One problem I always had with Kiyosaki’s message in the book was his lack of clarity about taking on debt.  I distinctly remember that the overall message of his book was not to be afraid of debt.  He said smart people are in debt.  He said poor people try to avoid debt.  I always felt that his book was way too simplistic in its approach on this subject and that it would leave people with a false sense that it was okay to be way in debt as long as you are trying to make money in the process.

This message is Tom Foolery.

What Kiyosaki should have been clearer about was some simple principles that are made known to anyone who builds businesses.

A good business model involves creating a system where you can create value that people will pay for on an individual basis.  In other words, you create a product or service that someone is willing to pay you more for than it costs you to produce.   This is the fundamental basis for any business model.

It is okay to borrow money to produce that product or service so long as you can still make a profit on it after paying back the loan and you are able to sell whatever that product or service is.  The business model must be profitable though before you can scale it up.  If you borrow huge sums of money to scale up an unprofitable business model, you simply drive yourself to bankruptcy at a much faster rate.

In fact, part of a bank’s responsibility before making a loan is to see that your business model is sound so that they can expect to get their money back from you along with interest.

Kiyosaki fails to make this point clear in my opinion.  Obviously he understands this principle.  He just didn’t communicate it properly.  Instead his message attained an image that debt is good and people should welcome it with open arms.  His one caveat is that the debt must be for assets and not liabilities.  If someone needs to be taught that, then they should not be borrowing money for anything period.

Imagine conducting your meetings on a monthly basis where every one of your sales people can attend.  It doesn’t matter what part of the country or what part of the world they are in.  They can call in and be brought up to speed on whatever is going on.  You might already do something similar to this.  Here is the big advantage though.  If you use a good conference call service, those meetings are all recorded. 

The teleconferencing service I use records the whole thing for me and makes it available online for as long as you use their service.

If one person missed the meeting, they can listen to it later.  If there is anything that people are unclear about, they can replay the meeting a second or third time.  The entire meeting can be replayed again and again.  Can you see the value in this? 

You and I both know that your best sales people are revealing little nuggets of top quality information during your regular conversations with them.  What if that information could be captured for the rest of your sales staff to listen in on?  Wouldn’t that help those other less experienced guys get much better at their craft?  You bet it would.

A lot of managers and small business people out there don’t know that this kind of tool is available.  It has been around for a little while now.  You don’t need to be really tech savvy to conduct a meeting this way either.  It is really easy to learn how to use a simple control panel to adjust any settings you want for your particular needs.

Once you do it once, you’ll see that it really is a nifty tool.  It is the perfect way to capture and preserve all the little ideas that reveal themselves when having a meeting with your sales staff.   I highly recommend you give it a shot.  I went with the service that I use because I heard they were reliable.  I know there are free ones out there.  I just didn’t want the headaches that inevitably come along with using a free service.  In my opinion, it is worth it to pay a few bucks for the increased reliability.

The unemployment rate is lower because people have given up looking for work, not because they have been put back to work.  Yet, the Whitehouse tried to spin this like it was somehow positive for the country.

CNBC Article

Romer was encouraged by the down tick in unemployment.  Really?  You are encouraged that people have given up looking for work?  Ahh.. I see.  The Obama plan of economic recovery involves waiting for people to become hopeless in their search for a job so that they choose an alternative approach like retirement.  Great idea guys!  Woo hoo!  What a concept.

What a bunch of idiots. 

This Romer lady is ridiculously incompetent and totally reinforces the accusation that this cabinet is an incompetent one.  When was the last time that the President’s cabinet was populated with this level of total incompetence?  She needs to get the boot along with most of the other cabinet members.

People are leaving this state in droves. They are leaving for jobs. They are leaving because New York is so unfriendly to business that big businesses do not want to operate here. The only way we can get a real fortune 500 company to expand operations in Western NY is to bribe them with some kind of tax breaks or other incentive. How ridiculous is that?

The funny thing is that corporate America knows that the population of New York State is a highly educated one with plenty of skills. Yet this obvious advantage is not enough to overcome the red tape and other baggage that comes along with a New York State corporate address. That is a damn shame.

I can’t count how many people I graduated high school with who have uprooted their families for greener financial pastures in places like North and South Carolina. We were reminded of how many people have left Buffalo when we saw the thousands of Buffalo Bills fans at the Carolina Panthers game a couple weeks ago. That is downright embarrassing.

These damn politicians (Paterson excluded) just don’t realize what they have done. Instead they keep raising taxes on the people who remain here to make up for the shortfall from the ones who left. They are dreaming up ways of collecting new revenue. Instead of altering the tax and spend policies that are at the root of the problem the exacerbate the problem even more. Political genius at its best.

When is there going to be a state constitutional convention for voters to vote on in the ballet box? Isn’t it about time we had one?

You have to hand it to the founder of the company though. The guy really built quite an impressive empire. I think the move to instant coffee will hurt the image of their stores though. Right now their stores are perceived as a high cost high value selection in coffee. The instant coffee alternative cheapens the brand. The people who start associating instant coffee with Starbucks open themselves up for some other competitor of Starbucks to take the high price high quality coffee position away from Starbucks.

Watch for some other high end coffee brand to start advertising:

Instant Coffee: Never Have. Never will.

Now people label guys like Peter Schiff and Jim Rogers as being overly bearish on the US economy. However, these two guys predicted what was going to happen to the US economy in the financial crisis. They predicted it. They were preaching about it when everyone in California and Florida was out flipping houses. These guys said the financial crisis was eminent and unavoidable so long as our goverment and Federal reserve continued its policies of lose money.

I remember thinking these guys must be nuts because everyone was making money, the economy was soaring, unemployment was really low and there were plenty of jobs around.

Then the market collapsed. Fortunately I got out early so I didn’t get killed like everyone else. I wish in hindsight I had gone short the market. Anyway, with all the news of impending financial disaster, I began doing more research on the crisis and how it came to be. Low and behold, people like Peter Schiff and Jim Rogers were right all along. They put their own money behind waht they were saying publicly. Thats how you know they weren’t lying. They believed this would happen and it did.

Now people are warning that the crisis will persist because of the lose monetary policy of the Fed. Do your own research. make your own decision. I am inclined to believe Schiff still knows what he is talking about.

We never participated in the massive housing boom that so many other areas in the United States experienced. I think that our high property taxes around here prevent things like that from happening. I suppose they are still possible, just far less likely. If they did happen here, they would probably develop much more slowly than other areas of the country.

Now that the real estate market has taken a turn for the worse, I am kind of grateful that we never experienced that boom. No boom hopefully means no bust. I think the banks around here are far more responsible when it comes to making loans to people also. It seems like even though I have good credit, banks are still hesitant to fork over huge amounts of cash.

That should bode well for the local banks’ balance sheets. Maybe there is opportunity here to own stock in them?

So, I guess if you are looking for a silver lining in the way things are done around the Buffalo area, you can rest assured knowing that the lack of froth in the local real estate market has pervented the need for home prices to give back any of the last 5-10 years of capital gains.