An argument against Rat Race Cashflow in Vietnam market

By , March 16, 2013 2:58 am

The benefit of diversification

Why Robert Kiyosaki’s "Rat Race" Cashflow game is more harmful than useful in Vietnam market:

  1. Most available passive income sources (dividend yield, coporate bond rate, deposit rate, insurance rate) can’t beat real inflation. Relying on passive income is a gradual decay, a timed death.
  2. An illiquid corporate bond market plus an extremely risky equity market (read: not for moms and pops) means very few choices of instruments are available to retail investors.
  3. The personal wealth management industry is underdeveloped. Many lucrative assets that are expected to yield passive income are not available to retail investors.
  4. Authority: the visible wealth of Kiyosaki comes from selling self-help / motivational books, not from trading financial assets. A question on the authority and validity of his methods exists, at least from a finance professional perspective.

Why harmful? Because in finance, doing nothing (max loss = inflation – deposit rate) is less worse off than doing the wrong thing (max loss potential = 100% capital).

Image source: http://dilbert.com/strips/comic/2008-12-13/

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