Rich Dad, Poor Dad

 

What did I learn from the book "Rich Dad, Poor Dad"?

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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• 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, 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 the laziness of 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.