THE CONSPIRACY OF THE RICH; A BLOGGER’S PERSONAL REVIEW

For those who don’t know, Robert Kiyosaki (of Rich Dad Poor Dad) has written and published another book that is called the conspiracy of the rich. It is available for sale at amazon.com and it is on the New York Times best seller list. Before it was published, I had the chance to read it for free as he was giving it away chapter by chapter as an online interactive book. (How’s that for a money hack?)

(By the way this is no affiliate program, just a personal opinion of a personal finance book).

In not so many words, the book covers the recession, some of the history of the world vis-à-vis money and true to himself, how to beat the game and become very rich. This last thing he does by giving tips for investing in the stock market, real estate, gold and other things.

I found it very interesting and educative. To say the truth, it is how I came to understand what the recession was all about. My head was just reeling around as I listened to the news but after reading the book, I understood what was happening, to some extent anyways.

Basically, the book is in two parts with the first part having five chapters and the second having seven chapters.

In the first part, he goes into a brief history about money and how it is connected with the recession. But the pith of the book is dedicated to “the new rules of money” that this recession has heralded. This is what I am going to concentrate on.

OLD RULE- save money, NEW RULE- spend money. This change has been brought about by compounding inflation and thus one must increase his/her financial education to spend (read invest) in ways that will make you richer.

OLD RULE- diversify your investment portfolio, NEW RULE- focus and specialize. This change is put forth partly by a statement that Warren Buffett said- “wide diversification is for investors who don’t know what they are doing”. Instead one should learn a few types of investment very well and invest in them. This is in accordance his argument that savers are losers.

NEW RULE- money is knowledge. Here he says that you do not need money to make money, you just need to know the right things. The example given is the ability of making money by selling stock that you don’t own i.e. shorting stock and pocketing the difference (details are in the book).

NEW RULE: learn how to use debt. Here he says that there is a way to use debt to get rich-the good debt like a loan for an investment and avoid bad debts like using credit cards to buy televisions. I found this as another sensational way of saying that one should be frugal and a good money manager.

NEW RULE: learn how to control cash flow. According to him, this is done by being very informed by the global flow of money, jobs and people so as to make wise investment decisions based on this information. (This seems to make sense to me).

NEW RULE; prepare for bad times and you will only know good times. Robert says that everybody should act as if the worst is not over and constantly live as if the sky is falling. In preparing for the worst, a person will see better times. For instance, if one prepares for an inflationary depression that never happens, it means that later on your money will have a greater value, means that you will be richer.

NEW RULE- the need for speed. I know it sounds like the racing computer game but what he is really talking about is looking for ways to do more business in a shorter time to a larger audience, as in using the internet to transact business. This is aimed to make more money than the banks are printing (this is also covered in depth in the book).

NEW RULE- learn the language of money. Robert says this is to be done by getting to know the financial terms and investments available and being able to understand financial speak on tv and websites and in the papers etc. it  is much easier to grow wealth if you know what you are doing instead of gambling away hard earned cash in hot tips.

NEW RULE- focus less on buying and more on selling. In other words, he is advising people to look for their entrepreneurship spirit to get financial independence and control the amount of cash that you spend. This means that more money will be coming in than going out to enrich others and thus you grow richer.

NEW RULE- life is a team sport. Choose your team carefully. He proposes this according to the advice in his other book, rich dad’s guide to investing, mostly the BI triangle. He says that the worst is not over and everybody should start preparing his/ her financial team together. He neglects to show people exactly how to do this but he gives the example of his own financial team. While I am not so sure about how to go about this, it seems like logical advice to have a team in your investing endeavors.

NEW RULE- Since money is becoming worth-less and less, learn to print your own. I know this sounds like the felony of counterfeiting but there is a point that he seems to put across in this second last chapter. In stocks he says to use options, in gold and silver, he says to build and gold and silver mines and sell the shares in the stock market(again, he does not go into detail on exactly how to do this).

Basically these are the new rules of money that the recession has brought forth. While this is the most prominent part of the book there is also a lot of information like capitalism and socialism, things about the Federal Reserve, economic depressions, interesting timelines, “frugality being the new cool” and a large wealth of information but I chose to get into the rules of money as this is what really fascinated me. There are also issues he calls financial fairytales. These are common misconceptions that the average investor has been living with. The setting of the book is(was?) in the global recession and so there is a lot of reference to what was going on at the time the book was being written like the Bernard maddoff ponzi scheme, the bailouts, the presidential election etc. there also quite a lot of reference to his other books like rich dad poor dad and rich dad’s guide to investing.

I found this book somewhat useful to read as there are a lot of things that I learnt about finances. Has anyone read this book? What do you think of it??

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