I finally got around to reading Multiple Streams of Income by Robert Allen. I had ignored it for many years, after discovering that the author had gone bankrupt in the past. I did not want financial advice from a failure. I have always liked the theme of money coming in from different sources. It's a popular book, so I got a cheap second-hand copy and read it. Here's my review:
The book is at it's best near the start when it talks of the basic principles of saving money. These sections were very good and contained well written chapters about basic money management. I thought the first 4 chapters were great and they covered the topic of personal finance in a very interesting and informative way. One chapter says every time you spend money; take a few extra minutes to: plan your purchase, get a discount, get a receipt, examine your receipt, etc. I didn't expect this type of good basic advice from this book. Unfortunately, after the first 4 chapters, it all goes downhill.
The book is at it's worst when it suggests outrageous money making schemes such as network marketing (aka pyramid selling or MLM), which has been discredited long ago. When it talks about this type of scheme this is a big fail in my eyes, because that type of business is a pyramid scheme, no matter what the organisers tell you, and pyramid schemes are illegal in many countries.
Many of the schemes presented in the book, sound great, but have little chance of working consistently in the real world. In the chapter entitled "Your Sixth Stream", on page 170, a guy named Ted Thomas claims he has discovered the best kept secret, of a virtually no-risk investment with a 50% return. He says it is so simple and rock solid safe that you'll wonder why everyone isn't involved in it. He then goes on to describe a crazy scheme of buying people's tax debts. He seems to suggest that you buy someone’s tax debts from the government, pay it, then hope the debtor pays you back, otherwise you get a percentage of their late fine, or the government allows you to take their house. But, when you think about it, if they can’t afford the tax, they wouldn’t be able to afford the late fine either! Their house would not be taken from them without a protracted legal fight. The scheme seems mercenary and ridiculous, taking advantage of people in financial difficulty, and would be complicated by government intervention. This type of outlandish scheme is typical of the other get rich schemes presented in the book.
The book is much longer than it needs to be, and many chapters are completely forgettable and just seem to be there to lengthen the book. Other chapters are outrageous fantasy schemes which look great on paper, but are likely to fail in the real world.
The principle of having multiple streams of income is a good one, and is a system I am following myself by attempting to invest in many different places. It is a good idea, but overall, not a good book. I just think the author could have explained the theory much shorter and simply.
I've got a problem with Robert Allen. I think his heart is in the right place, but it's hard to ignore that the president of his "nothing down" real estate club went to jail for using Robert's property investment advice. Also Robert Allen has been declared bankrupt in the past over his property deals, in spite of his fantastic university education background and real estate skills. Allegedly, he still has not had the integrity to pay his bankruptcy creditors back, even though he is now wealthy. John T Reed has written his criticisms of Robert Allen. He claims that Robert Allen once said to his associate: “We’re not in the real estate investment information business, Marc. This is show business.”
Moneyseeker3000 rating: 2 stars out of 5.
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