The main reason people suffer financially is because they spend their lives on education without learning anything about money.
Summary of Rich Dad, Poor Dad
It is a book written by the American writer Robert Kiyosaki. Its theme focuses on the importance of financial independence and wealth creation by explaining various means such as investment; asset ownership and its use, starting a business project, and how to increase financial intelligence to improve financial and business performance. Generally, the book is divided into 10 chapters that are structured around 6 lessons that every person should learn from money; how to acquire it and how to manage it.
What is the difference between these two fathers?
The rich father, poor father comes from an idea that the poor father gets away from the means of earning money by saying he can’t do it; then moves into a stable boarding house, as a refuge from the spectre of poverty and destitution. While the rich father seeks to learn methods to earn money and develop it. This means that the collection of money is linked to the ability of the mind to learn; then to the courage to manage risks and to enter into these areas towards the construction of investments and the creation of enterprises and employment of third parties.
Robert Kiyosaki argues that earning money from work alone will not lead to financial freedom or wealth; but it is achieved through a diligent pursuit – through knowledge and practice – of creating multiple sources of income. Here are the most important lessons from the book Rich Father and Poor Father and the solutions to improve our financial situation:
Difference between assets and liabilities
On the simplicity of this rule; you will find that many people are unaware of it. So they suffer financially and fall prey to debt, bankruptcy and poverty. According to Kiyosaki, assets are things that put money in your pockets. Whereas liabilities (bonds) are things that take money out of your pockets.
The book says that wealth is the amount of returns you get from assets, compared to expenses, and liabilities. The more money goes to buy assets, the higher the returns and the greater the cash flow. When the flow of money is greater than expenses, liabilities, you will be richer. Unlike people who do not invest in assets and tend to buy luxuries whenever their income is available, they are more likely to go into debt and are more susceptible to financial crises.
Employment never builds wealth
Kiyosaki says, “Spending all your time and effort in a job to earn money, which will flow out of your hands as soon as you get it, is not a sign of intelligence. He also states that prestigious and safe work is an illusion; it was unconsciously implanted and inherited by our fathers in our minds; who believed it to be a refuge and fortress against the surprises of time. Robert, in his book alarms all the employees of the Earth, stating: “No matter how you were promoted to a prestigious job; the day will come when you will become a useless old man; you should be changed by someone else! So ask yourself; why do you want to climb the ladder of your career and not try to get the whole ladder? Why do you work in a company when you can own it? ».
Gaining Investment Knowledge
In his book Rich Dad and Poor Dad, Robert says that the problem with the middle class is that they learn a skill to work for money, but not to make money work for them. That’s why Robert calls for learning to invest and learning about money and business management.
What kind of investment?
“You may not have the money, but you own your time, you own a lot of it, and you are free to do what you want. The first investment you make is your time, which must be spent learning; learning the rules and laws about money, and anything else you can do to increase your income and your ability to invest. He says “Don’t enter the arena of life fearing failure, enter to win. he added. So, again according to Robert Kiyosaki, the greatest risk you face in life is to seek safe options and move away from risk altogether. Not taking risks is a risk in itself! But if, by your nature, you like to be cautious, less adventurous; that’s fine, opt for safe investments, but start early and quickly to take the train.
Planning for the future starts now
The rich father and the poor father see planning for the future as one of the most important requirements for wealth and financial freedom. Many people see their work as a secure source of income instead of assets. What about after retirement, when a person cannot rely on a fixed monthly income?
Third World and Arab countries generally depend on pensions, which do not guarantee a good quality of life. On the other hand, working people will always generate money, which can be a constant source of income without effort or hard work. Thus, millions of people remain rich even as they age.
The book of the rich father and the poor father teaches us never to be afraid to take risks; and never to think about what people might say or think about you or your life. Don’t follow the flock and stick to your plans, even if everyone else does the opposite.