Robert Kiyosaki Why the Rich Get Richer

Rick H - Wednesday, June 18, 2008, 12:01AM ET  Report Abuse

• Overall: 5/5

I totally agree with Robert here. If I continue to keep funds where they are at even though I make $ I will lose more to expenses not the market but to the managers just for managing it. Time to move on to better way to invest my funds.

Eli C - Wednesday, June 27, 2007, 5:34PM ET  Report Abuse

• Overall: 5/5

Buy mutual funds that outperform the market. How do you know which ones those are from year to year? You do realize that most funds underperform, and the name ofthe fund doesn't guarantee performance, right? What if there is a change of management, and everything goes to hell? I'd much rather be in control of my own assets, instead of paying a third party to do something I can do with more agility than the lumbering giants that mutual funds are. Rapid pullouts and ourchases are measured in weeks; I can do the same thing in minutes, and take full advantage of the same opportunities the fund managers are, but unlike the funds my movement won't cause fluctuations from sheer volume. All RK is trying to say here is that if you were to closely emulate the activities of your favorite fund, but privately managed your own portfolio, you would have an 80% greater ROI. How hard is that to understand? And qwestioneverything, your saying that the solution to being fleeced is to put MORE money in? I'm sorry, but I don't see how beneficial that is. "For every $100 you give me, I'll make $1,000, and give you $200 back. You could probably do this on your own, but I obviously know more than you because I work at a big firm and have an impressive title." Now, when somebody comes around and says that you ARE being robbed and should change what you do, you are saying that the best thing to do is instead of putting in $300 a month, to put in $800? Or $1000? SO they make thier money off you FASTER? RK has always been pessimistic about mutual funds; it's not something new. He has said the stock market is an excellent investment vehicle, but since he doesn't use it, he doesn't promote or offer strategies to take advantage of it; he says to read elsewhere. I have done so, and have been behaving Foolishly and more along the lines of Warren Buffet. I'll add a great set of quotes from Mr. Buffet for yo ut ochew on, as you blindly give your money to a professional manager of a diversified portfolio: “Wide diversification is only required when investors do not understand what they are doing.” and "Risk comes from not knowing what you're doing.”

inveigh - Friday, March 30, 2007, 2:36AM ET  Report Abuse

• Overall: 1/5

I understand that Mr. Kiyosaki is not an expert on mutual funds. However, I am here to help everyone understand why they're not that bad. The truth is that if you're looking for an investment that yields INCOME, you don't buy a stock fund. Think about it. Would you take money and invest it in something that "yields...about 1.8%" or would you buy a CD earning 5%? Doesn't take a math expert to do that one. If you are investing in a stock (equity) fund, you are investing for growth, not income. An average stock fund (let's take the Vanguard S&P 500, shall we?) has returned 10.08% over the past 3 years. Pretty good, no? And the expense ratio is .18%. Nice and low, right? But why should it be anything? This is not a managed fund! Who are you paying? Vanguard! This fund has about 118,883 MILLION dollars invested. So if you take .18% of that, Vanguard gets paid over 213 MILLION per year, just to sell you a non-managed index fund. Who's greedy now, Mr. Bogle? Let's dig a bit deeper into Mr. Bogle's comments. He is correct; the average INVESTOR does not make nearly as much money as the average INVESTMENT. Why? Investors are emotional, and they want to purchase when things are "hot" and run away when the investment falters. Through their own emotional swings, they will buy high and sell low, which makes them perfectly useless investors. If those same investors were to buy an investment and hold it, even if it was a mutual fund, they would have fared much better. Too bad they're all busy trying to get rich quick to learn how to invest prudently. Time, not timing, is how money is made in the market.

qwestioneverything - Wednesday, March 21, 2007, 2:36PM ET  Report Abuse

• Overall: 2/5

Be more concerned about what you are putting into the fund than what they are charging you. You could be in the best performing fund over the last 20 years and you still wouldn't meet your goals if you don't put enough into it. I agree that funds could charge less but let the free market work that out. Those that always criticize the industry make a person feel like they can't achieve their financial dreams because some fund shop or advisor charged them to much. That's BS. Most people don't reach their dreams because they put far to little of their money to work and start way to late. But it's easier to blame someone else, I know. Focus on what you can control people.... you're spending.

Kirkydu - Wednesday, March 21, 2007, 12:48AM ET  Report Abuse

• Overall: 4/5

The mutual fund industry does rip off the general public. What's ironic, is that the SEC and NASD are primary accomplices in one of the greatest scams in financial history. Although I acknowledge that there are good mutual funds in every catagory- and more at smaller market caps and internationally, that is in less efficient markets- the number of bad funds overwhelms the good. However many times this fact is statistically bourne out or discussed by people with significant financial credentials, i.e. John Bogle, the public misses it. And the SEC and NASD makes it policy to pursuade the public into investing in these underperforming vehicles that neither add return or reduce risk in many cases. And, when the public does start to catch on a reduce fund holdings, the SEC changes rules which would allow at least a sliver of middle America another option (the SEC is in the process of raising accredited investor qualifications past $1,000,000, so that people with "only" a million dollars can not take part in the private investments and other opportunities of the rich and priveledged). If you don't believe that mutual funds are a rip off, subscribe to morningstar and do some research on the actual costs of mutual funds, both management and trading, as well as, the lack of alpha across the large and midcap spectrum of domestic funds. You will realize a few things. First, you don't need much money in the large caps, far far less than most financial planners recommend. Second, what you do have in large caps should be value oriented and managed by smaller firms.