The poor and the middle class work for money. The rich have money work for them. Enriched by Kiyosaki’s personal experience and the teachings he received from his rich dad and poor dad, the book highlights different attitudes towards money, work and life. Robert T. Kiyosaki developed his unique economic perspective from two very different influences - his two fathers. One father (Robert's real father) was a highly educated man but fiscally poor. The other father was the father of Robert's best friend - that Dad was an eighth-grade drop-out who became a self-made multi-millionaire. The lifelong monetary problems experienced by his poor dad pounded home the counterpoint communicated by his rich dad. Taking that message to heart, Kiyosaki was able to retire at 47. Guideposts that will assist you to grow wealthier are:
The Rich Don’t work for money; they make money work for them. See what others miss. There will be many opportunities right in front of you.
Know Financial Literacy – The rich get rich because their asset column generates more than enough income to cover expenses, with the balance reinvested into the assets column. Never buy luxuries on credit.
Mind your own business – Means to build and keep your asset column strong.
Know taxes and the power of corporation
Rich invent money – Two vehicle help achieve financial growth are real estate and small stocks.
Work to learn – Don’t work for money.
Financial literacy is the ability to read and understand financial statements. Financial IQ covers accounting, investing, market and law. Rich buy asset. Poor only have expenses. Middle class buy liabilities they think are assets. Wealth represent how much money your money is making. Person’s ability to survive so many number of days forward if you stopped working today. Asset column of balance sheet generate enough income to cover expenses and reinvestment. Asset is something that puts money in my pocket. Liability is something that takes money out of my pocket. Financial IQ is made up of knowledge from four broad areas of expertise viz. Accounting, Investing, Understanding market and Law.
Mind your own Business. Build Assets – Diverse like stock, bonds, Mutual Fund, Income generating, real estate, Notes/IOU’s, Royalties.
Know history of takes and power of corporations. Will help generate Tax advantage and protect from law suit. Rich with corporation earn, spend and then pay taxes; while people who work for corporations earn, pay taxes and then spend.
The rich invest money. Investment will be bought or create professionals who help create. They ( I ) Find opportunity that others have missed (ii ) Raise money (iii ) Organise smart people.
Work to learn; Don’t work for money. Get out of rat race. Play the game. You need to know about a lot, even if a little. The main management skills needed for success are:
The management of cash flow.
The management of systems (including yourself and time with family) – i.e. personal time.
The management of people.
The most important specialized skills are sales and marketing. This needs communicating to another human being, which is the base skill of personal success.
Beginning: Why financially literate people face roadblocks to become financially in depended – 5 reasons:
Fear - Start early. To make progress (i) first go unbalanced, just look at how you make progress walking. (ii) Be focused : Put a lot of your eggs in a few basket. Don’t put your few eggs in many baskets.
Cynics – Never Win. Unchecked doubts and fears creates a cynic. Cynics criticize and winners analyse. ‘I don’t want’ hold the key to your success.
Laziness – Busy people are often the most lazy. Cure for laziness ‘Greed’. Forbid – ‘I can’t afford it’. Guilt is worse than greed. Do what you feel in your heart to be right.
Habits – Our lives are a reflection of our habits more than our education. Asset column is far more important than the government. Pay yourself first.
Arrogance – Is Ego + Ignorance. Have absolute no idea of what they are talking about. These people bluster their way through their discussion. To overcome ignorance, Educate. Find expert and take advice or read a book.
Getting Started :-
Need a reason (combination of ‘wants’ & ‘Don’t wants’) (also known as purpose) greater than reality.
Choose daily richness and happiness. Invest first in education. It is the only real asset and most powerful tool.
Choose friends carefully, there is a great power in association.
Master a formula and then learn a new one.
Pay yourself first.
Pay your brokers well.
Be an ‘Indian Giver’ – Get back faster, what you give.
Assets – Buy luxuries. To be the master of money you need to be smarter than it.
Have role models/heroes.
Teach/Give and you shall receive.
Some to Do’s:-
Stop doing what you’re doing
Look for new ideas
Take Action :-
Find someone who has done what you want to do
Take classes and buy tapes
Make lots of offers – Just offers – someone may say yes – use escape clauses – ‘I need to consult’
Know what you are looking for; then go look for it.
Consumers will always be poor. As they run away when there is crash or correction.
Look in right places.
Think Big. Look for people who want to buy first and then look for someone who want to sell.
Learn from history. Everything big started small.
Action always beats inaction.
Important words are ‘done’ and ‘do’. Take action before you can receive the financial rewards.
Take Action!
Two great gift – Mind & Time.
Money spend – Foolishly – you become poor.
Money spend on Liabilities – you remain middle class.
Money spend on Mind in acquiring assets – you become rich.
Share this with your children. Prepare them for the world that awaits.
Future is determined By CHOICE.
Income can be generated in three ways:
Earned by way of salary
Passive from real estate investment.
Portfolio from paper assets.
The key to becoming wealthy is the ability to convert earned income into passive income and or portfolio income as quickly as possible.
Taxes are highest on earned income and least on passive income.
it 's a great lesson on how we should transmit the best financial values in our children's lives and how we can escape the rat race. While the advice in “Rich Dad, Poor Dad” — and from Kiyosaki himself — has garnered some controversial attention, the book does offer a handful of power lessons that can be useful to anyone looking broaden their views on money.
Here are some essential takeaways:
The rich buy assets, not liabilities
Financial literacy can only be learned through experience
Learn to sell
Fear and self-doubt are your greatest barriers to success
Always think in terms of opportunities.
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