RICH DAD POOR DAD IS A MOST FOR EVERY LIVING BEING WHO WANT TO BETTER HIS/HER LIFE.
"Rich Dad, Poor Dad was the first book that I read when I started focusing on getting financial freedom. Our society, our culture, our schools, and our parents teach us many good things, but not financial freedom."
When I was a child, my parents and my school teachers always told me that school and college education was everything. You will get a job and a good salary if you get the degree and work hard.
My mind is stuck only on school studies, and I work hard at night to get grades. But when I started reading books on financial freedom and business, I found a different world.
In school, they teach me to work hard and get a job and pay my bills. In this book, I read that the rich don’t work for money; money works for them.
I will discuss some points that I have learned from Rich dad Poor dad:
1. Rich Don’t Work for Money:
Rich people have a different mindset from poor or middle-class people. They don’t want to work, but they want their money to work for them. They don’t want to get hired by a big company, they want to own a big company and hire people to work for them. They want to buy land, rent it, and get paid for doing nothing. Their money is their best employee, and it works hard for them.
On the other hand, the poor and middle-class work for money. They work 8 hours per day to get paid. They want to increase their salary by 10% every year. They want a big house, a big car, and branded clothes first. They are good people, but their mindset is different from that of rich people. The poor and middle class feel the fear of not having money. They don’t think logically. They react emotionally instead of using their heads. Their emotions control them. Many people say, "Oh, I’m not interested in money." Yet they’ll work at a job for eight hours a day for money. I felt bad when I read these lines in this book, but that was the reality.
When you get a job, your mind will start working as an employee, but if you keep using your brain, work for free, and soon your mind will show you ways of making money.
2. Financial Literacy:
This book teaches me about financial literacy. There are many topics in financial literacy, but the main topic is knowing the difference between assets and liabilities. We often buy liabilities and think these are assets. For example, we buy a house in which we are living and think it is an asset, but it is not an asset; it is a liability. Anything that puts money into your pocket is an asset, and anything that pulls money out of your pocket is a liability. When we earn some money, we often think about buying a big house. Our expenses will increase after buying a big house or a big car, and we will have to work harder to bear these expenses. That is a poor or middle-class mindset. The observation of Robert T. Kiyosaki is:
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| Rich Dad Poor Dad. |
The rich buy assets.
The poor only have expenses.
The middle class buys liabilities they think are assets.
The middle class always struggles more and more to bear their expenses. They work too hard on the job and think their paycheck will resolve their problem. On the other hand, the rich don’t buy their expenses first; they buy assets that bear their expenses. Financial literacy is important because a person can be highly educated, professionally successful, and financially illiterate.
We need to understand the concept of wealth. If you have a big car or a big house, it doesn’t mean that you are wealthy.
Wealth is a person’s ability to survive for so many days or, if I stopped working today, how long could I survive?
We need to buy more assets to increase the cash flow, not to buy a big house that increases our expenses.
3. Mind your own Business:
The rich focus on their asset columns while everyone else focuses on their income statement.
Many people work hard all their lives to increase their income. They work hard in a job and think that if they work hard, they will earn more money. But if they work hard, they are making their boss richer and richer. It is difficult for one person to get financial freedom. So, if you have a full-time job, keep your full-time job, and start a part-time business. Some people work 8 hours a day, so I have no spare time. Well, yes, you have, if you broke it out. How much time are you spending on your iPhone? How much time do you spend on your TV? And do you use this time to do business?
Keep your expenses low and start buying real estate to increase your asset column. If you increase your asset column, it will help you on your way to achieving financial freedom. If you have a full-time job, then you need to start a business that requires less time to work, like:
Businesses that do not require the presence
Stocks
Bonds
Income-generating real estate
Any Online business
Notes (IOUs)
Anything that has value, produces income or appreciates, and has a ready market.
