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encsteph

New Contributor
Nov 27, 2007
30
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Southern New Jersey
Hello all,

I'm currently reading the book and in it he talks about his Rich Dad telling him to go to a financial planner and putting together three different financial plans:

1. To be secure
2. To be comfortable
3. To be rich

I haven't finished reading the book but I'm a little confused on what the difference's are, how to talk to a financial planner about them and what the contents of each should be.

Could any of you help me out and maybe clear up some of my confusion?


Thanks in advance.

Eric
 

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yveskleinsky

Bronze Contributor
Speedway Pass
Jul 26, 2007
2,233
498
192
42
Hello all,

I'm currently reading the book and in it he talks about his Rich Dad telling him to go to a financial planner and putting together three different financial plans:

1. To be secure
2. To be comfortable
3. To be rich

I haven't finished reading the book but I'm a little confused on what the difference's are, how to talk to a financial planner about them and what the contents of each should be.

Could any of you help me out and maybe clear up some of my confusion?


Thanks in advance.

Eric
I find it interesting that Kiyosaki would recommend a financial planner, as the crux of his teachings are on self-education and not relying on someone else to handle your money.
Knowing what you are doing with your money is very solid advice. Don't rely on someone else (especially someone who works on commission) to tell you what to do with your money. Guidance, maybe- but not 100% control- if you don't understand the direction.
As far as the different plans go- the goal you have will determine the plan you need to get there. For example, if your goal is to be secure, you might go with CDs or savings bonds. (No risk) To be comfortable you might go with blue chip stocks, mutual funds, some rental properties (low to medium risk). To be rich, you would need to be more aggressive with your time and money and how you are investing it- either through RE, business or stocks.

Hope that helps.
 

andviv

Gold Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
Summit Attendee
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Jul 27, 2007
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If you are done with that section you will notice that RK suggest that you define what each of the plans mean for you.

What would make you feel 'secure' financially?
What would make you feel 'comfortable' financially?
What would make you feel rich?

After you define this, you then start looking for advisers that can give you some guidance on how to accomplish each of those milestones.

For example, to be financially secure you may need to have a minimum monthly income to support your life. If you have family and they depend on you for financial reasons then probably life insurance should be part of your plan; you may need a 401(k) or pension plan in place for your older days; you may want to pay off your mortgage so you don't have any more payments; you may want to have no car payments for the same reason. So, if these are your goals in your 'secure' plan then you can now go to a financial planner to help you find ways to reach them.

And then you do the same for the other two plans.

Yes, a lot of work, and a lot of soul-searching in the process, as you need to define what Secure, Comfortable and Rich mean FOR YOU.

By the way, this is RK's best book, in my opinion.
 

White8

Contributor
Dec 6, 2007
272
46
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48
Salem, OR
I would definitely do my own research rather than rely on a financial planner. Something that one of my best business professors said years ago as really stuck with me:

"If a financial planner is so good at what he does, why is he wasting his time with people who want to invest a few thousand when he could be making real money"
 

kimberland

Bronze Contributor
Jul 25, 2007
825
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"If a financial planner is so good at what he does, why is he wasting his time with people who want to invest a few thousand when he could be making real money"
To add value,
a financial planner (or any other advisor) doesn't have to know more than everyone,
they simply have to know more than YOU.

I find it truly amusing
that we all talk about "fastlane" and building systems
but when it comes to paper investments,
suddenly we're supposed to do it ourselves.

If you want truly passive income
re: paper,
I can't see how you can do it
without building in a layer of management
(which is how I use my financial advisor).

If someone can show me how,
I would appreciate it.

Says the gal happily paying her 2%
or $20,000 some odd dollars a year
to have an entire team of people
(and research)
at her beck and call.
 

kimberland

Bronze Contributor
Jul 25, 2007
825
120
38
BTW... if you think that 2% (actually likely 3%)
doesn't make sense at the lower investment thresholds,
consider this...

I started out investing $25 a month with a financial advisor.
That's $300 in that first year.
I paid $9 in fees.
Meanwhile I got an annual sit down with the advisor
(I picked his brains quite clean),
monthly newsletters
and access to him via phone or email whenever I wanted.
All for $9.
I can't even buy a book on investing for $9.

If you're not getting your 2-3% out of your advisor,
you either don't have the right advisor
or you're not using him/her properly.
 

