Douglas Andrew’s book reads like a rejected first draft of Rich Dad, Poor Dad and right off the bat, it’s kitschy premise (ripped right from the above book) falls more than a little flat. In order to illustrate his points, the author relies on his sons and their imaginary friends – and the discussions they might have about finances. We’ll leave that whole imaginary friend thing alone – that’s just too easy, and focus on the advice that is tossed around.
From the start, with the title, you’ll think you’ve got your hands on a great blueprint that will have your financial future secured by the time you hit thirty. Well, unfortunately, that’s just not the case. There is some really great advice for those that are just starting out, but unless you are completely new to financial planning, the book will most likely fall short of your expectations. It certainly fell short of mine.
This is the perfect book if you want to get into real estate investment – since this appears to be the only way that the author believes you can make a million by the time you hit thirty. Obviously, the book was written before the housing crash and did not take into account the current state of the market. Many people that delved too deeply have ended up financially ruined thanks to similar advice.
Whenever you try to create multiple streams of income, the key to their success is diversity. Just ask the people who sunk all of their cash into real estate. Right about now, they’re probably wishing they had spread out their investments a little more. The basic premise is that you need to purchase first a home of your own, second a vacation property and then buy more rental properties.
The main problem is the age group we’re talking about here. Most twenty year olds are not ready for the responsibilities of owning more than one home – heck, most are strapped enough as it is with an apartment. There is a lot of responsibility that comes with owning your own home, and unless you’ve got a solid job, trying to keep up on property taxes and insurance for that many properties is going to be a stretch, especially since the first two really won’t be earning any money.
It gets even worse however. Although the author is a proponent of using debt leverage to make more money, he recommends frequent refinancing of your homes. Again, this advice really wasn’t well thought out given the state of the housing market right now. In addition, constant refinancing will not do your credit history much good and you’ll end up with far too much risk in my opinion and far too little return.
If you read the book with the right mindset, there is some good advice mixed in with the bad. Granted, hindsight is always twenty-twenty, but smart investors know that good markets never stay good forever and he could have done more to address how to handle down markets.
Originally posted 2008-11-17 05:38:50. Republished by Blog Post Promoter
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Book Review, Debt, Diversification, Income Streams, Leverage
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2 comments ↓
I felt the same way about the “Rich Dad Poor Dad” ripoff. It’s very similar. Different scenarios, but really the same info reworded. I wasn’t too impressed.
Interesting. I suppose times have changed, and all the proponents of getting rich via housing and real estate may be singing a different song.
Too bad.. I was hoping for a better review.
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