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Are Famous Personal Finance Authors Too Rich To Understand You?

January 17th, 2012

Today I’m going to question the unquestionable in the personal finance world… “Are Famous Personal Finance Authors Too Rich To Understand You?”

So what do I mean by this question, especially considering that the larger personal finance authors have access to vast amounts of financial information!

Before I answer that question, let me first define “You“, in my question above!

By “You“, I’m talking about 80% of the population. We (80%) are the true middle class (middle lower, middle middle and middle upper). I’m excluding the top and bottom 10% of the population because often time they don’t read personal finance blogs anyway unless they are young and in a transitional phase of their economic life (ex. college students that are poor today because they don’t have a job, but will be making good money in the future).

With my definition of “You” out of the way, let’s continue with what I mean by my question “Are Famous Personal Finance Authors Too Rich To Understand You?”

When most of these authors were in the middle class, they lived like we live, ate what we ate, and had the same financial difficulties that we are currently encountering. They felt the same year end financial crunch, after buying holiday gifts and traveling. They were cubicle dwellers or worked for “the man” just like us. They watched how often they went out to fancy or really even modest chain restaurants like “Olive Garden”. They did this because they were us, and actually lived next door to us. They were us and walked the walk and talked the talk just like us!

That was then, but now they have moved on and are no long part of the 80%!

So even though many have our best interest in their hearts, they can no longer remember how we live when they were part of the middle class. Now they go to fancy, expensive restaurants, and they are use to being made over when they visit such establishments. I’m sure none of the large personal finance authors stay in a Holiday Inn Express, no matter how much smarter they could become by doing so! Most now have houses that are valued at more than a million dollars… easily, not to mention staff that take care of the house,the yard work, and even handling these rich author’s schedule… I know that personally, I don’t have anyone handling my schedule except me.

Don’t get me wrong, these authors were and are great people that I respect, but they no longer understand us (the middle classes). It’s like anything in life, you use (or live) it, or lose it, and some of the personal finance authors are no longer living it so they forget both our lifestyle and struggles.

Does this make them bad resources for personal finance information?

No, but they give out financial advice forgetting what it was like not having money. or they forget what it’s like living in the middle. They forget what it’s like not getting your child the latest popular gift (whether it’s a cell phone, Elmo whatever, or iAnything) and having your child looking like an outcast in school. Sometimes it irks me that they chastise us for not being more frugal when in reality they have no idea of our normal living expenses and what our social variables are, and some never will.

This is why I like to read certain financial bloggers that are similar to my middle class lifestyle, ones similar to me, or that have overcome the financial obstacles that I am struggling with, or are just exceptional bloggers in general.

What do you think? Do you think most famous and rich personal finance authors and personalities understand your struggles?

While I still listen to them in passing, I believe they are too rich to understand me! Perhaps when I’m rich someday, I’ll tune back into them more. In the meantime, I am going to find other paths that relate to me and my life in the middle…

If you are a new reader, expect interesting and different ideas on accumulating wealth and living a balanced life for those of us that aren’t rich yet!

MR

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Posted in Financial Heroes

Tags: middle class finances personal finance authors too rich to understand rich authors out of touch why a middle class blogger is better

The Paradox Called Warren Buffett

July 20th, 2011

As I’m struggling to come up with something to write about today (headaches do that to me), my mind drifted to Warren Buffett and the fact that he’s such a paradox in the investment (or business) world.

Warren Buffett and Bill Gates

In many ways Warren Buffett is like the old folklore hero John Henry. John Henry was a black man and the story goes that the railroads owners were replacing men like John with steam hammers. John Henry challenged the steam hammer machine to a contest and won, but immediately after winning the contest, he collapsed and died. He was a hero to the working men of that age!

Warren, much like John Henry, goes up against machines and special computer algorithms, but to date has fared well and continues to win the battle with the computer programs, and without dying at the end.

Another way Mr. Buffett is a paradox is that he’s a solid Democrat. Although raised a Republican, his wife converted him to the Democrat way. While I don’t entire agree with his political choice, I’m not necessarily a right-wing Republican either.

I do see a great paradox in that Warren being one of the richest men in the world is solidly in the Democrat camp. Doesn’t that kind of go against nature, or at least popular public perceptions of the extreme rich?

Another oddity is that Warren doesn’t use his computers as tools to help with his work, instead he uses it to play bridge with remote friends (like Bill Gates) and other games. But other than that, he doesn’t use computers for investing or business purposes… Tell me this isn’t a head scratcher!

Yes, in today’s society, Warren Buffett is the equivalent of seeing a real unicorn or Pegasus. Perhaps this is why lunch meetings with him go for millions of dollars on eBay each year.

