Two years ago I decided to read the bestseller of Robert Kiyosaki "Rich Dad Poor Dad." I read 2 versions of this book: for teenagers and classic one. Second one includes more practical ideas and thoughts, but on those time I didn't take it so serious.
Here we go again! After 2 years I am back to the game:) I wanted to refresh my knowledge and read it from the different angle.
This book has popularity all around the world. But what is the secret of success?
Key points and questions:
* Fear is not related to society, this does not allow us to leave the “rat race” and become rich.
* Fear and greed can encourage financially illiterate people to make irrational decisions.
* Despite the fact that financial literacy is necessary for personal prosperity.
*Financial self-education and a realistic assessment of your current financial situation are the first bricks of wealth building.
*To become rich, you need to learn how to take risks.
* You need to maintain motivation.
They can face poverty even of financially literate people.
* Invest in assets that will add some money to your pocket and avoid liabilities that take money from you.
* Work will help you pay the bill.
* Understand the tax code to minimize tax payments.
So, the main idea of this book:
A successful person needs a high financial IQ. Thinking is your main asset.
Practical tips:
A good way to motivate yourself is to spend some money on yourself before paying bills.
Start building a business at the same time as your main job.
About the author
Robert Kiyosaki is an investor and entrepreneur. His fortune is estimated at more than $ 80 million. Under the Rich Dad brand, more than 15 books on financial self-education have been published. More than 26 million copies of his books have been sold.
Fear of disapproval from society does not allow us to get out of the “rat race” and become rich.
Most of us know what the term “rat race” refers to.
You work hard, while others - the government, collectors and your superiors - derive the main benefit from your work. So why do we keep running?
This happens because the life of most people is controlled by the fear of social disapproval.
The truth is that you can study hard, finish a good school, a prestigious university, get a well-paid job, but without any opportunities for financial growth, because you will still be in the rat race. The same principle of your boss getting rich, while you are working hard to let him do it as long as it’s possible.
Fear and greed can push financially illiterate people to make irrational decisions
When it comes to money, any person, whether rich or poor, experiences two basic emotions: greed and fear. If he is a rich man, then he thinks about what else he can buy (greed). If this is a poor man, then he worries that he will never have enough money (fear).
For people who have no idea how to manage their financial budget, there are these two emotions that guide the decision-making process.
Despite the fact that financial literacy is necessary for both personal and social prosperity, no one teaches us how to be successful in it.
Most people believe that in order to become rich, it is enough to be talented and capable. But in fact, the world is full of such people, and most of them are poor. They lack financial literacy and a comprehensive knowledge of how does money work.
Children are not taught how to save or invest, and as a result, they grow up without any idea of basic things.
Lack of financial skills is a problem not only for young people, but also of adults with higher education, many of those make the wrong decisions about money.
Financial self-education and a realistic assessment of your current financial situation are the first bricks of wealth building.
You can start the path to wealth at any time, but the sooner the better.
But regardless of age, the best way to start is to evaluate your current finances, set goals and then acquire the necessary knowledge to achieve these goals.
To become rich, you need to learn how to take risks.
Madness is doing the same things over and over again, expecting different results. If you follow this logic, then in order to change the current financial situation, you must begin to manage your finances differently.
One of the most important changes that you must make is to learn how to take risks. All financially successful people took risks in order to achieve what they have today, and they are successful precisely because they have learned to control this risk, and not be afraid of it.
In order to start generating large amounts of income, you need to take on great chances and consider the possible risks that they may indirectly contain.
The path to wealth is long, so you need to keep motivation.
In order to achieve your financial goals, you need to find ways to maintain the necessary level of motivation, even in the face of failure. One way to maintain motivation is to create “want” and “don't want” lists.
For instance:
* I do not want to live in poverty, like my parents.
* I want to get rid of all my debts within three years.
Open these lists every time you need a reminder of why you should not turn off from your path to wealth.
Another good way to maintain motivation is to spend a certain amount of money on yourself before paying bills.
First you need to pay yourself; when the time to pay bills comes, it will encourage you to start looking for additional sources of income to cover both needs.
This method will also help you form and develop financial self-discipline, which is one of the key character traits of financially successful people.
Laziness and arrogance can push even financially literate people into the abyss of poverty
Laziness and arrogance work against you, but their action is not obvious.
Laziness is usually perceived by us as doing nothing, but in fact laziness is not necessarily a lack of activity, it can also be avoiding those things that need to be done.
Arrogance is also very destructive. Unlike our usual definition of the word, in the event of a financial collapse, it can be defined as “ignorance plus selfishness”: a combination of a lack of financial knowledge and pride that does not allow this to be recognized.
Invest in assets that will add money to your pocket and avoid liabilities that take money from you
To make serious investment decisions, you need to know the difference between an asset and a liability.
If it’s quite simple, then an asset is what brings you money, and a liability takes away.
Assets are business, stocks, bonds, real estate, debt receipts, fees from intellectual property and everything that has value, generates income and can be easily sold to other people.
The goal is to make your income exceed your expenses as much as possible so that
be able to reinvest free income into other assets, thus generating even more money.
Work will help you pay bills, but only business can make you rich
Most people think that work and business are almost the same thing. But when it comes to finance, a significant difference comes to light:
Work is what you do 40 hours a week in order to pay bills, buy food home and cover other living expenses. As a rule, the work has the name "restaurant director", "seller", etc.
Your business is what you invest time and money in order to grow your own assets.
Since work only covers your expenses, it is unlikely that it will ever make you rich. In order to make a fortune, you need to start building a business at the same time as your main job.
Practical tips:
Why do people get stuck in rat race?
* Fear of disapproval from society does not allow us to get out of the “rat race” and become rich.
* Fear and greed can push financially illiterate people to make irrational decisions.
* Despite the fact that financial literacy is necessary for both personal and social prosperity, no one teaches us this.
How to increase your income and move to a higher standard of living?
* Financial self-education and a realistic assessment of your current financial situation are the first building blocks of wealth building.
* To become rich, you need to learn how to take risks.
* The path to wealth is long, so you need to maintain motivation.
* Laziness and arrogance can push even financially literate people into the abyss of poverty.
How do successful investors think?
* Invest in assets that will add money to your pocket, and avoid liabilities that take money from you.
* Employment will help you pay bills, but only business can make you rich.
* Understand the tax code to minimize tax payments.
Additional ideas:
* If you want to get a result, start now.
* Write in two columns all your monthly expenses and income, as well as all your assets and liabilities.
* Find a way to meet people who are already doing what you want to do.
This is one of those books after reading which you will want to write down a lot of ideas and theories concerning financial literacy and attitude to money and wealth. So I advise it to everyone who hasn't read it yet.
