"Rich Dad, Poor Dad" By Robert Kiyosaki Book Review: Profile Traders
The title is intriguing and draws people’s attention to the book.
The title let’s out early enough that you are up to read about some life lessons a Father would give his child.
You are about to understand the importance of money and how you need to have money work for you.
Boon or Bane
Robert grew up with a contrasting point of view, as he says in his book. He was advised by a Rich Dad and a Poor Dad, which helped him see both views, comparing them before choosing. How would you choose between these two?
Excess money is the root of all evil, or lack of money is the root of all evil.
Most of us are thought about money at home and not in school. This is one of the main reasons the rich get richer, the poor get poorer, and the middle class struggles with debt. He beautifully highlights how a different way of thinking can change what you do and achieve.
A simple example is the thought “I can’t afford it” blocks your thought process completely, and “How can I afford it” makes you start thinking about how.
Money can come and go, but if you have the financial education on how it works, you gain power over it and begin building wealth.
The Rich Don’t Work For Money
You are only poor if you give up. The most important thing is to make an effort. Being able to make quick decisions is an important skill. Life teaches you lessons without having to talk to you. It just pushes you around. Each push says, wake up I want to have something for you to learn.
Most people want everyone around the world to change but them. It is easier to change yourself rather than try to change others. The single biggest thing that separates the poor from the rich is that the poor and the middle-class work for money, and the rich let the money work for them.
When it comes to money, most people want to play safe and secure. So passion does not direct them, fear does. It is easier to learn to work for money; that’s what they teach you in schools. Fear becomes the primary emotion in the subject of money being discussed. It is fear that keeps most people working at a job.
Most people feel more money will solve money problems, but that’s not the case. Lack of financial education is the problem. Every person has a weak and needy part of the soul that can be bought. Every individual had a part of the soul that was resilient that could not be bought. It was only a question of which one was stronger.
People who work for money are part of the rat race. They are controlled by two strong emotions, fear and greed. Offer them more money, and they increase their spending, giving birth to the pattern that keeps repeating. They keep working harder, wanting to earn more to spend more.
A job is only a short-term solution to a long-term problem. To live a life dictated by the size of the paycheck is not living a life. You should always learn to think when you have emotions, not think with emotions.
Is Financial Literacy Important?
Robert rightly says that financial literacy is important because too many people are focused on money. They have simply not learned to create assets to work for them. This was the exact lesson he had learned from his Rich Dad.
“Money without financial intelligence is money soon gone.”
People should realize it’s not about how much money you make but how much you can keep. It’s about how many generations you can keep it. Most people keep on piling up liabilities thinking they are buying assets. They simply don’t know the difference between assets and liabilities.
The author does not shy away from saying that the poor and middle class pay high taxes while the rich barely pay the minimum amount of taxes to the government. Financial struggles are a result of you working for someone else all your life.
Robert says that people who have learned to work for money end up working for others all their life. They fear taking risks, whereas the Rich takes calculated risks. He gives examples of people who have made billions and the ones who fear to even look at opportunities.
“The rich focus on their assets column, and the rest focus on their income column.”
Money and Obstacles
Robert claims that we all have tremendous potential but the one thing that holds us back is the degree of self-doubt. Lack of self-confidence and the ability to take risks separates the rich from the rest. In the real world, your degree and knowledge are not all that is required, it is something more that separates you from the rest.
Financial literacy simply gives you more options; Robert used to tell his students. The excess of fear and self-doubt kills the genius in you. He explains how his investment in his financial literacy helped him make the best of the opportunities he got in 1990.
When everybody was staring at a period of gloom, he stepped up his investments in real estate. He opted to shop for real estate not at broker houses but at the bankruptcy attorney’s office or courthouses. You could get them at much lower prices and once the properties were legally his, he could simply sell them off in minutes at times.
He talks about a strong financial foundation that is made up of 4 technical skills of financial intelligence.
Accounting – The ability to read numbers
Investing – The science of money making money
Understanding markets – The science of supply and demand
The law – Know absolutely what is right
The safer and more secure investment you choose to make, the lesser returns you get to make. The smarter you are, the better chance you have to beat the odds. The primary difference between rich and poor people is how they manage fear.
Some of the valuable lessons Robert learned from Rich Dad were:
It was okay to go broke before you were thirty. You still had time to recover.
Job is an acronym for just over broke.
Don’t buy luxuries using assets rather, buy from returns from assets.
Play to win, don’t play to not lose
Losers avoid failing, and failure turns losers into winners.
Conclusion
If you are a person who wants to understand the importance of money, then this is the book you should read through.
The author has penned the book in simple language, attempting to reprogram your mind to let money work for you like the way the rich do.
Get your copy of the book now.
(Amazon Paid Link)
Guest Post - Written by Mr. Lal Bajaj, Bangalore
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