Rich Dad, Poor Dad
By: Robert Kiyosaki
Rich Dad Poor Dad is Robert's story of growing up with two dads - his real father and the father of his best friend, his rich dad - and the ways in which both men shaped his thoughts about money and investing. The book explodes the myth that you need to earn a high income to be rich and explains the difference between working for money and having your money work for you.
1. Don't work for money
The author’s first suggestion is to not work for money. This is quite a clique, but the idea is to find something you like. You will then work harder to understand the factors at work. You work because you’re interested and to learn.
2. Learn financial literacy
He explains it in a simple concept: Assets help increase your wealth while liabilities are things you own that makes you lose money. Thus the goal is to increase Assets and reduce liabilities following this equation: Assets > Liabilities + expenses.
3. Mind your business
Businesses are one way to own an asset, but if you don’t understand your business and its environment. It may become a liability. Similarly, other assets include: stocks, bonds, mutual funds, real estate and royalties. If you are not aware of how these operate, owning them maybe a liability.
4. Taxes and corporations
A permanent liability are taxes, they come in different names, but these are duties we all must pay to our government. We can only reduce the amount we pay and not fully cut it out. Now the author does not suggest tax fraud or evasion, but be aware of the tax laws and make sure you’re not over paying.
5. Inventing Money
The idea is to give value to assets: Burgers have given value to ground beef, words have given value to paper, cars have given value to oil. On the other hand, investors look for undervalued assets and put resources in them to increase in value.
6. Work to learn not earn
Soft skills are important for person to person interaction there are four skills imperative to a successful person. 1. Cash flow management, 2. Systems management, 3. People management and 4. Sales. Basically all the skills required to run a successful business.
“Failure inspires winners, failure defeats losers” It is an emotion, just like happiness and sadness. Kiyosaki explains that fear is an inhibitor, the fear of failure. Society has embraced success as hidden the failures. Truth is, success is a succession of failures.