Rich Dad Poor Dad by Robert Kiyosaki Book Review
Robert has 2 Dads – 1 his Real dad who is highly educated & he would tell Robert to study hard and get a good job. His other dad – his best friend’s father would encourage him to focus on Businesses & Finances. His poor dad would often say ‘I can’t afford it’ while his rich dad made him ask ‘How can I afford it?’. The 1st was a statement and allowed to leave him off the hook, while the 2nd was a question that forced to think!
Robert listened to both for a while & decided he wanted to follow his Rich dad’s teachings.
He shares few powerful lessons learnt from both his Rich Dad Poor Dad.
- Rich don’t work for Money:
Poor and Middle class work for Money. This creates Earned income in the form of Salary.
Rich build their business & Investments to earn money in the form of Profits, Passive Income from Rent & Interests and accumulate Wealth in form of Portfolio – Shares & Property.
Why Financial Literacy?
Wealth is not just made by ‘How much money you make’ but ‘How much you keep’. That means you can be poor in spite of making a lot of money if you don’t understand how it grows or have discipline to maintain it.
The Rich buy Assets, the poor only have Expenses & the middle class buy Liabilities thinking them as Assets such as Car, House, Electronics etc.
An Asset is something that gets us more Money, while Liabilities take the money from us.
So, its utmost important to understand the difference between Assets & Liabilities and then focus on Buying Assets.
- Mind your own Business
To be financially free, one must mind their own Business. Financial struggle is often the result of people working their lives for someone else.
- Taxes & Corporations
Hire smart Accountants & Attorneys and use their Knowledge and Resources. Hiring them may seem expensive, but good advice can save/ make manifold.
- The Rich Invent Money
Rich people are generally calculative and take smart Risks, like opportunities where they stand to gain a lot, but loose little even if they are wrong. Eg. Buying a real estate when the markets are down and properties are available at much lesser than their market value.
Work to Learn – Don’t work for Money.
Robert’s educated poor dad always focused on Job security while his Rich dad emphasised on Learnings.
Most important of Management skills to be learned :
A. Cash flow management
B. Systems management
C. People management.
Finally, there has to be a Strong reason that’s greater than Reality to stay on course and achieve Financial Freedom. Also, one must always pay themselves 1st – this creates Discipline to save & Invest as well as additional motivation to find ways to pay for other expenses & taxes.
The goal should be convert Earned income to Passive income + Portfolio Wealth. This will give Financial freedom to live without having to work another day!
Rich Dad Poor Dad is strongly recommended for everyone looking to improve their Finances and overall quality of Life.
Click here if you would like to buy it!