If you’re reading this blog, you’re probably a saver. And I’d bet you’d cringe a little if someone called you a spender. Frugality is nerdy. And by nerdy, I mean cool. So, I laughed a little when someone forwarded me an article written by Robert Kiyosaki (author of Rich Dad, Poor Dad) where he called me a loser:
And then it got worse. Robert called us out by name:
I was amused, but a little sad too. I read Robert Kiyosaki’s book when I was in my 20s and it was inspiring. He encourages entrepreneurship and thinking outside the box. His lessons are worthwhile and I respect him. But I digress…
100% Hate for the 4% Rule (Why I Won’t Run Out of Money)
Robert isn’t a fan of the 4% Rule or our retirement plans:
Perhaps this makes sense for them now in their 40s while they are relatively young. But what will happen when they get older and require more medical attention? Or what if their property taxes go up significantly over the next twenty years? Or what if inflation continues to grow over the next forty to fifty years at 2% a year? Or what if they get tired of living so frugally after all?
Without significant income, they won’t be able to stay afloat. They may enjoy life at $30,000 a year right now, but it will not be sustainable for their entire retirement.
You could come up with a million reasons for why the 4% Rule won’t work:
- Future market returns will be less: WW2 left Europe in ruins while America was virtually unscathed. The world is different now.
- AI/robots will take all of our jobs: This one will happen. However, society will adapt and move on.
- A war on the Korean Peninsula will demolish the markets: Scary, but probably won’t happen.
Worry all you want, but I believe that the same factors that fueled economic growth will continue to push it upward. Populations will continue to rise and so will productivity. Also, Robert seems to forget that the 4% Rule accounts for inflation. I’m not losing sleep over his criticism.
And I’m already more financially successful than I ever thought I’d be. I am not concerned about running out of money:
- In 11 years, my home will be paid off. My current 4% Rule projections include the mortgage. Once that is paid off, I’ll have an additional $14,000/year to spend.
- Social security is a sacred cow that no politician would kill. In less than 20 years, I’ll be eligible for it.
- My portfolio has far outperformed my expectations. With a portfolio of almost $1,500,000, I’m down to a 3% withdrawal rate now. And I’m still building wealth.
- I have $400,000 in home equity.
And the solution to worry is flexibility. If the stock market goes down by 50% the day after you retire, go back to work or clamp down on your expenses.
Wrong, Wrong, Wrong
Robert Kiyosaki got it wrong in three other places:
1) The Hedonic Treadmill Sucks
As a kid, my poor dad, my natural father, had this same mindset. Whenever we wanted something in life, he would say, “We can’t afford that.” Perhaps your parents said something similar like, “Money doesn’t grow on trees!”
My rich dad, my best friend’s father, asked a very different question. He would ask, “How can I afford that?”
I would ask a different question:
Why do you want that?
The hedonic treadmill is a dangerous game. Once you get that big home, are you going to want a bigger one? Once you have that, are you going to want a vacation home on a lake? What comes after that?
The solution is to be happy with where you are. Enjoy the moment. Hug your kids. Love your wife. Go for a walk after dinner and watch the sun disappear over the horizon. More isn’t a recipe for happiness, but endless jealousy and misery.
2) Robert Misunderstands Us
In today’s financial world, spenders are winners and savers are still losers. Of course, by spenders, I mean those who use their money to build their business or invest in cash flowing assets. And to spend wisely this way, you need financial intelligence that goes beyond just downsizing and cutting expenses. You need to understand how to create wealth, and in your own way, actually make money grow on trees.
I can only think of one person in the financial independence community that is just sitting on a huge pile of cash.
While the rest of us may not be the entrepreneur that Robert is, our money isn’t sitting around idle. FI folks are savvy investors with above-average financial intelligence. Some of us are landlords. Others invest in businesses. I loan money and invest in syndication deals.
