So for example if you get the opportunity to buy shares for $1 a pop then you should spend all your money on shares... it will inevitably pay off in the game... but not necessarily in real life. To me it was worth what I paid for it, but I found it second hand for $15

It is vastly better than the computer game which I just couldn't get into. There was a discussion here awhile back about the relative merits of various 'property' boardgames, might be time to hit the forum search or alternatively you can look at independent reviews at the place for all advice regarding boardgames boardgamegeek: http://www.boardgamegeek.com/game/6552

Cheers
David

[Monid]

And while you are there check out this list: http://www.boardgamegeek.com/geeklist/3372

Its of Business Economic Finance Games that Help You Get Rich in Real Life

I've played a few of the games and I am now looking out for the rest oh and Puerto Rico is an excellent board game which is well worth playing.

David

[FreezingandHot]

Take someone successful in IP out to lunch, it is a great way also to get to know the person and how they think about IP.

FH

[dr_qwertie]

Take someone successful in IP out to lunch, it is a great way also to get to know the person and how they think about IP.

FH

Quite the idea! I've seen a lot of posts where the veterans are very amenable to the idea. My one ‘challenge’ is that I’m currently living in London, so popping along to Mt Eden for a Burger Wisconsin brunch (oh I miss those burgers!) is a bit of challenge. That said, Monid I see you have location as Northern Ireland? If so, I’m sure I could get a cheap flight to come buy you a coffee somewhere local if you’d be up for it?

Perry – that quote is bang on the money (‘scuse the pun?). I must admit, when reading or listening to the plethora of books and tapes I have been, that promote a whole alternative approach to money and life…it scares me how standard 'society' can teach flawed ways of thinking. But then would society work if everyone went out seeking passive income, and the only ones that worked were those passionate about their jobs (a rare few?). Or am I over-simplifying here?

As an aside - does anyone write down their Financial Strategies, Goals, Buying/Selling Criteria? With all that I am taking in, the only way I can see to tackle this initially is to have EVERYTHING of importance that I have read written in a document I work through when I look to invest. There is no way I can imagine absorbing enough to be able to make 'sound' calls to begin with...or is that where the fun of making mistakes comes in?

[Perry]

Perry – that quote is bang on the money ('scuse the pun?).
I must admit, when reading or listening to the plethora
of books and tapes I have been, that promote a whole
alternative approach to money and life . . . it scares
me how standard 'society' can teach flawed ways of
thinking. But then would society work if everyone went out
seeking passive income, and the only ones that worked were
those passionate about their jobs (a rare few?). Or am
I over-simplifying here?

I suspect that may be a question that's vexed philosophers
for centuries. Cue David & Paul.

It seems that there will always be those for whom the daily
toil is a necessary evil, an adjunct to "take thought not of
tomorrow, for tomorrow will take care of itself." And to
whom the short term distractions of boozing, betting, baccy
& banging are all that there is in life worthy of toiling for.

For whatever reason, it seems that there will always be
people who simply aren't ready for it – no matter what any
particular edifying "it" may be. When that "blinding flash of
the obvious" [passive income] hits, how many reflect and
ask themselves, "how could I have been so dumb for so
long? How could I have missed what now seems so obvious?"

Trying to educate people to a concept that's foreign to their
very nature has it's own danger of pearls and pigs and
backlash.

Sometimes "standard 'society' doesn't teach flawed ways of
thinking." It is simply there: millions of mute examples to witlessly
follow. Years of silent conditioning of awesome proportions.

How eloquent was Tillerman's comment:

Congratulations dr qwerty for realising all this in your mid
thirties. Have a thought for some of us who came to the
same conclusion in our mid 50's.

Some on PT started in their teens!!!

Among the "those that don't know and don't know that they
don't know" are inevitably some who don't care that they
don't know. To whom ignorance is bliss. But for those who
do know, there is also a penalty: knowledge brings its own
hidden burdens.