I’ve been tired of working 9 hrs a day for money. I have an extreme desire of not having to think about money while spending. But I won’t be able to fulfill my desire if I go on doing what I’m doing and how I’m doing it. That’s the reason why I haven’t been able to get financial freedom.
So, while I was going through these thoughts and asking for suggestions. I was referred this book “Rich Dad Poor Dad” written by Robert Kiyosaki.
What the Rich Teach Their Kids About Money-That the Poor and the Middle Class Do Not!
Robert Kiyosaki, Rich Dad Poor Dad
To be honest this book has helped me a lot in understanding money. Here I’ve listed some points from each chapter that I thought would be helpful.
Important Points from each chatper:
- The Rich don’t work for Money
- The poor & middle class work for money. The rich have money work for them.
- People’s lives are forever controlled by two emotions: fear and greed.
- See what others Miss.
- Why Teach Financial Literacy:
- It’s not how much money you make. It’s how much money you keep.
- Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets.
- Asset puts money in my pocket. A liability takes money out of my pocket.
- An Employee works for company, government and bank.
- Mind your own business
- The rich focus on their asset columns while everyone else focuses on their income statement.
- Financial struggle is often the result of people working all their lives for someone else.
- Start minding your own business. Keep your daytime job, but start buying real assets, not liabilities.
- The History of taxes and the power of corporation
- “My rich dad just played the game start, and he did it through corporations” – the biggest secret of the rich.
- If you work for money, you give the power to your employer. If money works for you, you keep the power and control it.
- “Each dollar in my asset column was a great employee, working hard to make more employees and buy the boss a new Porsche.”
- The Rich Invent Money
- Often in the real world, it’s not the smart who gets ahead, but the bold.
- Games reflect behavior. They are instant feedback systems.
- The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth.
- The problem with “secure” investments is that they are often sanitized, that is, made so safe that the gain are less.
- It is not gambling if you know what you’re doing. It is gambling if you’re just throwing money into a deal and praying.
- Great opportunities are not seen with your eyes. They are seen with your mind.
- Two types of investors, one who creates investment and other who invests on them.
- How to create investment:
- Find an opportunity that everyone else missed.
- Raise money
- Organize smart people.
- Work to Learn – Don’t work For Money
- Job Security meant everything to educated dad, Learning meant everything to rich dad.
- “You want to know a little about a lot” was rich dad’s suggestion.
- Job is an acronym for “Just Over Broke”, workers work hard enough to not be fired, and owners pay just enough so that workers won’t quit.
- Management of cash flow, system and people are the most important management skills.
- Most important specialized skills are sales and marketing:
- The ability to sell.
- The ability to communicate to another human being be it a customer, employee, boss, spouse or child.
- Communication skills such as writing, speaking and negotiating are crucial to a life of success.
- Overcoming Obstacles
- Overcoming Fear:
- For most people, the reason they don’t win financially is because the pain of losing money is far greater than the joy of being rich.
- Failure inspires winners. Failure defeats losers.
- Overcoming Cynicism:
- “The sky is falling! The sky is falling!”
- All of us have doubts which paralyze us.
- It’s those doubts and cynicism that keep most people poor and playing safe.
- Overcoming Laziness:
- “I can’t afford it” shut down your brain. “How can I afford it?” opens up possibilities, excitement and dream.
- Greed Beats Laziness.
- Overcoming Bad Habits:
- If I pay myself first, I get financially stronger, mentally and fiscally.
- Overcoming Arrogance:
- What I know makes me money, what I don’t know loses me money.
- Overcoming Fear:
- Getting Started
- Find a reason greater than reality: the power of spirit.
- Make daily choices: the power of choice.
- Choose friends carefully: the power of associations.
- Master a formula and then learn a new one: the power of learning quickly.
- Pay yourself first: the power of self-discipline.
- Pay your brokers well: the power of good advice
- Be an Indian giver: the power of getting something for nothing.
- Use assets to buy luxuries: the power of focus.
- Choose heroes: the power of myth.
- Teach and you shall receive: the power of giving
Short Notes:
- See what others Miss.
- Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets.
- Start minding your own business. Keep your daytime job, but start buying real assets, not liabilities.
- Four broad areas of expertise for financial IQ:
- Accounting
- Investing
- Understanding Markets
- The Law
- It is not gambling if you know what you’re doing, it is gambling if you’re just throwing money in a deal and praying.
- How to create investment:
- Find opportunity that others missed
- Raise money
- Organize smart people
- “You want to know a little about a lot.” was rich dad’s suggestion.
- “I can’t afford it!” shuts down your brain. “How can I afford it?” opens up possibilities, excitement and dreams.
- Greed beats laziness.
- Every time I have been arrogant, I have lost money.
- Choose friends carefully: the power of associations.
- Brokers Rich = You more rich.
- The sophisticated investor’s first question is: “How fast do I get my money back?”
- To be the master of money, you need to be smarter than it.
- Choose heroes: the power of myth
- If they can do it, so can you
- Poor people are more greedy than rich people.
Some To-Do’s
- Find someone who has done what you want to do.
- Take classes, read and attend seminars.
- Make lots of offer.
- Jog, walk or drive a certain area once a month for 10 minutes.
- Look for people who wants to buy first. Then look for someone who wants to sell.
- Action always beats inaction.
Key to Financial Freedom
- A person’s ability to convert earned income into passive and/or portfolio income.
- Take Action: Invest on mind & learn to acquire REAL assets.
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