Then Robert Kiyosaki, in Rich Dad, Poor Dad, What the Rich Teach Their Kids About Money - That the Poor and Middle Class Do Not, 1997, Warner Books, opened my eyes and I finally understood that I had been sold a false philosophy that may have applied in a previous generation but no longer applied in general to the times I was living in. It was a painful view of reality that I wish I had learned before incurring all that debt; but, nonetheless, the knowledge and awareness can now serve me well and it can serve you well too if you did not learn these six lessons at home.
These are the six lessons:
(1) The Rich don’t work for money.
Kiyosaki writes about having two dads. One dad got a great education and became a teacher and administrator in the school system, buying a larger house with each raise, but eventually being pushed out of the school system for political reasons, and retiring poor in need of help. The other dad dropped out of high school to support his family by running a store, and continued to buy additional businesses that he managed but had others working for him, and he purchased rental properties, and eventually retired a very rich man.
When Kiyosaki was in grade school he asked the Rich Dad to teach him how to make money and the Rich Dad designed a course for him to learn how life operates. Initially, he only paid Kiyosaki ten cents an hour to teach him that he needed to change himself and his philosophy and not blame the Rich Dad for being cheap in paying him.
Rich Dad shared that the poor and middle class work for money, but the rich find ways to have money work for them. Whereas poor and middle-class people often are controlled by fear and greed, the rich learn to work for financial freedom. Rich dad told Kiyosaki to be truthful about his emotions and use his mind and emotions to work for him, not against him. Rich dad explained that we are all employees but at different levels.
The main cause of poverty and financial struggle is fear and ignorance, not the economy or the government or the rich. Self-inflicted fear and ignorance keep people trapped.
Learning to master fear and greed and choosing thoughts and actions that lead to financial freedom, rather than reflexively depending on a job when there are other options available to make money, is the first step in wealth building. This way of thinking teaches the wealthy to see opportunities to earn money that others miss.
(2) Why teach financial literacy?
In the long run, it is not how much money you make, but how much money you keep, and how many generations keep it, that matters. Mastering financial literacy is an essential step to becoming wealthy. The first step to financial literacy is to know the difference between an asset and a liability. An asset puts money in your pocket. A liability takes money out of your pocket. The wealthy use their income to invest in assets that place money into their pockets.
Many middle-class families buy liabilities, such as a house, and they think these are assets. But these liabilities force them to have to continue working a job to continue to pay these debts. The poor only have expenses that they pay.
(3) Mind your own business.
Invest in assets that place money into your pocket. These can include businesses that do not require your presence to operate. [If you have to work there, it is a job, not a business.] Purchase stocks, bonds, mutual funds, income generating real estate, notes [I.O.U.’s], royalties from intellectual property such as books, music, scripts, patents, or anything else that has value, produces income, and has a steady market.
(4) The history of taxes and the power of corporations.
Taxes initially were passed that were intended only for the wealthy. But the wealthy figured out clever ways to avoid paying the taxes. The government’s appetite for money grew and the taxes mostly fell on the middle class and the poor. The tax man is often the biggest bully after your money.
The rich use their clout to get laws and tax codes that benefit them. For example, rich people use “1031" exchanges that allow them to trade one piece of property for another more valuable property without being taxed.
The rich learn financial literacy, how to invest, how to understand markets [the basic law of supply and demand], and they learn to use the law to their advantage by forming corporations. By forming corporations, the rich are able to pay their expenses, such as cell phone payments, vehicle payments, even vacations for board meetings before they pay taxes on the money the corporation earns. Additionally, the rich learn ways to protect their assets from lawsuits with layers of legal protection.
(5) The Rich invent money.
Many in the middle class subscribe to the strategy of putting a hundred dollars into savings every month for 40 years and then having money at retirement. But this mindset of placing all their money for investment into savings for retirement could blind people into not seeing opportunities for making a better return on their investment dollars. For example, in a down economy, purchasing an apartment complex might provide a greater return on investment dollars.
Great opportunities are not seen with the eyes. They are seen with the mind.
Investors come in two types. The first type of investor buys a packaged investment. The second type of investor creates the packaged investment that others buy.
(6) Work to learn - don’t work for money.
The old acronym that “job” means just over broke applies to many even today. Thus, seeking work for what you will learn there, rather than for pay and benefits, will often benefit people more in the long run. Once people are trapped into working to pay bills they become like hamsters on a wheel, always running but going nowhere.
Kiyosaki's educated Dad worked harder and harder, the more he climbed the totem pole at his job. Whereas, his Rich Dad gained more and more freedom from work, the longer he worked managing his companies and real estate.
10 Steps to take on Your Journey to Wealth
(a) Develop a compelling reason for getting wealthy.
(b) Choose daily with each dollar you receive to be wealthy or not.
(c) Choose friends carefully and learn from others’ money stories;
(d) Master a money-generating formula and then learn a new one;
(e) Pay yourself first;
(f) Pay your brokers well;
(g) Always ask how fast you will get your money back with each investment you make.
(h) Assets buy luxuries;
(i) We all need heroes - Find people who invest well and learn from them.
(j) Teach and you shall receive - Give that which you want to receive. If you want money, be charitable and give to a church or your favorite charity. If you want knowledge, teach someone else what you know.
More strategies to employ
(a) Stop doing what you are doing and assess where you are at on your financial journey. What is working and what is not working? How can you fix what is not working?
(b) Look for new ideas you can use. These can be found in bookstores. Look for new formulas you can use to generate wealth.
(c) Take action. Do what the income generating formula advises you to do, step by step. Find someone else who has done it successfully and take them to lunch. Take classes and buy tapes. If you are investing in real estate, make offers.
Money is only an idea. If you want more money, change your thinking. We have all received two great gifts, our mind and our time. Each person chooses how to use both of these gifts. With each day and each dollar that enters our hands, we have the power to choose our destiny by making decisions on how to use that day and that dollar that correspond with wealthy philosophies, middle-class philosophies, or poor philosophies.
Rating: $$$$$ out of 5. I am so grateful Mr. Kyosaki opened my eyes. I hope you will consider reading his book if you were sold a philosophy that no longer works.
opyright @ 2016 Christine Esser
This book was purchased, not a gift.
This book can be purchased on Amazon by clicking the first link below. Disclosure: We may receive a small commission from your purchase, but this will not raise the amount you pay. Thank you for reading this review. Comments are welcome. We have not received anything from the author or publisher in exchange for this review.
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