Personally, I fix it interesting that his consumption habits (coke, cheeseburgers, etc), isn’t really far from the typical middle class style of eating. so here is one of the richest men in the world eating normal foods that I would eat when I go to lunch…

Can you think of other interesting paradoxes about Mr. Buffett, if so, please comment! We would love to hear them!

Thanks,

MR

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Posted in Financial Heroes

Tags: The enigma Warren Buffett The paradox warren buffett warren buffett Warren Buffett odd ways Warren Buffett oddities

Which Financial Author Should You Follow?

January 25th, 2011

Too often, we read financial advice in books from Dave Ramsey, David Bach, or Robert Kiyosaki and conclude that whatever they write, is the correct way for the reader. But is it?

Let’s look at Dave Ramsey.

First, let me say that I’m one of the rare financial bloggers that did not read any of Dave’s books. That said, I’ve read enough personal finance blogs to get the gist of what his approach is about. I believe for the most part, I like what Dave says. In fact, I paid off my mortgage early as he suggests. I don’t have any debt nor have I carried much either except for car and home loans at one time, but those have been paid off entire.

The target group the Dave has the most impact on and who should read his books are those that have debt (especially credit card debt) and are trying to dig themselves out, and the middle class/middle-income group. So if you are in this group, this book is a great read for this segment!

At the other extreme is Robert Kiyosaki!

Let’s Look At Robert Kiyosaki

Robert Kiyosaki take a more “do or die” approach and obviously takes a much more risky approach to finances. Is he wrong? No, but his message is primarily for the type A personality types that have a lot of confidence and aren’t afraid of failing.

I would guess that Robert’s approach only works for 10% of the population, and he doesn’t deny it. I think Robert’s approach only works for those that are young without families or those with a lot “Chutzpah“, but this is just my opinion.

And this leads me to David Bach

Let’s Look At David Bach

David target segment of the population overlaps primarily with Dave Ramsey, but also a little with Robert Kiyosaki too. I like David Bach’s approach because he preaches the frugality via “the latte factor” message, but also preaches investments via real estate and 401ks.

To me David Bach advice is much like the perfect portage that Goldilocks eats in the story “Goldilocks and the Three Bears“. But this is because his financial advice “shoe” fits my financial risk level tolerance the best.

Conclusion

So for me personally, my approach at (MoneyReasons.com) is more in line with David Bach’s approach. I’m debt free and my finances are automated. Now if I could just bring myself to follow his advice about lattes.

An example of a blogger that follow an approach more in line with Robert Kiyosaki wold be Adrian at 7year7million.com. According to this blogger, he’s followed aggressive techniques and they have word for him.

There are plenty of example of those that follow Dave Ramsey too. One such blogger is Jeff at Deliver Away Debt.

All take different but valid approaches for people of different risk tolerances. Which author do you most identify with?

-MR

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Posted in Financial Heroes

Tags: Dave Ramsey David Bach finances financial advice financial authors robert kiyosaki

Warren Buffett – Financial Hero #2

February 15th, 2010

Warren Buffett & Bill Gates in an unusual photo

Ever since I graduated from College, Warren Buffett has been my one of my financial heros (my first financial hero is Benjamin Franklin). He is the equivalent of a rock star in the financial world (a lunch with Warren has gone for over 1 million dollars on ebay).

Warren Buffett (aka The Oracle of Omaha) was born in 1930, and was the second of three children, and the only son of Leila and Howard Buffett. It’s interesting to note that Warren’s dad was in the investment business, so I’m sure Warren had exposure to the financial markets at a very young age at least in some way or another.

Warren was always an entrepreneur, even from a pre-teen age. Some of the business activities in Warren’s youth included selling gum and pop, paper boy, and a pinball leasing business. He filed his first income tax return around the age of 13, the reasons was to take a deduction for the use of his bike and a watch in his newspaper boy business.

Why should Warren Buffett be a hero to us, especially the frugal crowd?

The main reason is because Warren is one of the frugal crowd! Believe it or not, the man that could be the world’s richest man (Gates is suppose to be #1, but if you add up all their earnings over time, I believe Buffett is really the richest, but he gives a lot to charity), is frugal like us!

I believe Buffett is a guy that realized a long time ago that living large wasn’t going to make him any happier. Which is probably why his house looks like it might run $350,000 or less… which is nothing compared to Bill’s house valued at $174 million.

Why I like Warren:

He doesn’t flaunt his wealth and shares it with charities
He’s very witty and fun to listen to during interviews
He’s like the ultimate warrior in the stock market, nobody comes close to his record.
He’s made his investors rich.
He’s frugal.

