Rich Dad, Poor Dad is the story of an author, Robert Kiyosaki, who was brought up in Hawaii by two fathers (Poor “biological” and Rich “not biological”). His Rich dad was an entrepreneur and never graduated from school, whereas Poor dad was a highly educated government worker.
He decides to learn ways to become financially successful from his Rich dad. This book has all those intelligent key tips that rich minds opt for through their financial acumen and power of imagination.
Many people work diligently throughout their lives for money but they never become financially stable, whilst others know how to smartly win the race.
We all go to schools and strive for good grades and this struggle goes on and on until we reach university. This whole struggle is done just to get a good job one day. Our Education system teaches us ways to make money but never focuses on how money can make us. This is such an important skill that even a highly educated man cannot become financially groomed without it.
People usually believe that if they get promotion in their jobs or if they get better opportunities so that would be enough for them, whereas it never happens that way. When your income increases, likewise your expenditures also elevates which consequently increase your liabilities. A job is basically not a long term solution to your problems. You should know how money can work. Hence, always follow this golden rule:
Know Assets → Acquire them = Become Rich
Kiyosaki has strongly highlighted to accumulate income by investing in assets which can pay your expenses. Invest your income in stocks, mutual funds, bonds and real estate rather than buying expensive gadgets/luxuries from your income.
We usually complain that our income goes up simultaneously with expenses. It happens because when we get a raise, our list of wants also accelerates. However resultantly our liabilities keep on increasing than our assets.
Rich get richer because their assets are more to cover expenses and income is re-invested in more assets. For
most people their profession is income but for the rich chunk, their assets are income.
On the stock market, reinvested net income is called Retained earnings. Reinvesting income into assets results into the power of Compounded Interest, which is according to Einstein.
“Eighth wonder of the world”.
Hence, following points are to be kept in mind:
– Do not aim for more income rather one should aim for more assets. Surplus cash flow generated from assets should be reinvested into other assets.
– Moreover, invest in learning about how to invest. Every rich person loses money, do not have this fear of losing. Playing not to go into losses will never give you enough courage to make money.
– Surround yourself with smart investors and brainy people.
– Saying that you can’t afford is limiting yourself, always find ways to afford. When you find ways to afford then eventually you find possible ways of making more money.
“It’s more important to grow your income than cut your expenses. It’s more important to grow your spirit that cut your dreams.” – Because hoping drains you and action creates energy.
In the end, let’s conclude on this:
– The only difference between a rich and a poor is “use of time in the right way”. Everyone makes mistakes but not learning out of those mistakes will never take you anywhere.
– Work for the love of knowledge, your focus should not be money entirely. When you work passionately then your dedication results in monetary rewards. At the end, money is all about the right idea at the right time.