Comments on: Diversification is for Amateurs

By: Free Money Finance

Free Money Finance — Tue, 10 Jan 2006 19:01:52 +0000

Seven Steps to Start 2006 on the Right Financial Foot

Here’s a resolution-related article from Dallas/Ft. Worth Texas fee-only financial planner Steve Blankenship titled Seven Steps to Start 2006 on the Right Financial Foot. I’m posting a summary as well as links to posts written on corresponding topics so

By: Loi Tran

Loi Tran — Tue, 06 Dec 2005 23:40:09 +0000

I read this website about Kiyosaki a couple of days ago. http://www.johntreed.com/Kiyosaki.html John T. Reed did a thorough analysis of Kiyosaki and his book Rich Dad Poor Dad. It's a good read, check it out.

By: frugal underground

frugal underground — Mon, 05 Dec 2005 18:29:25 +0000

Carnival of Personal Finance: Number 25

Welcome to the 25th Carnival of Personal Finance! We have a great selection of fabulous entries this week, and in the interest of almost-randomness, I’ve organized them in order of word count. Start at the beginning for bite-sized chunks flowi…

By: Kiyosaki skeptic

Kiyosaki skeptic — Mon, 05 Dec 2005 06:58:04 +0000

I’m a bit skeptical of Kiyosaki’s advice, since apparently his “rich dad” is a figment of his imagination. Granted, it’s a great hook for selling books, but it doesn’t make me confident in his ability to do anything other than sell lots of books.

As far as diversification goes, it is good for passive investors, especially those who don’t really know what they’re doing yet (like myself). However, if you do know what you’re doing, by all means don’t diversify.

By: Brian

Brian — Sat, 03 Dec 2005 01:46:10 +0000

I think Loi Tran has hit the nail on the head…it is a shame that Kiyosaki did not address the positives of diversification and the dangers that can come without it.

Kiyosaki is and has always been sensationalistic. Though I find his writing entertaining, I am always concerned with the fact that many might be adversely affected by his teachings.

By: Flexo

Flexo — Fri, 02 Dec 2005 19:03:42 +0000

I’ve looked into it… in the last few years it was something I was considering for a career change. It’s a lot of studying for certification exams, sure, and one gets better with experience, but it’s a profession that’s within the means of any dedicated, intelligent person. (I admit, not “anyone,” as I said before, would meet those qualifications.) But I suggest you take a look at rocket science. :>

I’m not intending to take anything away from anyone who has worked hard at becoming great at what they do.

Kiyosaki’s assertion that 62-year-old retirees, teachers, and housewives shouldn’t get into financial planning if they desire to do so is ludicrous, irresponsible, and unacceptable. While one might stereotype by saying old geezers start to lose their cognitive ability by a certain age, you can’t make a blanket statement about who is qualified to learn a profession and who is not.

By: thc

thc — Fri, 02 Dec 2005 18:15:46 +0000

I have to take issue with your comment that anyone can learn to become a financial planner. I would urge you to look into what it takes to become a CFP. It’s not rocket science but some of it’s pretty darn close.

By: Loi Tran

Loi Tran — Thu, 01 Dec 2005 23:36:12 +0000

I’ve also read that article and thought Kiyosaki had given bad advice. The title to the article is really bad. He should have called it focusing on your investment efforts. He did not talk about the risks of not diversifying. Even though you pick investments that you think are the “best investments”, when you are wrong, let’s not hope you have all your money in that investment. People make mistakes, no matter how smart they are. It’s minimizing the mistakes that is important. Overdiversifying is also bad. Diversifying works up to a point, then there’s diminishing returns on each investment until there is no extra benefit on each additional investment.

By: Alex Givant

Alex Givant — Thu, 01 Dec 2005 18:35:03 +0000

There is a thing called “Survival Bias” – we know about successfull businessmen and decide what they did is right for everybody. It was right for them, on each case of success there are 100 cases of failure that we’re not aware of.

By: Investing Intelligently

Investing Intelligently — Thu, 01 Dec 2005 05:03:50 +0000

Diversify, or Quit Your Day Job

Saw this article, “To Diversify or Not to Diversify” on the Canadian Capitalist’s blog and at Consumerism Commentary. Kiyosaki seems to recommend not diversifying (for “any investor who wants to be a rich investor”) yet h…

By: Dave

Dave — Thu, 01 Dec 2005 05:02:03 +0000

I also posted a criticism of Kiyosaki's article that you might be interested in. Looks like he's not making any friends. Great site by the way, got it on my blog roll.

By: klauss

klauss — Thu, 01 Dec 2005 01:33:41 +0000

I found this to be one of the worst articles by one of the new Yahoo columnists. I find it true that you can create more welth by not diversifying, but you can lose more wealth too. I like how he puts himself and Buffet in the same category for choosing wize investments to concentrate on, while implying that stocks and bonds are somehow not as good. His books are so blatent common sense, it is hard how someone can get more out of them by actually opening the book than by reading the summary on the back. Save, don’t spend, don’t overpay taxes to the man.