I also like the following quotes by him:

“If at first you succeed, quit trying.”

I take this to mean if you find something that works, let it run, don’t continually try to make it better, it’s very much like that old saying “if it ain’t broke, don’t fix it”

The first rule is not to lose. The second rule is not to forget the first rule.

Lol, this rule reminds me of “Fight Club”… The first rule of fight club is don’t talk about fight club… The 2nd rule of fight club is “DON”T TALK ABOUT FIGHT CLUB”

Someone’s sitting in the shade today because someone planted a tree a long time ago.

This quote helps to reminds me that to help my kids financially, I have to start investing for them while they are young…

If you ever listen to Warren Buffett, right away you will notice his folksy charisma. He’s a guy that you could meet at a McDonalds and strike up a conversation about the weather (or anything). No wonder he is a superstar in America (and other countries too for that matter).

-MR

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Posted in Financial Heroes

Tags: financial hero warren buffett

Benjamin Franklin – Financial Hero

November 17th, 2009

My post today is about Benjamin Franklin (this sentence kind of reminds me of the start of a school speech, heh heh).

Benjamin Franklin

While he did provide some excellent financial advice in his “Poor Richards Almanac”, Benjamin Fraklin is my top financial hero for the following reasons:

List of reasons why Benjamin Franklin is my top financial hero:

Benjamin was born into a working class family and where he was the 15th out of 17 children.
He went thru a few different apprenticeships before settling on the printing profession! Originally, he was destined for the church, then he had a short apprenticeship as a candlemaker (with his dad), but he didn’t like that. As a Printer, he ran way from his first apprenticeship (it was to his older brother James). The printing business was a business that Benjamin had great passion about. There are stories of how he submitted stories to his brother James newspaper, under the penname of Mrs. Silence Dogood. Using Mrs. Silence Dogood, he achieved this first brush of anonymous fame.
He only have 2 years of formal schooling (not that this was uncommon for the time…) He actually said in his autobiography, that he failed at arithmetic. But grammar was his passion and strong point. Benjamin was self educated, but also got a lot of education from his father (who was also self educated).
Ben, later worked on his short falling and other deficiencies. Ben later at age 16 went back and self taught himself arithmetic, and geometry too.
Benjamin, wasn’t a perfect kid. Apparently according to his autobiography, he got into a small amount of mischief. Luckily, he grew out of this… or did he?
Benjamin was a do-it-yourselfer. Apparently, his dad took him to see other workers, in an attempt to find an apprenticeship that Ben would like. A side effect of this activity, was that Ben could fix small jobs himself. He also developed an appreciation for the other working men of that time.
He treated other equally, no matter how much wealth they had. As Ben became rich from his business, he still treated all people with respect and would hold conversation with them in addition to the more literate in his society.
Benjamin worked hard and became rich thru this own efforts and his ability to make people believe in him. Being brilliant isn’t enough to be successful at a profession. Both Warren Buffett and Bill Gates (the 2 rich men in the world), display the diverse skills that Ben first displayed way back then. Ben got investors to invest in his Printing business, just like Warren and Bill Gates did in their beginnings.
At age 21, Ben organized a social meeting group called Junto! This was a diverse group of individual that would meet every Friday evening in an attempt to better themselves and society. The group was also called “Leather Apron Club”. I think this would be pretty cool to have today. Although with blogging, you kind of get that today albeit in a different form.
Ben did things differently. He believe in equal right for women (controversial for the day), lifted weights (when he was younger, I’ve never hear of someone back then doing this activity), swimming, scientist, etc.
Ben was an expert at seeing opportunities, and creating opportunities at work.

Ben didn’t get rich with his inventions (at least not the ones we are familiar with). He really only get heavily involved with investion after he retire at 42. And at that point, he was extremely rich.

The thing that impresses me the most about Mr. Franklin, was his tenacity… If you read his story, it’s a story of overcoming problems to become extremely wealthy, and quite literally helping to create our country as it is today.

I attribute much of Ben’s success to his parents, and the way his father tried to find Ben an apprenticeship that Ben would be content with. Most kids back then didn’t get that luxury. Apparently, his dad also was respected, and people would ofter stop by and ask Ben’s dad for advice. Luckily Ben was permitted to listen in on these conversations.

Anyway, this is why Ben is my financial hero. If you get the chance, listen or read his autobiography, and any other book on him.

Wiki on Benjamin Franklin

Click here for a unusual Franklin Trivia link

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Posted in Financial Heroes

Tags: benjamin franklin financial hero