3) We’re Not Losers
Robert’s use of the word loser is clickbait. He didn’t mean that I’m a pathetic person (Hey, no comment from you!); he meant that savers are doomed because of asset price inflation (assets include stocks, bonds and real estate) from poor monetary policy. He implies that because while Consumer Price Inflation (CPI) has stayed low, asset prices will rise disproportionately.
While Robert sees asset price inflation as my doom, it will only make me (and most early retirees) richer. Many of us own real estate and I even know some folks with VTSAX tattooed on inappropriate parts of their body. Just kidding, but I’ll bet someone has done it.
Sidenote: How much would I have to pay you to get a VTSAX tattoo?
CPI, which has been low, is much more harmful to the early retiree.
None of Us are Losers
Everyone has their own path to wealth. Robert chides us for not being entrepreneurs, but that isn’t the path for everyone. Not all of us want to be landlords or start a small business.
And none of us are losers in any sense of the word. The people in the Financial Independence community are some of the most incredible people who I’ve ever met. Robert Kiyosaki had an early impact on me, but you all are so much more inspiring.
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I think you have officially “made it”, sir. Though next time step it up a notch, would you, and get Warren Buffett to bad mouth you 😉
(VTSAX tattoo – I would seriously consider that… and pay for it myself!)
Buffett is nice, but I could probably get Charlie Munger to throw some insults my way. Unfortunately, I don’t think he’s discovered the internet yet.
And we should all get the tattoos! Confused members of the law enforcement community would probably think that we’re a gang. We’d all get locked up at FinCon…
Warren Buffett or Bill Gates even. Heck, you had Tim Cook on the same front page of Yahoo! once…
This post made me a little nervous, since my plan is very similarly aligned to yours, Mr. 1500. But I have faith in the approach. And although I’ve read my Robert K., I take him with a grain (or 50) of salt.
Agree with J$ there, Carl. Would love for the day Mr. Buffett or Mr. Munger bad-mouths me on my FI preparedness – just think of the traffic my little site will get! I love the way you have rationally torn apart Kiyosaki’s rant, which was merely scare-mongering.
People forget that if any of those adverse events he scares people about happen, inflation also disappears because inflation is also caused by favorable economic fundamentals – opposite of doomsday scenario. And businesses (that are in VTSAX or your diversified dividend portfolio) adapt to the new market reality. Sure, their profits and dividends may take a short-term hit but they will figure out a way to thrive in the new environment. This part, nobody wants to recognize. Never underestimate the human potential and creativity of business endeavors! Anybody who has done that over the last 100+ years of modern world has died or gone bankrupt.
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Where is this TSAX tattoo going to be, and how can we best make this into a Rockstar chaingang without incurring the wrath of the internet porn community?
The Vigilante recently posted…Net Worth 3Q 2017: I’m still a fraud!
*VTSAX, obviouusly.
Initial error due to bourbon, obviously.
The Vigilante recently posted…Net Worth 3Q 2017: I’m still a fraud!
First off congrats getting mentioned by Robert!!!
I’ve noticed that there is some vitriol rhetoric being thrown around by those peddling things like Rich Dad, Poor Dad, I Will Teach You To Be Rich, and others towards the FIRE community. It’s like they’re not happy if we don’t continue to buy their products to keep them wealthy.
I’m not sure they are happy with the new world order!!!
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“It’s like they’re not happy if we don’t continue to buy their products to keep them wealthy.”
Ha ha!
High profile shade must mean you’re doing something right. Congrats on the mention. 🙂
I think the bigger issue is that if people follow your path to wealth, they don’t need to buy his books and seminars. Then how will he keep up with the hedonic treadmill?
Matt @ Optimize Your Life recently posted…The Productivity Benefits of Letting Your Mind Wander
Guru treadmill?
And I use “guru” in the loosest of terms…
I read his books and enjoyed/took some valuable information out of them – but then I saw him slam index fund investing on marketwatch and I realized we might be on different wavelengths now.
I like your thoughts on flexibility being able to cover almost any scenario thrown at you – one thing I consistently find in the PF community is creative problem solving. It’s a great skill and can get you out of almost anything
Robert is a good dude, he is just throwing you shade because it took him 1501 days.
