Book Review Wednesday: Rich Dad, Poor Dad- Robert Kiyosaki

This a true life story of two jolly friends; Mike and Robert who at the age of nine decided to start their journey of becoming rich in life. Robert’s dad is the highly educated but Poor Dad while Mike’s dad is the less educated but Rich Dad. After been rejected and classified as poor children, both Robert & Mike decided to meet the Rich Dad asking him to teach them how to become rich. Rich Dad bargained with the duo to work for him every Saturday paying them 10c/hour as a prerequisite to teaching them how to become rich. After few weeks, both friends decided to quit the job because the pay was very low. Angrily, Robert went to his Rich Dad who (as he thought) has been exploiting him by making him work hard, paying him less and teaching him nothing. Rich Dad explained he wasn’t going to teach them the way they’re being thought in school instead he’ll teach them the way life teaches. ‘Life’, he explained, ‘is the best teacher’. Here are the basic lessons both friends learned that changed their lives;
Lesson 1 – The Rich Dont Work For Money: Most people get angry at their boss not realising it was ‘fear’ that had enslaved them to the job and to money. Better it is to make money work for you instead. Many people work hard, get paid and that’s all, they wonder why they have money problems and they think more money will solve the problem. No! More money will not solve the problem but financial education will. Instead of working for money, learn how to make money work for you. Most people have a ‘price tag’ because of human emotion which is fear & greed. First, the fear of being without money motivates us to work hard and once we get that money, greed gets us to start thinking about all the wonderful things money can buy. They get up every day, go to work and paying their bills running into a trap race called ‘The Rat Race’.
Lesson 2 – Why Teach Financial Literacy?: Many people ask, ‘How do I become rich?’, ‘How do I become financially free?’. The answer is, get a strong foundation of financial literacy. Know the difference between Assets & Liabilities. The rich buy asset while the poor buy liabilities thinking they are assets. An asset is something that puts money into your pocket and a liability is anything that takes money out of your pocket. If you want to become rich, spend your life buying assets and if you want to be poor, spend your life buying liabilities. Your house is not an asset; it’s a liability unless you receive rent from it.
Lesson 3 – Mind Your Own Business:Most people work for everyone but themselves; they work for the owners of the company, the government through taxes and for bankers that owns their mortgage. Financial struggle is the result for people working all their lives for someone else. There is a big difference between your profession and your business. To become financially secure, you need to mind your own business. Your business revolves around your assets not your income or job. Start minding your own business. Keep your job but start buying assets or start building one. Types of assets; Business that do not require your physical presence (if it requires your presence, then its a job), Stocks, Bonds, Mutual Funds, Income generating Real Estate, Notes from IOUs, Royalties from intellectual properties like musics, scripts, books etc and anything that has value, produces income, appreciates and has a ready market.
Lesson 4 – The History Of Taxes & The Power Of Corporations: Initially, tax was levied to pay for war in the 17th Century and early 18th Century. In 1874, England made income tax a permanent levy on its citizen. In 1913, income tax became prominent in the USA. Historically, tax was levied against only the rich to punish them, this made the masses voted for the law and it became constitutionally legal. Although it was intended to punish the rich but in reality, it ended up punishing the people that voted for it – the poor & middle class. Thereafter, the Government appetite was so great that the tax needed to be levied on the middle class and then the poor. It is the knowledge of the power of corporation that gave the rich a vast advantage of tax over the poor and the middle class. No matter what the socialist came up with, the rich always find a way to outsmart them because the rich understands the power of money which is a subject not taught in school. Today, many people work up to 5-6months for the government (through taxes) before they make enough for themselves. The harder you work, the more you pay to the government. The only way to get out of the slavery is through a proper financial IQ. Financial IQ is made up of knowledge from four broad areas of expertise;
Accounting (Financial Literacy): The more money you are responsible for, the more accuracy is required. The ability to read financial statements.
Investing: The Science Of Money Making Money which involves strategies and formulae.
Understanding Markets: The science of supply and demand. There is a need to know the technical aspect of the market which is emotional driven.
Understanding The Law: An individual with a knowledge of tax advantage and protection provided by a corporation can get rich so much faster than someone who is an employee or a small business sole proprietor.
Lesson 5 – The Rich Invent Money: We all have tremendous potentials and we are all blessed with gifts yet, the one thing that holds us back is some degree of self-doubt, the lack of self-confidence. Excessive fear & self doubt are the greatest distracters of personal genius. After school, in the real world, its not the knowledgeable and the smart that get ahead but the knowledgeable and the bold. Learn to take risks, be bold, let your genius convert that fear into power. Some people always want to play it safe when it comes to the subject of money. We’re in the information age and the person who owns the information owns the wealth. Information travels around at the speed of light. At this age, there will be vast increase in the number of millionaires around the world. There will also be people who will be left behind. To be financial intelligent means creating your own luck, you can take whatever happens to you financially and make it better. If you want to create money or luck instead of working for it, then financial intelligence is important. The more real you think money is, the harder you work for it. If you can grasp the idea that money is not real, you will grow richer faster.
Lesson 6 – Work To Learn, Dont Work For Money: The world is filled with smart, talented, educated & gifted people and we need them everyday but do you know that less than 5% of Americans earn less than $100,000 annually? These people are one skill away from great wealth. They only need to learn and master one more skill; Financial Intelligence, and their income will jump exponentially. Workers Work Hard Enough Not To Be Fired & Owners Pays Just Enough So That Wokers Wont Quit. Always look forward to work for what you will Learn not for what you will Earn. It is often recommended that you join a Network Marketing (MLM) company to learn sales skills. The most important specialized skills are sales & marketing. The ability to communicate with another human being is the basic skill of personal success. It is better to know little about a lot and work with smart people as a team.

Getting Started

How do I get started you asked? There is a financial genius within us that we are yet to awaken because of our fear. Here are ten steps to awaken this genius & get started;

1. You need a reason greater than reality: The real compelling reason or purpose why you want to be rich.
2. Choose daily to be rich with every dollar (money) that comes into your hand. Have good spending habits.
3. Choose friends carefully.
4. Pay yourself first ( The Power of Self-Discipline): If you cannot control yourself, don’t try to get rich. Keep your expenses low, build up your asset then buy luxuries (cars, house etc) later.
5. Pay your brokers well: A good broker (Real estate or Stock broker) should provide you with good information & in turn pay them well.
6. Be an Indian giver (The Power of Getting Something for Nothing): Always know your Return Of/On Investment (ROI)
7. Assets buy luxuries: Don’t buy your luxuries on credit, instead use the income from your asset to buy luxuries and pay for it at once.
8. The need for heroes: Mentors don’t only inspire us, they also make things easy and this convinces us more to want to be like them – ‘If they can do it, so can you’. Get a mentor.
9. Teach and you shall receive: Rich Dad said; ‘If you want something, give it out first and it will come back to you in buckets’.

For more on how to get the book visit: www.amazon.com

Author: Robert T. Kiyosaki
Book Reviewed By: Bosyde Princessa
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