As far as I know you’re correct. Loans against securities are regulated by “Reg T”…currently requiring 50% equity as initial margin. My understanding of the above post was that he was talking about an example of buying “high” dividend paying stock using a low interest rate bank loan…such that the dividend covered the carrying cost. Banks aren’t permitted to make 100% loans against securities.
If you were to borrow money in Japan at very low interest rates and then buy US securities, you have a wide spread. Of course, you then have the currency risk…but that’s another story.
I must begin by saying “thank you” to all of the regulars here at CREonline. This site has done amazing things for me and my career. Not only has it served as a tremendous source of information, but the 24-hr-per-day support has picked me up many, many times. I know I would not be where I am today, if not for this site. It has truly been a HUGE inspiration to me!
Since the convention, I purchased CASHFLOW, and have enjoyed many hours of turning wrenches and answering phones (I always get the great occupations!)
Along the way, I’ve picked up many life lessons that the game seems to teach, beyond the big one: financial literacy. I wanted to share some of those with the board, as well as hear some things everyone else has picked up from the game.
At first, you may second guess whether or not to give to charity. After you’ve done it, however, you quickly learn that it always PAYS to give.
You’re not disadvantaged (in becoming financially independent)if you make less money…usually the more you make, the more expenses you have, and the harder it is.
Don’t loan money to people…or if you do, don’t expect to get it back
Buy stocks when things are going wrong, sell when things are going good.
It’s important to go through life “thinking” about your financial future, instead of going through life from paycheck to paycheck. And doodad to doodad.
Becoming rich and financially independent is not for the “materialistic”. Even those who are less interested in “earthly” wealth can see that with money, they can make a big difference in the world, and what they believe in.
Money doesn’t do you any good just sitting there. You’ve got to put it into play! (make your money work for YOU! :))
Opportunities are all around you…you just have to look for them, and do something with them.
Being downsized sucks
You couldn’t pay me enough to be a banker 8 hours a day
Here are a few…I’d like to hear others share their tidbits of Kyosaki wisdom.
I had a very enjoyable time playing this game - there were 3 of us, and we played for about 3 1/2 hours - and despite being downsized numerous times and seemingly always rolling a “1” (less paydays!) - I was still the first out of the rat race! It did take me an hour, though. That was fun. Plus, I forgot to “ask” for my paychecks at least once - another lesson, don’t count on other people to watch out for you - even if they are your friends!
Then, I decided to make life difficult for myself. And no one else noticed (or claimed not to). I mistakenly only took 10X the “payday” amount, rather than 100X, for the first few turns. OK, so they gave me most of it back after THEY got on the fast-track too, but still - it sure takes much longer to buy a $200K business on $16K/paycheck (as opposed to $160K)!. And I was still the first to accumulate enough passive income - although someone else “bought” their dream first (OK, Sandy, you win!!), we kept playing until someone “won” the “hard” way, too.
I played with SandyFL and Jeff, so you guys know I had “real” competition! We’re planning to do it again once a month - until we decide to get 202(?)
I posted this before but it “evaporated”. A wise man
once said “the difference between the rich and the super-rich is the proper use of leverage”. A friend utilizes this theory brilliantly. He will find an undervalued stock paying a high dividend and borrow from the bank to buy it. He has the dividend paying most if not all of the bank interest and the bank paying for the stock. Therefore he afford to wait for the stock to appreciate, without laying out any money.
Brilliant! Ben
I think your observations are correct. It’s funny how when playing the game I loathe the idea of buying a boat or a some other kind of expensive doodad but in real life I often run out to buy the very things I am trying to avoid in the game. (Why do I do that?) Anyway, I just ordered CASHFLOW 202 the advanced game. I?m looking forward to playing with the ?harder? cards.
I totally agree about the Banker part ! I always get stuck being banker.
I notice about myself, that I take too many small deals. I hope this doesn’t make me too aggressive in real life ! There is a 15 house deal I’m looking at tomorrow… Definately a “big deal” card…hehehe
Posted by Dirk Roach on April 15, 1999 at 23:33:10:
Hi Tyler,
Maybe you or anyone for that matter can help me out on a question I have on the game.
When One gets onto the fast track and you land on a dream (an open one) should you have to buy it, like a doodad? The reason I ask is that if you follow the clor combinations of the spaces it is the same hue as the doodad spaces on the ratrace.
And I think that there should be more peril on the fast track. Sure you can lose you cash in only a few spaces on the whole board (fast track side) but there is always a pay day right after it, so it’s not a big deal.
Also on the ratrace side of it, do you keep your cards or put them back on the bottom of the respective decks? Thanks
Dirk
Your question is interesting to me, because I’ve had people that I’ve played with ask me the same thing.
I think that once you TRULY understand the point of the fast track, it all comes clear. More peril? That’s the point…there ISN’T more danger. You don’t have to worry about downsizing. You don’t have to worry about simple doodads breaking you. You aren’t as adversely affected by market conditions, and your “Pay Days” are so enormous, that…you’re right, nothing IS a big deal.
Usually when I play with people who are new to this kind of mindset, they don’t understand the point of the fasttrack. “It’s too easy!”
I just smile and say…“yep, that’s the point”
Regarding the dreams, this is another big lesson to me. No you’re not obligated to buy anything. But take the time to READ the dream. Actually visualize being able to do these things. Learn to appreciate what kind of lifestyle would afford you a six month fishing trip on a private lake in Montana (with the Plane!). If hanging out with the celebreties isn’t your style, then help research for AIDS.
You get the picture. Once you’re free, YOU’RE FREE! Enjoy life, and do what YOU want to do…whether it’s going on a missions trip, or buying a Lamborghini.
Once you’ve really learned to “bask in the fast track”, the picture is clear…you’ll understand what this life on earth is all about.
