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Chapter 3 Notes
Robert's Topics > Chapter 3 Notes > The Name of the Game is Debt
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Robert - 3/12/2009 5:24:30 AM
The Name of the Game is Debt
In Chapter 3, I mention debt and foreclosure. I personally feel sorry for these people facing foreclosure but I really think bailing them out is not the answer. I have been in a position where I have lost my possessions....but I view these losses as lessons. What are your thoughts?
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arleankelley - 3/12/2009 10:22:03 AM
Consequences of mistakes and benefits of crisis
I am age 71 and the worst crises in my life have taught me the most important things. Although it was horrible at the time, I would not give up those experiences today because of the benefits. They changed me and contributed something valuable to my life. Also, if we don´t learn important lessons any other way, consequences teach us what nothing else will. Usually it is damaging to people to rescue them from well-earned consequences. I see parents do this with their adult children and I always feel sad for the children of such foolish parents.
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lehmachr - 3/12/2009 11:14:01 AM
Foreclosure
And the same goes for GM and AIG. We just have to wear the pain of killing those suckers and cleaning out the system. We can only avoid reality for so long, ultimately the pain will be felt ... maybe much much worse later on.
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salakazam - 3/12/2009 11:19:33 AM
I agree
Hello Mr. Kiyosaki,

I'm totally agree with you, I'm from Spain (living there too), and nobody seem learn nothing about this situation. Everybody is waiting our governments bail them out. Nobody assume his responsibilities (like have more than 75% of two wage -in an average family- in debt -one or more houses, two or more cars, etc.), and the government messages is "don't fear, we are here for pay all your debts" (which is false, only politics propaganda). Meanwhile we are walking to 20% unemployed ratio, 25% of them without unemployment benefit. The point is nobody learn nothing because they are longtime alienate by poor education, poor enterprise spirit an non existing financial education.

I'm 35 years old and only begin mi financial educations few years ago by myself, because I suffered our education system. Only a beginner in this subjects, but not in the above situation of mi compatriots (I like think is because, in any way, I take correct choices).

Is an honor to read you and have this way to share thoughts. Thanks for your work and your books. Sorry for mi english.
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tnoel - 3/12/2009 11:27:38 AM
Learning from your losses
Robert,

I agree completely. After taking your Rich Dad Real Estate Coaching course, I invested in my first property. It was a good deal--or so it seemed. Just about the time my first tenants had to be evicted, the housing market locked up. Ouch. But your advice stuck with me. Every time you solve a money problem, you increase your ability to solve bigger ones. I still have that property even though I am under water and in negative cash flow. Why? Because I refuse to blame others, I have grown and am more excited than ever about real estate investing. I thank my lucky stars that my first deal was a "problem" deal.

Terry
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jmtcoffee - 3/12/2009 11:51:21 AM
lessons need to be learned
I don't think they should be bailed out either - they made the decision to get into debt and no one 'made' them do it. Just because poisonous fruit looks good - does not mean you should eat it. Every decision we make has a consequence. If we continue to teach people that they can keep making poor decisions and that there is always a way out, then they will not learn. I had to declare bankruptcy once, it was hard and painful, but I learned from it and appreciate the decisions I make. Let them lose and learn.
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MNH - 3/12/2009 12:40:07 PM
Bailing out the public
Hi Robert,

I agree that bailing out people will not help them in the long run. In the short run it may save them from losing their home and their possessions but will not provide them with the skills and knowledge they need to prevent future financial devastation in their lives. Having said that, what will happen to society if we now have huge numbers of people without homes, without credit and without a paycheck, many whom are heading towards bankruptcy? How do we deal with this inevitable problem? What are the short term answers to this? Consider the tent city in Sacremento California. Will these tent cities become the way our society deals with personal economic chaos and strife?

Obviously if we're not going to bail out people we need a support systsem in place to help individuals bail themselves out. I am referring to teaching people how to correct these mistakes and to prevent them from happening again. Financial literacy is the key but won't happen overnight. We need a network of organizations that can teach people the basics starting with budgeting and repair of credit, various ways to build income streams--give them a business/investing education. It's the only way.
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Bob - 3/12/2009 12:47:55 PM
Consequences
One of the reasons we are in this mess is people seem, in general to feel they are not responsable for their own mistakes. Instead of using the formula, make a mistake, accept responsability, learn and continue without repeating same mistake, many are using the formula: Make mistakes, blame others out of ignorance, get mad, repeat mistake.

Lack of understanding of the mistakes made and repeated for years is contributing to the problems. Us common folk just never learned about monopoly money system in time.......I see a major downside still to come.

While in college, I used to look for short cuts to learn, then made a big mistake and go caught cheating on two tests within a week senior year. Graduation in jeporday...greatest single lesson of my life because I only blamed myself and the poor choice. Lesson learned, NOT repeated and learning became a mission. Avoid past mistakes. I still repeat mistakes at times, though now each repeat is more painful and I seek to eliminate it.
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Geolucky - 3/12/2009 12:53:15 PM
Foreclosure
It appears that I am the contra voice in this discussion. With the government busy bailing out large companies it seems rather Draconian to penalize the average homebuyer. Even more important is the question of predatory loans. Many individuals counted on the government to keep the field level and they didn't. This is the same as saying to a crime victim, you deserved what happened, and there is nothing we can do about it.

One last thought, foreclosures are a hidden form of wealth distribution, because the market knows that real estate values will rise pushing the total value of the transfer even higher. There is an industry built up around buying foreclosed property where the properties are either resold for a profit or held for the inevitable increase in value.
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Harry Mete - 3/12/2009 1:00:24 PM
Teach a man to fish with a big net
I think everyone needs to learn to avoid extravagance and living outside their means. If that lesson requires them to lose their homes, so be it.

I once lived in a tent for 3 weeks because I had no where to live and I hadn't organized my life properly. It was a very sobering experience and a bargain in the end.

People can only truly learn about bad debt when they start to lose their possessions and that's when they are ready to be financially educated.
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