Beer mends wounds, invite him out for one.
Good job on the mention! Some ideas will always be difficult to accept for some people. Just remember, even though your hero may call you a loser, YOU are now a hero to some people, including me!
Thanks for the kind comment Avi!
Great post – you separate the need for ever greater sums of money from the reality that at some point one already has ENOUGH. I also read Rich Dad, Poor Dad and it helped me understand the difference between an asset and a liability, as well as helped motivate me to invest in real estate (although I shy away from some of his creative financing ideas). One other note about the 4% rule, if you only touch 4% per year, you never touch your principle – leaving an inheritance is nice – but you don’t need to die with 1 million parked in the bank.
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For sure; dying with vast quantity of money in the bank would mean I stayed in the cube far too long.
“Great post – you separate the need for ever greater sums of money from the reality that at some point one already has ENOUGH.”
Well put PedalsforPennies!
Just think; our debt driven economy is being challenged and conquered by you bad assess. Thank Thank you for not only doing it but sharing your journey along the way.
First congrats on the mention even if it wer derogatory. Now onto the four percent rule. I firmly believe it does not have a high probability of success for longer periods, beyond thirty years. I’m with ERNs research on this that you need four percent at the beginning of each thirty year period. Four percent does not ensure capital appreciation. But… I do believe somewhere around 3.25 this becomes a moot point. Add to that your counting your home in your expenses and not accounting for social security and I expect you’ll be fine. Robert and others need to be provocative to keep readership up.
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On the Mad Fientist podcast, Kitces also mention dialing back the 4% Rule a bit for periods longer than 30 years.
I’m not the slightest bit worried though. Besides my 3% withdrawal rate, the home equity and social security, the 4% Rule also assumes no future income. It’s hard not to make money when do the stuff you love.
*looking at you blog*
Mr. 1500 – A very, very nice response to Mr. Kiyosaki. I’ve read some of his books too and generally like them too.
I assume he downplays cutting expenses and downsizing because that’s what most people want to hear. Many people think that having a rich, extravagant lifestyle will make them happy. The FIRE community knows that a fancy lifestyle is not what makes you happy.
I always think of the Rule of 25 – take any annual expense and multiply by 25 to calculate how much money you need in retirement to support that expense. That means that cutting expenses can have a huugeee impact on when anyone can retire.
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Kiyosaki is one of the biggest charlatans. If he’s calling out the FI community, it means we’re doing something right!
I dig it baby!
Agreed.
He’s in the business of selling books that can cause a spark to people to make changes. He has a recognizable brand and angle that most people eventually grow out.
In a way, he’s the Tony Robbins of the “after FI” community. He some good points, but I’m not playing in his league.
So I guess the early retirement police have a new figurehead. They’re gaining momentum! FIRE community, triple-check your math and prepare for battle!
-RBD
Ha ha! Maybe he’ll target the FI community in his next book? We can only hope for that publicity!
And see you at FinCon!
“Or what if they get tired of living so frugally after all?”
One of the things I don’t understand is why people think being “frugal” is a negative. Like, after you ar FI you will go crazy and want to adjust your lifestyle and start buying random shit. It is true, some learn about becoming FI and do a full 180 on their spending, but most also do a full 180 on their approach to life. Then there are the rest of us, like myself, where being frugal is my natural state and has always been. It is more of a way of life than a diet to FI. Figuring out what is really important like the things you mentioned above: sunsets, your family, having “enough”. Once you hone in on that, “things” no longer take precedence. Great response, Carl!
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I know! It’s like frugal is a naughty word. A simple, efficient life is the right way to live!
See you at FinCon!
I enjoyed Rich Dad. But after reading some of his other books – especially Rich Dad’s Prophecy – I realized the dude has some terrible advice on actual wealth building. I burned the book in my wood stove, because I didn’t want anyone else reading his terrible advice.
Congrats on the mention, you’re obviously doing things right!
