“Creating Wealth” by Robert Allen

Dollar bill whirlpool

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Oh boy, creating wealth!

Ah, if only it were as easy as planting a money tree in the back yard.

While the money tree idea didn’t work, at least we have Creating Wealth by Robert Allen.

Originally written in 1983 and updated a few times since (most recently 2006), it’s in a way timeless but at the same time dated.

For example, it’s hard not to laugh when he talks of 12% mortgages (now 3%), banking with a savings and loan company (all shut down from the S&L scandal), or 6% savings accounts (0.25% anyone?), so it can be difficult reading with a straight face.

However, the fundamentals of wealth management and real estate investing he describes still make sense to me.  The most important thing to keep in mind while reading this book is to remember the meta-levels — read what he does but see the underlying reason for why he does it.  One of the key tenets here at Enwealthen: Understand the “why” and you can always figure out the “what” of what you should be doing now.

It’s an enjoyable read.

The content was presented in a methodical, easy to understand manner.  Topics hit all the high points – setting your correct mindset, his “wealth principles” & investing strategy, how to get and manage debt, how to be a landlord of your property, creative financing, and how to protect your wealth.  I especially enjoyed his “cookie-cutter” presentation, showing different ways to make money on real estate, not just “buy low, sell high”, as well as his examples of how to use newspaper classified ads to generate your leads rather than having to cold call thousands of home owners.  My number one takeaway from this book however, was the concept of creative financing.  I’m inexperienced in real estate financing, and all his examples of ways to obtain funding via banks, seller financing, partnerships, etc. were eye-opening.  Hopefully, they are still relevant in today’s real estate market.

From an entertainment perspective, I enjoyed hearing stories of the media taking him up on his “Drop me in any city with just $100 and I’ll buy a property in 72 hours” challenge.  Frankly, I’m not sure I could survive 72 hours in a city with just $100 let alone buy some property, but it does underscore the fact that wealth is a state of mind not a measure of your bank account.  As long as you are wealthy in knowledge, experience, desire, and courage, you can get wealthy in bank balance.

Separately, I was surprised to find Mr. Allen spent an entire chapter on numismatics – the collection of coins.  The chapter seemed dated in price, as you would expect from a 30 year old book.  However, the material itself was spot on, including the references for additional reading.  The primary omission I noticed was 30 years ago, there were not as many counterfeiters operating out of China as there are today.  These days you can find counterfeit everything, but especially gold Krugerrands, and Morgan dollars.  There are even incidents of tungsten-filled gold bullion bars, and counterfeit coins in counterfeit grading slabs.  Key takeaway – always be sure to buy through a reputable dealer, especially when dealing in high value coins.

Robert Kiyosaki recommends this book in his Rich Dad, Poor Dad series of books, and I can see Mr. Allen’s thoughts in Creating Wealth occasionally reflected in Mr. Kiyosaki’s works – low/no money down real estate investing, control is key, protecting your wealth, and the lack of wealth training in our public school system.

In short, recommended, with the caveat to do your own thinking down the paths he takes you, and as always, consult with your lawyer and accountant before attempting any of the suggested techniques.

Related Information

There is always more to learn, so I make special note of any additional reading mentioned in the books I read, financial or otherwise, for future reading.  Here are the books Mr. Allen mentions in Creating Wealth:

If you enjoyed the review and don’t want to miss any, join the Enwealthen mailing list.  You can also read more reviews or purchase Creating Wealth on Amazon.

Have you read Creating Wealth?  Share your thoughts on this book, or any of the related ones in the comments section below.


Dollar bill whirlpool image courtesy of Patrick Hoesly.


    • Thanks, Chris. Given your background in mortgage lending, I'm interested in your perspective on the techniques he describes. Have you worked much with buyers or sellers interested in creative financing options rather than the traditional straigt-up mortgage.

  1. I noticed Ramberg Media Images no longer has a flickr page I can link to for the money tunnel image in this article.

    If anyone knows an updated site for them, please let me know. Thanks!

  2. Jack, thanks for a good posting. I think that a lot of gaining wealth is in the execution. You don’t need a great idea, you just need a good idea and good execution to make money.

    • Too true. Here in Silicon Valley, I’m surrounded by people with great ideas. But the people who can actually execute on an idea is a rare breed. Just ask any of the venture capitalists!

  3. Since every income property is someone else’s outgo property, creating wealth in real estate is largely a process of extracting wealth from others unable to retain their own wealth.

  4. That’s true to a degree. Just like any transaction, there is a buyer and a seller. It is up to everyone to learn the ins and outs of money and wealth in order to thrive.

    In the case of renting, renters need to do the fundamentals of earning, budgeting, saving, investing to grow their assets to where they can buy property, if they wish. Many people choose to rent even after they can afford to own a home.

    Everyone’s different, but everyone needs to understand money and how to use it wisely.


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