“THE SINGLE MOST POWERFUL ASSET WE HAVE IS OUR MIND. IF TRAINED WELL, IT CAN CREATE ENORMOUS WEALTH.” – ROBERT T. KIYOSAKI
When it comes to finance, money management, and asset creation, we can find hundreds and thousands of books and lessons written on the subject. But if there is a book that not only made history but was also considered one of the best in the segment, That’s none other than ‘Rich Dad, Poor Dad‘ written by Robert T. Kiyosaki. You can learn great lessons from “Rich Dad Poor Dad” that is tried and tested. ‘Rich Dad Poor Dad’ released in 1997. We often find financial literacy lessons boring, but this is not the case with ‘Rich Dad Poor Dad’. the writer has shared his own story and discusses the lessons of his rich dad and his poor dad.
considered the best financial management book
‘Rich Dad, Poor Dad’ is often considered the best financial management book ever written, and some call it the Money Making Bible and Money Management Formula. Anyone who has read lessons of the book finds it motivating and the best formula for financial freedom. if you practice the recommended formula, you can see the financial wonders of your life. We all work for financial freedom but only a few get success and money work for them. In this book writer primarily focused on how to create an opportunity and make your money work for you.
We often find a luxurious lifestyle, expensive cars, and high-end gadgets a sign of success, but this book changes that concept. we can learn that most people work for money, but the rich make money work for them and that it’s not how much money you make — it’s how much you keep. Robert T. Kiyosaki busts many myths in the book and establishes a clear understanding of financial education.
Although each and every page of the book educates you to learn a lot about financial Intelligence, there are some lessons you can learn to get the highlights of the book:
Lesson 1. It’s not how much money you make that matters, it’s how much money you save
We all earn money to live happily and achieve our long-term goals. however, what we often do is to save the minimum amount of our earnings as savings. we save after deducting our monthly bills, household products, fuel expenses, etc. For example, if you earn $ 2,000.00 and spend $ 1,800.00 as an expense, you save $ 200.00. If you multiply your savings over many years and you still can’t save enough to finance your children’s education or for your retirement, that means you didn’t save enough while you were working.
so, the writer emphasizes more on saving money before you pay your bills and other utilities and household expenses. set a target, about how much you want to save from your salary to fund your long term goals. Also, keep in mind about the inflation rate that also increases as your salary, so save and invest wisely to beat the inflation.
“The wealthy buy luxuries last, while the poor and middle-class tend to buy luxuries first. why? Emotional Discipline.”
Lesson 2. The rich don’t work for money, rather money works for them
Most people want to stay at their job because they fear that they will not be able to pay the bills or have not enough money. They increase their expenses as their salary increases and they become financial slaves. since they depend on a single source of income that is the salary. Yet the rich work on a skill that made them valuable, and eventually money works for them.
Mr. Kiyosaki claims that the lower and middle classes work for their money, while the rich have money for themselves. So the lesson we can learn is, learn how money works, then find out how to do it, regardless of a paycheck. See how you can generate more income by investing your money wisely. And don’t give financial power to your employer, but maintain power by taking control of your money and making it work for you.
“The poor and middle-class works for money. The rich have money to work for them.”
Lesson 3. Become financially Intelligent and literate
When you don’t take your financial decision correctly, you suffer financially. Its important to become financially free but it’s more important to learn about financial intelligence first.
your ignorance towards financial education makes you worry about finances later in your life. Financial terms can be complex and overwhelming, but you can develop financial intelligence by reading about accounting and investing and staying informed about the markets. in the book, you can learn that lack of financial education is the cause f suffering due to finances. A little courage, risk, and technical knowledge of finance can make you a better decision-maker and financially intelligent.
“Intelligence solves problems and produces money. Money without financial intelligence is money soon gone.”
Above is the video where Robert T. Kiyosaki himself explains how important financial education is.
Lesson 4. Be brave, take risks, and be smart with experience
Most people never win because they are afraid of losing or failing. However, we often learn and improve by making mistakes, and failure is often part of the success process.
A college degree in finance won’t necessarily make you rich if you don’t have the guts and don’t understand how money works. Building wealth sometimes involves taking risks and dealing with a level of uncertainty. The trick is to be smart about when and how to take risks, being smart, and learning from your experiences to assess a situation, rather than diving in blindly. So, stop looking for your comfort zone, take a calculated risk that can help you build wealth, and be smart with every experience. Try strategizing your investments, prepare for your wealth-building journey, and achieving financial goals correctly.
“Successful people take big risks knowing that they might fall hard. but they might succeed more than they ever dreamed, too.”
Lesson 5. Stay focused and invent money
The author emphasizes focus. And he believes that if you are focused and work hard, you will achieve your goals and you will be financially free.
So, try to discover different legitimate ways to build wealth, seek opportunities, or invest in businesses to build more assets and generate a strong income stream. And use the income earned to generate more profit or wealth to lead to financial freedom. Sure enough, it should make money work for you.
“The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth in what seems to be instant.”
Lesson 6. Don’t confuse between Liabilities and creating asset
People often confuse and invest their hard-earned money to buy things that become a burden and do not add value. For example, when you buy a car with your savings, you think it is your investment, yet once you take your car out of the showroom, its value drops by 30% and goes down every year. Also, you have to spend your money on your car from time to time, on maintenance, fuel, etc., so basically your investment is depreciating. However, when you buy an asset like a house or invest in real estate, you create an asset. Going by the rate of inflation your home value keeps increasing and will give you great value in the long run.
Keep expenses and liabilities low so your money can be spent on asset purchases. Then when your assets generate income, you can use that money to buy the things you want.
“Rich people acquire assets. the poor and middle class acquire liabilities that they think are assets.”
We have discussed some important lessons that we find useful for everyone. However, there are many lessons in the book that teach us the value of financial literacy, investing, and risk taking in order to be wealthy and successful. We highly recommend that you read ‘Rich Dad Poor Dad’ and get the best formulas available, which are sure to help you not only by creating financial knowledge, but also motivate, guide and inspire you.