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“I burned the book in my wood stove, because I didn’t want anyone else reading his terrible advice.”
This is so poetic and beautiful. His book had more value heating your home…
I’m confused. Aren’t you following his advice? He says you need to buy income producing assets? Isnt that what’s going on? You’re not stuffing it in a mattress.
Seems like he’s just pissed that folks are not reading his stuf anymore. So he’s going after the folks people are reading.
I think he’s now focusing on seminars now: http://www.stltoday.com/business/local/get-rich-seminars-can-cost-consumers-dearly/article_95220433-0220-5974-a6ff-7f1e9f37b00b.html
“During a break, they asked students to call their credit card companies to increase their limits to $10,000 as a supposed lesson in negotiating. They wouldn’t learn until later that $10,000 also happened to be the cost of the cheapest Rich Dad advanced classes that the company tried to sell them on during days two and three, she said.”
Most people in the personal finance community realize that we can all work together and that a rising tide raises all ships. There are some, though, that think it’s a zero sum game.
I’ve been called out by people I had once respected, both in public and private. I even had someone that I really respected once use influence to zap my blog rankings. This really stung.
You just never know how people will treat each other. Glad you were able to keep a cool head.
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Yikes, I’m sorry to hear that happened to you. Keep your head up and never stop fighting the good fight.
Onward and upward!
Well, in Kiyosaki’s world, you are indeed a loser.
Kiyosaki made his money by selling books and courses on how to make money, not by investing in real estate (which he claims he does – but has not substantiated it)
You on the other hand made your money by saving, investing your savings in stocks and real estate, and not by selling snake oil.
In the rational world, you are a winner.
In the Kiyosaki’s world of selling snake oil, you are a loser. But who cares about Kiyosaki anyways?
By the way, congrats for getting hate mail from high profile people. I only get it from anonymous internet trolls…
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Yeah, his seminars cost $10,000! Yikes! I give it away for free!
Maybe I need to start charging? Maybe I need to go to a Rich Dad seminar???
Just kidding; to hell with that!
Ha, Kiyosaki went from zero, to teaching people how to invest in real estate without much experience himself. That’s how he made his money ( courses and books, not investing).
You went from zero, then went to save and invest your money for 10 – 15 years or so, and then 5 years ago you started writing about money. Most of your money came from investing, so you have credibility.
I am joking, but you wasted 10 years when you could have just sold $10,000 get rich quick seminars to 100 people and become a millionaire.
But I respect you because you built your wealth the respectable slow and steady way.
Nothing irks me more by the way than dream merchants like Kiosaki and MLM gurus, who prey on the uninformed and weak and offer them easy riches. These people all have graduated from the same University of Hype, and their whole goal in life is to prey on others. That is not how I want to live my life, as there is more to it than money.
Ok, my tirade is over 😉
DGI
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Oh my, love the School of Hype comment. Add School of Hope too.
And MLMs are the absolute worst. We have some family members that pedal this shit. It makes for uncomfortable reunions. I’m like, “Dude, just go out and get a job.”
YES: “I would ask a different question: Why do you want that?”
That one simple question can change the financial destiny for nearly anyone.
Absolutely. Figure out what is essential and really matters. Once you have that focus, pursue it full throttle and forget the rest.
…that’s the bit you understand and he seems to miss… IT’S PERSONAL… it’s what matters to YOU and your family not to other people…
like Miss Mazuma said: “most also do a full 180 on their approach to life” once they figure out the why…
it’s our definition of ‘enough’ in our lives… not someone else’s
he’s probably burned that anyone who follows to Troll at you may notice that your advice does NOT cost $10k… and then they may wonder why…and get suckered in! mwhahahaaha
*cough* ahem, sorry, I think Kristy@M-R is brainwashing us with
the evil cult meme
Great post , love how you established a sound rebuttal and then went with it. You of all people have a well established cash flow for the future with strong passive income.
I as well appreciate that you pointed out , not how can you afford it but rather why do you want it.
