Friday, 23 May 2014

p.Kiyosaki's little Cashflow Game

The last part is here:   Many a Big Project

Let me do some advertisment today. There is no intention to promote or dismiss him. This is only my opinion of what's good for a guy.

I have tested the android Cashflow Game by Kiyosaki.

He was made famous and very rich by his book, "Rich Dad, Poor Dad". If you want to read more, just google him.

In the game, the goal is to make financial freedom by making the passive income exceeds expenses. For a lowly-paid guy ($3,000-$5,000), it usually takes about 70 turns to be financially free (i.e., 1.5 years). For a higher-paid guy ($8,000-$10,000), it usually takes about 100 turns to be financially free (i.e., 2 years), which is nonsensical. No one can achieve financial freedom in 2 years. Fuck! Also, a highly-paid guy will find financial freedom way faster. His expenses may have been higher but he is way more capable and have great lifestyle.

Here are my observations:
  •  Final Cash Position:   At the end, it doesn't matter how much, a guy has in his bank account, as long as his passive income exceeds his expenses, he stops. With a strong final cash position, one can easily buy any cashflow assets.
  • Stocks and Shares:   I didn't bother about investing in stocks and shares. I think they are bullshit.
  • ROI:   The ROI calculation was too simple. It simply calculated the return-on-investment, simply by dividing the income with initial investment. It was not a good indicator/assessor of good returns. If one pays, 5% down. The ROI would be greater than a 10% down.
  • Risk:   This was one of the worst areas. The game only allows 5-10% down payments. The rest are bank-loans. This is very dangerous. If the asset goes more than 5-10% down, the bank is going to recall the loan as the asset is not giving a good cover to their outstanding loans. In financial downturns, one would lose the rental income too. If these properties are on loan, one would be 冚家鏟!
Overall, the game was too simplistic. But, maybe this was intended as a game for newcomers new to the investment game and the broad idea behind passive incomes. If that was the intent, then the game did serve its function.

My Comments:
  • Cash Purchases:   I am still a fan of cash purchases. I simply hate leveraging. I knew many people leveraged and won big time. But, I am also knew of many more, myself included, to have lost big time. Call me a chicken, call me once-bitten, twice-shy. I am not playing the leveraging game ever. Even credit cards are shunt, because it will eat greatly into the cashflow. If no ready cash, just spend less.
  • Property Game:   It is a very long term game. It will stretch 20-40 years, if on bank loan. During this period, there would be multiple financial calamities that one has to face. Please don't tell me that you are too smart and are smart enough to avoid them. One may be able to avoid one, but multiple, I sincerely doubt.
  • Stocks-and-Shares:   Please stay far far away.
  • Intellectual Businesses:   Very hard to start and very hard to sustain, although it is very cheap to begin in one. In fact, Kiyo suggested working for big companies and grow the passive income from the active income earned. Business-building is for the extremely brave.

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