Which book changed my financial orientation about starting, running and owning a business? Its “Rich Dad, Poor Dad”.
Rich Dad Poor Dad is a captivating book which teaches investing through the binoculars of a boy who learns the ins and outs of investing through the successes of his rich dad, and the failures of his poor dad.
The approach to investing in this book is full of stories and tips which make investing simple and easy.
It leaves you feeling ready to start investing and excited at the prospect of gaining financial independence with your new found financial literacy.
If you’ve gone through our recent post on real estate investing books for beginners, you’ll agree that the Rich Dad team has created lots of investing contents.
Why Read Rich Dad Poor Dad By Robert Kiyosaki?
His real father and his friends father took two very different approaches to money, and Kiyosaki explains the differences they take with a series of principles which separate the rich from the poor.
You must have heard of the Rich Dad Poor Dad book from a friend or co-worker and still haven’t read it. Here are 5 principles that will encourage you to do so NOW.
Principle 1: The Rich Don’t Work for Money
This principle explains how the poor spend hours upon hours working for many. They believe the more time and hours they put in, the more money they will get.
However, the rich purchase assets which make their money work for them. Instead of working longer and spending more hours working, the rich create assets which will make money for them passively, without them having to work long hours to earn it.
Also Read: How make money with real estate investing
Principle 2: Financial Literacy Is Key
This principle focuses on the difference between assets and liabilities. It speaks about how the poor acquire liabilities with their money, while the rich acquire assets.
While poor people continually dump their money into expensive homes and cars, the rich invest their money into items which return them more money.
By creating these different income streams, they continue to make money while the poor spend all the money they get and never make any true financial progress.
“Money talks, most times what it says is: goodbye”
Also Read: Introduction to investing for beginners
Principle 3: The Rich Mind Their Own Business
The rich focus on their assets, and generating cash flow from these assets. They are not concerned with the habits of the poor, or the luxury items seemingly rich people have.
By not being effected by the decisions of others, they stay focused on their financial goals. The idea is, don’t use the money you don’t have to impress people who don’t care, FOCUS.
Principle 4: The Power of Corporations
The rich use the legal tax loopholes of corporations to keep more of the money they earn.
By knowing accounting, investing, meaning of terms like compounding, legal principles, etc. the rich are able to be smarter with their money by retaining more and making their money earn more for them.
Principle 5: The Rich Take the Opportunities to Invest Their Money
The rich take calculated risks with their money on investments they have researched and believe will earn them more money, even if there is the possibility they lose their money.
They don’t work for money, they work to learn. While the poor spend all of their time learning one task and performing one job, the rich diversify their knowledge and are continually learning different areas which can help them gain financial freedom.
By learning a broad array of subjects, the rich are able to be more knowledgeable in different areas and have more opportunities to gain money.
Going outside one’s comfort zone to learn new things pays great dividend. “For every inconvenient situations comes unseen opportunities”.
The book – Rich Dad Poor Dad will help you how the rich overcome the obstacles in their way. Obstacles like laziness and fear stop the poor, however the rich hurdle them and continue to make progress.
Not being deterred by aspects of your life such as fear and laziness is the final key for achieving financial freedom.
Rich Dad Poor Dad is an incredible book for anyone who wants to achieve financial freedom and become more financially literate.
It presents the material in a unique and anecdotal book with real life applications which are broad reaching to people from all different walks of life.
Takeaways from Rich Dad Poor Dad
– The poor work for money, the rich make money work for them
– Assets make you money, liabilities take your money
– The rich focus on themselves, not the actions of others
– The rich use accounting, investing, and legal principles of corporations to be smarter with their money.
– The rich take opportunities to earn more money when they are presented to them
– The rich work to learn, not for money
– The poor are deterred by obstacles, while the rich overcome them.
Has this post inspired you to get the Rich Dad Poor Dad book by Robert Kiyosaki? You’ll be doing yourself a big good if you get it and read today.