Always buy assets, not liabilities. Even don’t buy a car. Your car is also a liability and it has maintenance costs, fuel costs, and much more. It will also drop its value once you purchase it. So buy more real estate or businesses that put money into your pocket.
4. Financial Intelligence:
The gathering of information about the financial affairs of entities of interest to comprehend their nature and capabilities, as well as predict their intentions, is known as financial intelligence.
Financial intelligence is made up of four main technical skills:
Accounting: Accounting is the ability to read numbers. It is the technical skill in which a person can understand whether this company is good or not for investing. This is an important skill if you want to build businesses or investments.
Investing: Investing is the science of making money.
Understanding markets: Understand markets is a science of supply and demand.
The law: The law is the awareness of accounting, corporate, state, and federal regulations.
You need to learn about these four technical skills because great opportunities are not seen through your eyes. They are seen in your mind.
So work on your mind by learning new things like accounting, investing, and markets, reading business books, reading the law, and reading business news. These activities will change your mind, and your mind will start to see opportunities that others miss.
5. Overcoming Obstacles:
The primary difference between a rich person and a poor person is how they manage fear.
One of the main reasons why people have failed to build assets is because of some obstacles. These obstacles should be removed if anyone wants financial freedom. These obstacles are:
Fear: Everyone has a fear of losing money. Even the rich also have fear of losing their money and it is a general problem. It’s about how you handle problems. For most people, the purpose they don’t win financially is because the pain of losing money is far greater than the joy of becoming rich. Failure encourages winners and failure overthrown losers.
Cynicism: Cynicism keep most people poor and playing safe. The real world is only waiting for you to become wealthy. Only one's doubts keep them in poverty. It is technically simple to exit the Rat Race. It doesn't take much education, but most people's doubts are crippling.
Laziness: The most common form of laziness is laziness by staying busy. The only way to overcome it is to focus your attention on the task at hand, get up, and finish it. Begin developing the self-discipline you'll need to achieve your objectives right now.
Bad habits: Our lives are a reflection of our bad habits more than our education. Most people have a habit of paying themselves at last and this is not a good habit. If you pay yourself first, you will get financially stronger, mentally and fiscally.
Arrogance: Many people use arrogance to try to hide their ignorance. When you know you are ignorant of a subject, start educating yourself by finding an expert in the field or a book on the topic.
The key to Financial Freedom:
The key to financial freedom and great wealth is a person’s ability to convert ordinary income into passive income. This ability will be a reason for you to get financial freedom.
1. Don’t work for money:
Rich don’t work for money. If you work for money, your mind will start thinking like an employee. If you start thinking differently like a rich man, you will see things differently. Rich works on their asset column, every dollar in their asset column is their hard-working employee.
2. Don’t be controlled by emotions:
Some people’s lives are always controlled by the two emotions of fear and greed. Fear keeps people in this trap of working hard, earning money, working hard, earning money, and hoping that it will reduce their fear. Secondly, most of us have the greed to get rich quickly. Yes, many people become rich overnight, but they have no financial education. So educate yourself and don’t be greedy or fearful.
3. Acquire assets:
Don’t buy liabilities on your way to financial freedom. People buy liabilities and think these are assets, but they are not. Many people buy luxuries first, like big cars, heavy bikes, or big houses to live in. But the rich buy assets and their assets buy luxuries. The rich buy houses and rent them, and they pay them for their Lamborghinis. The poor or middle class buy luxuries first, and the rich buy luxuries last.
4. Remember the KISS principle:
KISS stands for keeping it simple, stupid. Don’t be too overload your mind when you are going to start your way to financial freedom. Things are simple and keep them simple. The simple thing to remember is assets put money in pocket and liabilities take money out of pocket. Always buy assets so they put money into your pocket.
5. Know the difference between assets and liabilities:
Assets are anything that puts money in your pocket, like stocks, bonds, real estate, mutual funds, rental properties, etc. Liabilities are anything that pulls money out of your pocket, like your house, your car, debt, etc. People think their home is their biggest asset, but it is not. A house is an asset when it generates money like when you rent a house, it generates money, and when your life in that house becomes a liability.
