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> I don’t want to reinvent the wheel, we’ll use the definition from one of the best personal finance book “Rich Dad Poor Dad” I was trying to understand the pe

> I don’t want to reinvent the wheel, we’ll use the definition from one of the best personal finance book “Rich Dad Poor Dad” I was trying to understand the perspective of the article, and that gave me the major clue. RDPD is one of many books that basically says the key to financial success is real estate investment. For a few people, and at certain times, maybe, but it is better for most people to make it a (small) part of a wider financial investment plan. Your first house (or any house) should be first and foremost though if as a place where you will live, and “primary residence as investment” is almost never a good thing.

kijin 6y ago
> it is better for most people to make it a (small) part of a wider financial investment plan. Theoretically, you are right. Realistically, most people don't have enough left to invest a substantial amount of money in another market once their primary residence has been taken care of. Last time I checked, over 60% of the net worth of the average American homeowner consisted of their home, with their 401k's taking up a significant share of the remainder. I guess that's one reason why RDPD was so popular: it told people that they could become a "rich dad" by just continuing to do what they -- and everyone else -- were doing.
pseudoramble 6y ago
I agree with your point. In addition, this book also suggests ideas that, in my opinion, are so far away from the minds of an average person that it's kind of absurd. Admittedly it's been years since I've read the book, but one example I can remember is setting up a corporation to reduce tax burden through. I don't think it's useful advice for somebody whose trying to get by and not already wealthy. I would've appreciated the article more if they skipped mention of "Rich Dad, Poor Dad" entirely.
paulryanrogers 6y ago
Agreed. RDPD influenced me a lot as a younger person. But now I'm convinced the house-as-investiment mantra is unsustainable. It also hasn't been true for most of history except select periods. The book also seems based largely on anecdotes and the premise that one has money or lucrative opportunities to begin with.

kijin 6y ago

> it is better for most people to make it a (small) part of a wider financial investment plan. Theoretically, you are right. Realistically, most people don't have enough left to invest a substantial amount of money in another market once their primary residence has been taken care of. Last time I checked, over 60% of the net worth of the average American homeowner consisted of their home, with their 401k's taking up a significant share of the remainder. I guess that's one reason why RDPD was so popular: it told people that they could become a "rich dad" by just continuing to do what they -- and everyone else -- were doing.

pseudoramble 6y ago

I agree with your point. In addition, this book also suggests ideas that, in my opinion, are so far away from the minds of an average person that it's kind of absurd. Admittedly it's been years since I've read the book, but one example I can remember is setting up a corporation to reduce tax burden through. I don't think it's useful advice for somebody whose trying to get by and not already wealthy. I would've appreciated the article more if they skipped mention of "Rich Dad, Poor Dad" entirely.

paulryanrogers 6y ago

Agreed. RDPD influenced me a lot as a younger person. But now I'm convinced the house-as-investiment mantra is unsustainable. It also hasn't been true for most of history except select periods. The book also seems based largely on anecdotes and the premise that one has money or lucrative opportunities to begin with.