Key Takeaways from 'Rich Dad, Poor Dad'
Most people work for money — rich people have money to work for them. This lesson is considered by many to be mythical. However, this is true. Talk to someone about making money and the conversation will inevitably lead to jobs. That’s not a bad idea, not at the beginning of your life. The first step in building wealth is earning a basic income. If you cannot sell assets or money to the public, a job is the most convenient way to generate income.
But the difference between the rich and the poor is that the rich do not stay in office for too long. In contrast, others usually spend most of their lives at work. Once people believe that the only way to make money is through a job, they get stuck. This will prevent you from working for money for the rest of your life.
The rich are already learning the benefits of being business owners. Running a business is about learning how to use resources, and people to make more money than ever before. The rich use money to hire people, and earn profits. For example, as a business owner, you have faith in your abilities to make money. Once there, you can hire others or hire subcontractors to do the profitable work. In general, you are a business supervisor rather than a leader.
As the business becomes more profitable, you will invest some of those profits to build and increase revenue. If you haven’t read Rich Dad and Poor Dad yet, here are few key takeaways:
1. Take the risk and be wise through experience:
According to the book, the rich take risks because they find opportunities in life that make them billionaires. With the first investment, the author took the risk, earning a small condominium of 18,000 dollars in Hawaii, for which he received $ 25 per month. Although he did not make much money from it, he was skilled in all his dealings.
So, refrain from seeking mediation and take a calculated risk that will help you build wealth and become smarter in each experience. Try to strategize your investment and set yourself up on your journey to wealth creation and achieving the right financial goals.
2. Stay Focused (Mind Your Own Business):
Robert Kiyosaki, the author of rich dad and poor dad, talks about how a person should focus on the ultimate goal. It is this goal that can lead to financial independence. He emphasizes focusing on the goal and working towards it.
So, try to find different legitimate ways to build wealth or look for opportunities. Build more assets, create strong investments in businesses and find sources of income. Use the proceeds to earn more income or wealth, thereby leading you to financial independence. Effectively, you need to make money.
3. Rich people acquire assets — not liabilities they think are assets
One of the myths that many people have about wealth is that they all inherited their money. But that set of beliefs is completely self-defeating. Look at a person who is a self-made billionaire, he or she owns income-generating assets for most of their life.
This is the exact opposite of what others think. They adopt the consumer attitude of media and advertising culture and invest “money” in personal assets. A good example of this is the family home. Many consider it their greatest asset and allocate an unequal percentage of their income to earn and maintain it. A home can create value over time, it is not a property that generates income. Instead, owning a house costs you money to maintain it. It will be considered an investment once you sell it, and use the money earned to invest in another asset.
Many poor, middle-class families are heavily funded. Funded via equity lines at home, outstanding credit and second mortgages, are serial refinancing, consolidating first and second mortgages. Or withdrawing money once every few years helps them. The long-term effect is that as the value of the home increases, so does the amount of debt.
Non-revenue "assets" include cars, recreational equipment, furniture, recreational equipment, and resorts. It may seem good to own everyone but no one gets income. Stocks, bonds, investment funds, income-generating real estate, and businesses are common assets owned by the rich. What everyone has in common is that they can earn a steady income or increase the value of the same.
Over time, the growth of income-generating assets leads to higher returns. Gradually, the income from those assets is enough for the owner to live comfortably without having to work anymore.
4. Work for life skills rather than for money:
Robert thinks people are “a skill that comes from great wealth”.
Life skills such as communication, people management etc. are important for financial success. These skills are not part of the curriculum in schools. You need to acquire these life skills to help you on the path to financial freedom. Effective communication and people management skills make it easy to get meaningful information from your investment advisor.
Start investing after doing a market survey. Understand where you stand in terms of your finances, and what your goals are. Once you get a hang of things, you will be unstoppable, and maybe the next Jack Ma.