6. Don’t be a financial illiterate:
A person can be highly educated and become successful in their profession, but financially illiterate. Financial education is very important for any individual. Our schools and colleges did not teach us financial education. Many financial problems arise as a result of a lack of financial education. Start learning financial education and I suggest you read the book "Rich Dad, Poor Dad".
7. Increase your Wealth:
Wealth is defined as a person's ability to survive for a certain number of days in the future, or how long they could survive if they stopped working today. Consider your wealth and whether you would survive if you stopped working today for a year.
8. Mind your own business:
If you have a job, keep your job and start a part-time business and work it. Use the time that you spend on your iPhone, parties, or any other activity, to build your business. Never leave your job until you build your own business. Don’t struggle all of your life for someone else. Start your own business and grow your business.
9. Train your mind:
Your biggest asset is your mind. Many individuals watch opportunities with their eyes, but if you train your mind, you can see opportunities with your mind. If you train your mind well, it can create enormous wealth.
10. Learn technical skills:
Your financial IQ will be raised by learning these four technical skills:
Accounting is defined as the ability to read numbers. If you want to build an empire, then this is an essential skill. By learning this skill, you will be able to understand the strength and weaknesses of a business.
Investing: It is the science of making money.
Understanding markets: It is the science of supply and demand.
The Law: A person who has knowledge of the law of tax advantages and corporations can get rich faster than others.
11. Find opportunities that everyone else missed:
"Great opportunities are not seen with your eyes. They are seen with your mind. "
You can see many more opportunities with your mind than many people miss with their eyes. It is not rocket science, you just need to train your mind.
12. Learn to manage risk:
Investment is not risky, not knowing the investment is risky. If you want to reduce the risk, then increase your knowledge. This knowledge will not come by going to college, it will come by reading books or sitting with people who know the investment.
13. Learn management:
The main management skills are:
Management of cash flow
Management of system
Management of people
Sales and marketing are the most essential skills. The ability to sell and the ability to communicate with another human being, be it a customer, employee, fiancé, friend, or child, is a basic skill of personal success.
14. Manage fear:
“Failure inspires winners. Failure defeats losers.”
Everyone has a fear of losing money. It is a general thing. The rich also have a fear of losing money, and most rich people lose a lot of money. But the main difference between the rich and the poor is how they manage fear. For many people, the fear of losing money is much more terrifying than the joy of having money.
15. Find a reason:
Everyone wants to be rich, but many of us don’t want to struggle. People often ask me why I want to be rich. I answered that I don’t want to die poor. Choose your reason, like you want to help others, you want to build hospitals or you want to travel freely. If you don’t have a reason, then it is difficult to stay on this path.
16. Choose friends carefully:
Do not choose friends by watching their financial statements. Choose friends from among the rich as well as the poor. Learn from both. Both will tell you the best lessons but choose carefully.
17. Pay yourself first:
If you cannot get control of yourself, then it is difficult to get rich. If you lack management, then it is difficult to be rich. First, pay yourself. People often buy cars or luxuries when they have money. On the other hand, the rich buy assets, and their assets buy luxuries for them.
18. Use assets to buy luxuries:
When you get paid by your job or when you earn some money, don’t buy luxuries first. Buy an asset and your asset will pay you for your luxuries. Poor buy luxuries first and the rich buy luxuries last.
19. Understand the power of giving:
“God does not need to receive, but humans need to give.”
If you want money, start giving money. If you give, you will receive more than you give. Always do charity in your life. It should be your habit.
20. Read books:
In this book, Robert mentions many books that you need to read. Reading books will open your mind and you will learn too many things. I suggest you read all the books by Robert T. Kiyosaki. This will open your mind and may give you a good direction in your life.
Thanks for reading. Help others who you think need to read this to help themselves.
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