Maybe instead of giving away tote bags, Vanguard could have a tattoo artist in their booth at FINCON this year? OOOH, you should tweet them to have temporary tattoos . . . then send me one as I’m not going to make it this year. I’m imagining barbed wire with VTSAX . . .
Great job on the recognition–happy to be in the FI gang of losers!
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Barbed wire with VTSAX! Love it!
My takeaway is that you can write a bunch of books, but still fail to read the relevant research before you publish a hatchet job.
Basically, he operates under a misunderstanding: that you somehow don’t have your money in assets, but, rather, cash.
But hey, maybe you can start selling scammy $45,000 “courses”, get sued, and go bankrupt. Then you’ll be a real winner.
Done by Forty recently posted…Median Income, Middle Class
GOLD —>>> “But hey, maybe you can start selling scammy $45,000 “courses”, get sued, and go bankrupt. Then you’ll be a real winner.”
I used to attribute, “Be happy with what you’ve got” to Sheryl Crow.
Now I know it belongs to Epicurus. To wit, “Do not spoil what you have by desiring what you have not.”
“Do not spoil what you have by desiring what you have not.”
Wow, that’s a wonderful quote.
The value that Kiyosaki brings is that he gets folks to engage their brains and start to think differently. That can be a great starting place for a lifelong journey. His comments on your path highlights the fact that there is no “one size fits all” solution to this misunderstood state of being called Retirement. What works for him may be anathema to you, and vice versa. And that needs to be ok. There is more than one way to secure our futures (though I would bet a good bit that voluntary frugality – read avoiding hedonic adaptation – would play a role in each different way).
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That’s true, but there is no reason to call folks losers, even if it was just click-bait.
Anyone who pays $10,000 for a course in financial advice from Kiyosaki, by definition, does not have their brain engaged.
Carl you know you made it when… 🙂
Robert’s post is a bit of a click bait, he’s just stirring the pot. Using the word “loser” is a bit strong.
The thing with “early retirement” is that no one size fits all. It really depend on your personal situation. $1M might not be enough for some but it might be way more than enough for some people.
Did you know the whole Rich Dad, Poor Dad story is entirely made up?
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Yep, he fabricated the whole story. Crazy.
“The thing with “early retirement” is that no one size fits all.”
Yep. I’m really satisfied with where I am in life, so I don’t like Robert’s message. Keeping folks on the hedonic treadmill makes them buy courses though.
Money talks I guess. He wants to sell his courses.
So he will continue delivering messages with his own agenda.
Tawcan recently posted…Don’t look back in 10 years and regret that you’ve done nothing with your life
Great post! I read “Rich Dad Poor Dad” in my 20’s, but we did not really start building wealth until my husband starting reading My Money Mustache in our 30’s. I am happier and wealthier now reading FI blogs (MMM, 1500 Days, Frugalwoods) and listening to the Mad Fientist podcast than I would be been following “Rich Dad Poor Dad”. The VTSAX tattoo is temping, but I’ll keep saving our money. (I am assuming that tattoos can get expensive.)
Does Amazon have a “Home Tattoo Kit?” What could possibly go wrong?
I mean, I would LOVE to be an entrepreneur, but right now I don’t have the money to invest in a business. To get there will require… dum dum dummmmmm… saving.
Everybody has their own path, and it’s not appropriate for anyone to judge anyone else. We all have the potential to do better. Moreover, none of us is financially infallible.
Never read his book, maybe because I’m not a father and the title never appealed to me.
He got a couple other things wrong. I’ve heard people make blanket statements like “You need X dollars to retire”, saying “$1 million isn’t enough” is essentially saying the same thing. It’s crap, everyone’s financial situation is different. There is no “fool-proof” retirement plan technically. He didn’t do his homework to know you are still working and earning some amount of cash, it’s just in an area you have more passion for and it’s not as stable of income I assume.
And what do any of those arguments have to do with spending or saving money??? So he says you should spend your money on your business or invest in cash flowing assets. Well I wouldn’t call that spending, I’d call that investing, and uhh… what does he think we’re doing with our savings lol. Is this a joke?
