Wednesday, July 15, 2009

Rich Dad: Learn To Be Rich

2 months ago, I attended one of Rich Dad's free "Learn To Be Rich" session in a Hotel conference room close to me.

You can see the next ones at

The hotel parking was $11 and there were no other parking in 1/2 mile radius.
The room was not indicated, no drinks served, no warm welcome.

I sat in the room along with some 70 other people. We watched a video from Rich Dad's website while waiting for the session to start.

Our speaker greets us, I must say I was very impressed, he was one of the best public speaker I have seen. His talk was well built, well organized, perfectly mastered, funny and he was always anticipating the audience's reactions.

About 60% of the talk was actually a very convincing sales speech to have us sign up for a 3-day real estate seminar coming up at the same location in 3 weeks.

In short the seminar "normally" cost $995, but if one signs up tonight, it's only $495, for 2 people, you get pretty much every book, video and manual Rich Dad ever published, you get access to the web site, the advisers, and all sorts of pre-written contracts worth thousands in attorney fees. A quick search on the web reveals that they've been doing these free seminars, every week, with the same deals, for at least 3 years and I didn't find anyone happy with the 3-day seminar which seems to be more of a 3 days sales speech for a 7 or 15 days training camp. The planning they showed us for the 3-day seminar had something like 100 sections, way too many to do anything more than define each topic quickly and give simple tips.

I took a few notes on the non-sales part of the talk.

The only thing you need to do to become is rich is " FIND THE DEAL "
or in other words, find a house that you will buy for very cheap and that you will rent for very expensive after minor or no repairs.

Everyone can look for the DEAL, it does not cost a dollar, just time and passion.

once you found the DEAL, you have the First Mover Advantage
=> have the seller sign a 30-day contract to sell to you only (to lock him)
=> then you have 30 days to find the money to make the deal happen
=> and since it's a great deal, you won't have problems with that
if banks don't lend you money you can search the web for Hard Money Loan: investors that will lend you the money and take parts of the benefits.

Look for FSBO (For Sale By Owner) => there is no agents.

a 401K is savings, it's bad, it's wasted money.
Real Estate or owning a business is investing.

Economic Cycles: describe the regular ups and downs of the economy.
In average every 6 years the market will go up and crash.
In average a recession last 18 to 24 months.
The recession starts at the highest point of GDB preceding 2 quarters of negative growth.

We've been in the current recession for 18 months, hence in average we should have about 6 more months before it ends.

=> you need to act before, BUY NOW

There are 3 ways to get rich
- stocks
- creating a business, wholesale something = quick cash
- real estate => easiest, cheapest to start with

To identify & make the DEAL, it's all about having the right spreadsheets, forms, contracts.
=> Learn before you do, take a Real Estate Class.

When a recession ends, usually the economy goes in a phase of expansion that lasts 5 to 6 years.
=> you should only leverage at the beginning of the expansion
=> you should sell (stocks, real estate) before the market reach the peak, don't wait for signs of weakness.
=> sell some real estate, and pay off your 'best houses to keep' before the dump !

Use the 1031 transfer to build your wealth avoiding taxes
=> you need to keep buying for a higher value and in the same type of housing (single family home)

create a Real Estate Investment company
=> deduce from your taxes, gas mileage, trainings...

All in all, this was a great & fun experience, and if you decide to try it, I would suggest to go without cash, nor checks, nor credit cards, nor phone... just to be on the safe side. These guys are just too good at doing their business: selling you seminars.

Suggested reading: Randy Pausch - The Last Lecture

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