Jonleehacker

Gold Contributor
Speedway Pass
Oct 31, 2007
1,856
1,131
614
Edmonton, Canada
Says the gal happily paying her 2%
or $20,000 some odd dollars a year
to have an entire team of people
(and research)
at her beck and call.
Geez Kimber, I could lose your money in the stock market for less than that ;)

I think there are two interesting ideas going on in this thread.

1.) Yes, seek the advice of professionals who know more than you about certain topics - it is impossible to be an expert in everything. I just try and learn enough to ask the right questions.

2.) Nobody will ever really care about you or your money. Meaning you don't abdicate your responsibility to your advisers. You still have to steer the boat and make the tough decisions, if you give away the responsibility then you are just turning your advisers into mommies and daddies and that will get you into big trouble.

To the original question, I love that part of the book and I follow it. I have 3 different plans to take care of each of the three levels. I work on them simultaneously, but the priority goes in this order: security, comfort, and then wealth.
 

kimberland

Bronze Contributor
Jul 25, 2007
825
120
38
LOL Jon.
Maybe I should post about my wins every once in a while
just in case folks get the wrong impression.
Talking about mistakes is more fun though.

I know I went off on a tangent.
Beating up on financial advisors makes me see red.
Blaming others is never productive.

And you certainly can't blame advisors for poor financial performance.
As you say, you're the one steering the ship,
making the decisions.

Financial advisors simply give you advice
(and no one should act on advice
without evaluating the facts themselves
or, at least, getting a second opinion).

As for the 3 plans...
when I was younger,
I only had one plan and that was the wealth route.
I had no dependents (still don't),
had plenty of time to rebuild
so why wouldn't I play all out with my funds?

Now I've split my assets into a comfort/security class
and a wealth class.
Why?
'Cause I prefer not to "have" to work
so I like having that bucket semi-safe.
 
OP
OP
E

encsteph

New Contributor
Nov 27, 2007
30
2
9
49
Southern New Jersey
You guys/gals are absolutely AMAZING!

Now it makes alot more sense.

I define what secure, comfortable and rich means to me and then I seek out a financial advisor who can take those plans and definitions and advise me on how/where/when to achieve each of them.

Lastly, it is my job to implement those plans.

Thanks!

Eric
 

thecoach

Contributor
Aug 29, 2007
125
24
23
Regina, SK, Canada
I would definitely do my own research rather than rely on a financial planner. Something that one of my best business professors said years ago as really stuck with me:

"If a financial planner is so good at what he does, why is he wasting his time with people who want to invest a few thousand when he could be making real money"
No offence to you (since I've heard that same thing a hundred times by others as well), but that is one of the most ignorant quotes I've ever heard. That's like saying "If Donald Trump has so much money why is he still working?" or like saying "If your business prof knows so much about business, why isn't he focusing his time on running a massively successful business with his knowledge instead of working for peanuts teaching people?"

Like Kimberland, said you not only have an advisor, ussually that advisor has a team behind him...and for the tiny little 2% MER or whatever fee you might be paying it's worth it. Instead of wasting hours on end sifting through the same regergitated ideas from book to book, you can make one phone call and ask a couple questions and if you don't get one perfect answer fro you, you will at least be able to narrow it down a few options to research on your own. In Canada alone (not sure about other countries, there are literally thousands of different mutual funds (add to that the countless options of stocks and bonds) available to people...do you seriously have the time to research through everyone of them to find the right one for you? Sorry, but there are some cases where paying someone to do the work is a lot more more effecient and cheaper in the long run than learning everything on your own.

As for the 3 plans, here are some of the things to consider:

Plan for Security - insurance type planning for the most part, wills, Power of Attorney's, etc....make sure that if something bad happens you and/or your families financial plan doesn't fall apart.
Plan for Comfort - long term/short term savings, buying your primary residence, savings for your childrens future....basically creating a little bit of a financial cushion
Plan For Rich - Building businesses, Real Estate investing, speculative investing, leveraging, advanced tax shelter/deferral strategies

Do a google search under images for 'Financial Pyramid', you'll see examples from different companies that all. There are a lot of financial companies that have similar strategies to the 3 plans (some pyramids have 4 tiers, but it's all the same ideas), but these pyramid blocks are often only filled with the products they promote. Think of it like you're building a house....create a blueprint before you build (write down an actual plan or strategy before you start jumping into buying investments or insurance), build a solid foundation so your house doesn't collapse (security plan), put up the walls and the roof so you are comfortable (comfort plan), then hang a Van Gough and a pimpin' flat screen on the walls (rich plan). Without the foundation, walls and roof, you've got nothing to hang your bling-bling on and no one ever builds a house without a blueprint.
 
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