As far as the 4% rule that might not work at some point in the future, my thoughts are basically if some catastrophic event happened where the economy completely collapses and the 4% rule doesn’t work. We would be screwed, it doesn’t matter how much you’ve saved, we’re talking about a meltdown of the economy, your dollars are probably worthless either way if everything went that bad. We plan for likely struggles along the way, we can’t plan for infinite unlikely events. Also, it’s been shown that generally people in retirement find their expenses go down over time, not up. You would have one expensive unlucky health issue to get de-railed.
It sucks because this guy has had an impact on the personal finance world, but you can tell he’s obsessed with earning more and more money, and that’s a known psychological recipe for unhappiness.
Yeah, he’s supposedly worth $80,000,000. If I’m worth that kind of cash, I’m not going around the country trying to pry more from peoples’ wallets. Hell, I wouldn’t even do it if I had $1,900,000!
$5,000 is all I’d need to get VTSAX tattooed on me!
Anywhere?
Total clickbait on Kiyosaki’s part. He’s a shyster and deserves to be called out.
I’ve read a few of his books, and it’s total “get rich quick” nonsense. Typical financial guru stuff. The reality is he made his money selling books and overpriced investing seminars to gullible people.
He’ll criticize any investment methodology that doesn’t match what he’s selling.
Take the high-road Carl. Don’t stoop to his level. Anyone who needs to call others a ‘loser’ to sell more of his books isn’t worth a minute of your time.
Mr. Tako recently posted…The Loser Industries
+1 on Mr Tako’s comment.
Rich Dad Poor Dad was an ok book in that it taught people to understand the difference between assets and liabilities. Haven’t read his other books but from what I’ve seen they are redundant and just an attempt to capitalize on his one real success.
I wouldn’t use Kiyosaki as a “role model” for financial independence. Lots of the stuff he peddles feels unethical.
Stockbeard recently posted…We have to learn to be frugal again
Getting mentioned like that is proof you’re no loser at all.
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Thanks Edwin! 🙂
I like how he used you as an example, even included a couple of quotations, but doesn’t actually link to your site. Hmm…
In the end, people can think whatever the hell they want to think. If he thinks your plan isn’t full-proof with your net worth, he’ll DEFINITELY think I’m a flaming idiot by retiring at 35 with only about $930,000 in the bank. But – and this is a huge determining factor in being successful at stuff that isn’t considered “normal”: I just don’t care.
Flexibility is key when you’re retiring early. If you’re flexible, early retirement will work just fine…I don’t care what the market does, or inflation, or any other nonsensical scare tactic that *anyone* tries to feed us. Is it possible that we might fail? Sure. But, I’d much rather try early retirement and fail than spend the next 25 years of my life working a job that I don’t enjoy, just to pad my bank account.
There’s too much life to live.
I’m honored and proud to be one of those losers.
Steve @ Think Save Retire recently posted…You know you’re ready to retire early if…
I know right? Call me a loser any day of the week.
I believe it is just a choice of how you would live your life. Living on $30k a year does not make you unhappy. Living on $1M does not mean you are happy. For a $1.5M portfolio, at 3% of dividend payout without any capital gain (assuming no increase in stock value at all), you can easily maintain $45k annual spending to break even. That is even without touching the nest egg.
I’d wanted to believe the FI world (which I’ve found to be more full of endearing nerds excited to grab a beer than Tupac/Biggie level rivalries looking to establish dominance) is immune from such nonsense, but alas…you’ve illustrated our shortcomings as human beings a la “Lord of the Flies.”
There was always one kid in every honors high school class who immediately asked you what you got on the test and got flustered if they scored lower. For them it was about keeping score, not learning. You always hoped they’d come around, but you never let their distorted motives detract from your learning.
Keep your chin up. No need for you to worship at Kiyosaki’s bully pulpit, however disappointing his name-calling may be.
Fondly,
CD
Fellow nerds, that is!
