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Chapter 3 Notes
Robert's Topics > Chapter 3 Notes > The Name of the Game is Debt
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Linda Garises - 3/16/2009 7:39:33 AM
Losses as lessons
Yes Robert I also view losses as lessons especially after reading your books including "Rich Dad Poor Dad". I have two examples but I'll discuss the one I experienced after reading your books. I was selling sum stuff and the stuff was selling very well because it was something that was scarce around my area and it was very expensive in the shops and with limited range. Towards X-Mas a lot of people put more orders with intention to buy for their families as well but I brought something new in bulk than the original product thinking that's what the people would need more at X-Mas time than the initial product. To my surprise I failed, the new product had less than 10% sales and people were looking for the initial product and were disappointed not to find it and that left us bankrupt, at the time that we wanted and needed money more than before. But I remembered your words that the practical part of the business is where you get your lessons and I remembered when you said "Diversify - Diversify" is most of the time not financially wise and how you unpacked the word "Focus" - F- focus, O- on one C-course, U-until, S-successful.So I learnt a lesson and now I am keeping focussed on my initial products as long as they are still in demand and I'll then slowly diversify when I have enough money to take the risks and losses accompanied with diversification. So, Yes I have decided to treat my losses as lessons, thanks to the empowerment of your books and I do believe that that's the positive thinking one needs in order to continue with your business.
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rbcrandall - 3/16/2009 12:24:23 PM
bailout
I agree, a life lesson, if each falls under the same standard. Bailout all or none.
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mbyoung25 - 3/16/2009 1:54:55 PM
Foreclosures
I think that people who took loans based on information by the bank to tell them what they could afford instead of knowing it before hand need to learn a lesson about their finances. That they are in charge not the bank. Maybe they won't be so quick to allow others to tell them about their own financial situations next time.
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emerjenc - 3/16/2009 3:15:08 PM
Bankruptcy
When I first got a credit card, I went out and bought a ton of "stuff": new snowboard, van (yes, drew out money and bought it second hand), clothes. Then I drove around all winter snowboarding in the West. It was great - but $13k later, my choices hit home. It took me about 5-6 years to pay off that debt - riding my bike to work, having $20 of spending money (entertainment) per week, never eating out or buying anything extra - and working all the while 40 hours a week. It sucked. However, a close friend ran up similar debt the exact same time I did - and he chose bankruptcy. He tried to convince me that it was a really good way to get the debt off your back - but I just couldn't do it. I actually had fun living so frugally, and learned one of the best lessons of my life. I'LL NEVER DO THAT AGAIN. It was painful. I understand credit now. I understand the "pain" of buying things on credit. And I realize what is within my budget - that's why I bought a $113k home 6 years ago when all of my friends were buying homes at $300-600k. Sure theirs looked good - but I still own mine :)
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drmbear - 3/16/2009 4:24:29 PM
There's Always Been A Bailout Available...
I just don't think the government should be doing much to get in the middle of it. There are trained and knowledgable real estate entrepreneurs that want to solve real estate problems and are able to do so. If some of the states that have been creating new laws restricting how ethical investors can help homeowners in foreclosure, even keeping them from talking with these homeowners, would get out of the way of free enterprise then I think there would be little problems. If anything, all the government should be doing is educating homeowners about their options and the things to be on the lookout for with regard to fraud, etc.

Twenty-one day foreclosure timelines do no one any good, so I think communication with the public has to be soon enough so that the marketplace can responde to solve the problem. that would be a good "bailout" initiative that would cost nothing.

Finally, when the market has dropped as far as it has, banks need to be willing to respond, by re-negotiating loans and terms, by accepting reasonable short-sale offers once negotiated, and by finding ways to continue lending money.

The market will solve problems - that is what entrepreneurs do. As a preforeclosure investor, I worked with homeowners whether they wanted to keep their home or sell their home. I explained to them all their options. If they really cannot afford the house they are in, very often I would have a house they can more reasonably afford. Through negotiation or whatever it takes, the burden and huge liability that affected the homeowner is removed and converted to an asset for me the investor. The homeowner is able to move into a more reasonable and secure situation for themselves. The original lender rarely gets nothing, and instead gets a fair amount based on real value in the current market.

If the laws would get out of the way of letting all that happen, then it would be a bailout plan that would cost nothing extra from the taxpayer.

Craig Cherry
DreamingBearHomeSolutions.com
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jiles - 3/16/2009 4:56:41 PM
Elitism - Herukhuti please research your use of language
Just a note on the word elitism, so speak about it as if it was a bad thing?! Research the etymology (history and origin of a word) and you will find that it means to choose. I take that to mean that ability to choose to educate myself, the ability to choose to go the best schools, hang out with the best people, read the best books. If I read your post correctly you believe that "elitists" are out to get you and hurt you and make you suffer?

I am an elitist because I choose what is best for myself and my family and my career.
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Gary Wilson - 3/16/2009 9:35:34 PM
Lessons
If we are not taught in the educational system and we do not learn at home then we are forced to learn by foreclosure. School of hard knocks is never discussed anymore. Many of us need to attend. Be part of the solution by sharing education in and around your family or continue to be part of a growing problem.

Gary
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Monica Morton - 3/17/2009 12:02:11 AM
Don't help out people who are facing foreclosure
My husband and I were forced to file Chapter 13 Bankruptcy in 1999. That was when the Bankruptcy laws were still favorable to the borrower and not to the lenders. No one helped us out. I remember looking around me and thinking, where is everyone else's money coming from? My husband and I both had collage degrees from well known Universities and still couldn't keep up with the life style everyone else was keeping. That's when I read "Rich Dad Poor Dad" and my father and I began buying old mobile homes and old mobile home parks. We remodeled both and turned them into cash flowing assets. My husband got into medical sales as a distributor and built his own business. The point is we survived, we picked ourselves up out of financial disaster. My husband and I both learned a lot from the experience and that is why we are doing so well now, during this time of crisis. So no, I agree do not help the people out who are facing foreclosure. They can over come this just like we did.
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terrynic - 3/17/2009 1:57:28 AM
Lessons From Losses
I too, have faced losses as a result of my decisions and actions. To dwell on them and feel sorry for myself is not productive. To repeat the same mistake in a future scenario (expecting a different result) is insanity. But to learn, and apply the lessons of the loss are invaluable.

But there is another aspect of the process. To learn from some one elses losses. That is why really pursuing financial education from those who have been burnt can prevent my busines ventures from being torched.

When people hear what I spent on my Rich Dad education, their eyebrows go up and they get silent. I know they are thinking, "Thats a lot of money.." But, I believe that I have saved 10 times that amount by NOT making the mistakes that my instuctors and mentors made and warned me about!

There is value in lessons learned from personal failure... But it is much cheaper to pay currency (and NOT pain) to learn from others mistakes.
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LMRouge1985 - 3/17/2009 3:02:34 AM
Life's Lessons
I couldn't agree more. Too many Americans have become complacent and lazy. They view the government as their "daddy" at times. They get themselves into trouble and want "daddy" to bail them out and make it better. This is the very reason we are being controlled more than we want to be. If it continues, we will be even more controlled (socialism). I agree that it behooves all of us when we are forced to learn from our mistakes. After all, we always learn the most from our mistakes. We would be a much stronger country if people would be held more accountable for their successes and failures. Thanks to people like you, the answers are there. We are, after all, in the information world. The fact is too many people don't want to "change" what they are doing.... but if it weren't for certain government bailouts, more people would be forced to change.
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