My husband and I think about home ownership differently, after reading “Rich Dad, Poor Dad,” a book by Robert T. Kiyosaki and Sharon L. Lechter, CPA. The basic premise is that an “asset” generates independent income without your day-to-day involvement.
The house you live in is not really an asset because you”re paying a mortgage, insurance, taxes and upkeep on that property, whereas a rental unit is an asset because it is generating an income through tenants paying their rents. If the amount that tenants pay in rent is greater every month than what you”re spending on the place, then that property has a “positive cash flow.”
Kiyosaki also developed a board game, “Cashflow 101,” to help people learn how to invest their money. We bought the board game for Jonathan”s birthday last summer and took it with us to play during the Cobb Mountain Music Festival. The game made a clear distinction between making business investments and spending your money on “doodads,” various luxury items.
The game”s objective is to leave the “rat race” and achieve that positive equation ? independent income that exceeds your monthly expenses ? and to also achieve your “dream.” I play to endow a children”s wing of a library in the world of the “Cashflow” game.
A Petaluma City Council policy also upholds the importance of a positive equation in its “Community Impact Report” (CIR) requirement for new commercial developments exceeding 25,000 square feet.
Martin J. Bennett, co-chair of the Living Wage Coalition of Sonoma County, explains the benefits of a CIR in the December 2008/January 2009 edition of the Sonoma County Free Press: “A CIR is a comprehensive analysis of the fiscal and economic impacts of a proposed major development project. The report is relatively brief, the developer pays for it, and a city-designated consultant does the work.” The end result, Bennett says, “will enable policymakers and the public to evaluate the trade-offs and public costs of a project.”
This idea bears looking at when evaluating applications for large retail developments in our local communities. Will they generate additional sales revenue, or will local residents spend the same amount and merely redistribute it? Will the loss of revenues hurt other local businesses? How many jobs will be lost if these businesses shut their doors?
If additional sales are generated by attracting shoppers from out-of-area, how will that increased traffic affect the city”s road maintenance and its policing capability? Can it stay ahead of the curve and maintain a positive equation?
Will the large commercial development hire employees at full time with benefits or will it pay part-time wages? How much will local taxpayers subsidize part-time jobs that do not provide health insurance or an adequate living wage?
The advantage of a CIR isn”t just to the municipality; Bennett points out that developers “will no longer have to deal with community concerns in an ad-hoc or piecemeal way. The CIR will showcase the community benefits of a proposed project and facilitate the development of a community consensus. This should enable a project to move forward expeditiously to obtain permit approvals and thus shorten the time line for the developer.”
Reading Bennett”s article and reflecting how large commercial development could easily seem a quick fix, I was reminded again of playing Kiyosaki”s “Cashflow 101,” of landing on the square marked “doodad,” and how an easy purchase that was not carefully thought out could all too easily become just another liability.
I hope our government officials remember the vital importance of maintaining that positive equation when evaluating potential development; a Community Impact Report could be an ideal tool for weighing the pluses and minuses. For more information about CIRs, visit www.livingwagesonoma.org. To read Bennett”s article, visit the Peace Press online archive, www.peaceandjusticesonomaco.org/peacepress.html.
Contact Cynthia Parkhill at cparkhill@clearlakeobserver.com.
Don”t forget to write!
The Clear Lake Observer*American welcomes letters responding to articles and opinions that have appeared in this newspaper, as well as on topics of general interest. Letters can be sent to ObserverAmerican@gmail.com or mailed to PO Box 6200, Clearlake, CA 95422. Please include complete name, address and telephone number. Anonymous submissions will be discarded.