-CD
I think this guy has turned into a crack pot. Just my two cents. He has been giving bad advice and when I saw his name associated with crap investment products on late night, I knew he jumped the shark.
It’s a shame. Supposedly he’s worth $80,000,000. Why does he associate himself with this stuff?
I’m sure it stung a little, at first, but you must feel some satisfaction knowing that what you’ve accomplished has gained Robert’s attention.
You’re absolutely right. Robert doesn’t get it. He probably doesn’t realize or care that successful PF bloggers actually continue to earn more (sometimes significantly more) after FIRE. You’ve chosen to escape the trap that so many of us are stuck in and can now pursue what’s important to you.
Congrats!
Oh damn, shots fired! Eh, everyone has their opinion. You can’t predict the future, and that includes what our economy is going to look like. I know many people don’t like the 4% rule, but it does work for some.
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I never understood the inflation concern. Unless you have your money under a mattress or 70%+ in cds, then your investments would actually benefit from inflation. When inflation occurs, your stock price isn’t going to stay at where it is.
Look at how fast you went from 1 million to closer to 2 million. I personally like the tax benefits of real estate hope to diversify more that way in the future. Robots can’t exactly replace people needing to sleep somewhere !
Exactly! Everything moves in lockstep.
And yeah, real estate is a wonderful asset class!
The 4% rule does indeed take inflation into account. But even if it didn’t I would not be worried. In my experience stuff gets cheaper over time. Sure, the new iphone might be more expensive than the previous one but a basic smartphone has never been cheaper. Food is the same. Basic food has never been cheaper. Yes, the latest and ‘greatest’ tasting new product that company X is making heaps of advertising for will probably be a bit more expensive than the previous ‘greatest’ product of that company. But basic food? Basic clothes, basic cars? Never been cheaper compared to the average wage people are making now. It is not only cheaper, often the quality has improved as well.
Ps; I am actually in all seriousness contemplating a BRK.A tattoo
Great point!
The one thing that goes up is real estate, but I own my home. If I was worried about rents, I’d consider a cheaper place to live, maybe even another country.
Wow to be named by Kiyosaki means you have hit the big time. However, I think his analysis is bunga. Partly because he assumes that you will never make another dime. His article suggests that you are going to play shuffleboard all day or travel the world and out spend yourself. Not going to happen. Moreover, when your kids are out of school you could always sell the house and move to Mexico, the Caribbean, parts of Europe, etc where civilization exists and live like kings. I am not a big fan of his anyway, but he is out in left field on this one.
Ah, the hubris of youth and an exuberant market. I was once as naive and cock-sure. Those were the days!
The next market crash will see half of the FIRE crowd back at work. Enjoy while it lasts.
I don’t think so. We’re not a stupid bunch. Many of us are diversified in real estate. We’re also a frugal bunch who don’t need lots of money to be happy.
And you’re quick to throw daggers, but what’s your story?
That comment reminds me of something a former boss once said to me. I was just out of college and reading my first or second personal finance book called, “Getting Loaded”. The premise was if you can save a dollar a day and earn 8% after 40 years you’d have a million…not exactly FIRE but that book gets credit for getting my head in the right spot right out of the gates. Bossman said, “Good luck with that” but not in a positive way, more like this guy…in a blah blah it’s not even worth trying kinda way.
Fast forward about 15 years later and I’m on the home stretch to a comfortable retirement from corporate America somewhere between 40-45 and he’s rotting away as an unhappy middle manager who will probably work until 70. It’s a self-fulfilling prophecy, whether you think you can or you think you can’t, you’re right.
But I will say I am interested to see how the FIRE community and bloggers react to the next downturn. There’s a difference between teaching and doing. He is right in that sense, it will be time to put the money where the mouths are and put all this theory to the test!
“But I will say I am interested to see how the FIRE community and bloggers react to the next downturn.”
Me too! Almost everyone has been blogging/planning/plotting since the last recession. Since then, we’ve had a humongous market run. As Buffett is fond of saying, we’ll see who’s wearing swimsuits when the tide goes out!
Mr 1500 I saw Robert Kiyosaki speak in London and he was calling savers losers years ago! He laughed at the people that lost all their pension money in 2008 and was generally obnoxious.
I agree I loved his books and he has had a massive impact on my behaviour and thinking but comments like this make my blood boil!
Savers are losers. If they have all their money in savings accounts being outpaced by inflation alone. Readers of this and other similar blogs are spending money on passive income to retire early. Bad publicity is publicity.
I was always suspicious of Kiyosaki. I resented that he called his father poor–his father was chief educator in Hawaii, and I doubt he was paid the minimum wage–and I resented that he never named his supposed “rich” dad. If someone were that influential in my life, I would surely pay him proper homage. Anyway, I’m a loser too. So far this year my portfolio is up $125K and my spending is less than $24K. How will I possibly survive? Thanks for pointing out Kiyosaki’s dubious financial advice. I really appreciate it.
You have to consider the source. It is easy to see how a guy worth $80 Million cannot understand living on $30,000 per year. Plus he went broke more than once so he probably will never feel he has enough to be safe. As a guy who made well up into the six figures of compensation range I wasn’t comfortable retiring until my portfolio could throw off over $100k and even with that I still feel better and more secure if I earn most or all of my expenses with side gigs. But I’m closer to RK’s age than you are so maybe it is partly generational.
There is only one thing in life worse than being talked about, and that is not being talked about.
Congrats on the mention. I read a story about him that the rich dad and poor dad characters were not real people. They were made up characters to be used to promote a pyramid scheme. In other words, it is fiction like Game of Thrones. I have not read any of his books, so I cannot comment on them. After I heard that about his writing, I kinda just saw him as a “get rich in real estate with no money down” pitch man.
Yeah, it was pretty disappointing that he made the whole thing up. I remember being inspired by the book, but that was a while ago.
I have seen the same. There are a few great “mindset” pieces to his book. But just like The Secret or Think and Grow Rich, the book is more about inspiring people (and selling books) than actually providing practical advice that can be implemented.
I’m so glad I came across your article! To be mentioned by Rich Dad Poor Dad is phenomenal. And to be called out by him, all the better! lol.
I too, enjoy Robert’s books (and read several in high school). However, I’ve noticed that he’s really just another one of those guys who have gotten rich by revealing the “secrets” of getting rich. And I think that’s the big difference between PF bloggers and “get rich” bloggers/authors. PF bloggers provide small practical steps that anyone can apply, vs the mindset/dream that get rich writers promote (which is hard for all but a few to actually apply).
Anyway, congrats again on being called out — that makes you a hero. And keep up the hustling, we all know that PF blogging can quite easily turn into a full-time income of it’s own accord.
Guess who’s the real loser? Kiyosaki has been losing money on opportunity costs by buying precious metals, while the S&P is going through the roof. He somehow thinks that the U.S. economy will collapse in the near future. If that ever that happens though, water, bullets, and guns will be more valuable than gold and silver.
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Funny that you should mention VTSAX tattoos…
I was just telling my wife last night that VTSAX should be our next license plate – dibs in Missouri! Haha definitely not the same thing as a tattoo, but proud enough to display it!
I also just read your post “Getting Naked in the Costco Parking Lot,” hope you’re still enjoying your NSX! I’m hoping the VTSAX will go on our next car… hopefully a Tesla Model 3! Maybe I can find a used one in a year or two…
While I find myself agreeing with Kiyosaki occasionally, keep in mind the man is a charlatan who’s business is selling “get rich” books and seminars. Mind you, I’d trade my job for his, but the only thing he’s qualified to speak on is how to fleece people into handing over their money by selling them an illusion that they, too, can be rich by using made up stories and tired tropes.
Were I you, I would actively try to start a public debate with Kiyosaki. Free publicity…
I’m outraged. I’m so upset I may just have to start a podcast where I interview you and Robert together and get to the bottom of this issue. Are you in?
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