Rich Dad Poor Dad By Robert T. Kiyosaki
Whether you have money problems or not, whether you are an investor or someone with debts… The Rich Dad Poor Dad book is for you and below I give my point about why do I think this.
The book starts telling the story of the childhood of Robert, the author, and how he met rich Dad. The narrative is very light and get you into the story until suddenly you realize that you’re way to long looking to balances and awesome financial strategies and you hadn’t even noticed.
Besides, some concepts of Robert seems to slap you in the face with a huge dose of truth and self awareness.
Some concepts of the book
Isn’t how much money do you earn but how well do you spend it
The author argues that doesn’t matter how much money do you earn unless you know how to spend it well.
The majority of people, when they are promoted at work, tend to raise their life costs and continue acquiring debts and bigger bills.
This turns into a dangerous game because, if they lose their jobs or something unexpected happen (what is funny because always happen so is always expected), they will have a lot of trouble to adjust their lives to this new situation.
Robert says that more money will be worth it only if it works for you and if you pay yourself first, avoiding people to take it from you.
So the tip is: A better job or a promotion will not change your life. It will only help you if you use the extra money to acquire financial assets that generates income for you. So you can use this income (not it all) to satisfy your consumerist desires without compromise your financial health.
Pay yourself first
At an earlier time in my life, I had to make a huge effort to keep paying all my bills and to honor my commitments. So someday I started to realize, didn’t matter the mess that I had done with my financial life, I was always able to solve the situation.
I’m telling that because this proves one of the Robert concepts. He says that you have to pay yourself first, doing an investment or whatever other thing that creates passive income for you, before you pay your bills.
The idea is that your mind will always be able to generate a creative solution to create more income to pay your debts. Robert says that the pressure of the creditors will always be a great motivational factor to make you run behind a solution for your pending bills in comparison to your investments where this doesn’t happen.
The thing is, if you expect money left over after you pay the bills to invest or to undertake, you never will.
This can sound a little bit crazy and surely I would not agree with it unless I had not realize this by myself before read the book.
Centralize your assets under an anonymous society
Almost every govern has some kind of tax incentive policies, so centralize your assets under an anonymous society is a good idea.
In some cases anonymous societies are less taxed then physical person on acquisitions of goods. Besides that, your assets are protected no matter what legally happens to you as physical person.
I don’t buy what I don’t believe or don’t understand
Some people may think invest or undertake is hard, however Robert has a different point of view. In his words:
If the opportunity is to much complex and I don’t understand the investment, I don’t do it. Everything you need to reach financial success is basic math and common sense.
Surely you always have to improve yourself and run after new knowledge, but if the opportunity doesn’t make sense to you it doesn’t worth the risk.
The more you study and improve your financial intelligence, the more opportunities will appear for you
The author says the more you improve your financial and business intelligence, more easy will be for you to identify good opportunities to make money.
Besides that, people starts to rely on you to make business. Robert itself has friends that negotiate with him company shares before it was listed on stock exchange from USA and Canada.
People search him because they rely on his potential to make business, acquired during years of study, efforts and experience.
Some people lose money because they fear losing money
No matter how much you study, nothing will change without the right dose of courage.
According to Robert, you have to take risks and be fearless to let your financial genius convert your fear into power. If you seek safety you will find no success.
Some examples of limiting fears:
- What if I invest my money and lose it?
- What if buy this house and cannot rent it? (Based on the real state examples of the author).
- What if I start my own business and get broke?
- What if I pay myself first and have not enough money to my bills?
This kind of fears can make lose a lot of opportunities. For example, you can reject a job offer from a company where you could grow professionally and learn a lot, what would give you more opportunities in the future, because you think you are more stable at your current job.
Also realize that take care of your finances can give you a stable and solid bases to take controlled risks. This will facilitate to you to seize opportunities.
Here are some phrases of the author about this subject:
The main reason why 90% of the North Americans have financial problems is because they play to not lose. They don’t play to win.
If you have little money and wants to be rich, you have to be focused, not balanced.
Have in mind that the success is found only where the brave have the courage to go!
Anyone is a seller
You can be an entrepreneur or an employee, at the end both are a sellers.
The difference between the roles that I mentioned above are just what each of they sell. You can be selling some kind of product or service or just your time.
Of course sell a product is much more profitable then sell your time. After all, even if you don’t sleep, you just have 24 hours a day.
Thinking about this, Robert recommends everyone to work as a salesperson at sometime of their lives. It will help with the fear of failure and rejection, because as a salesperson you will have to deal with failures a lot of times. In his words, the fear of failure and rejection, is the reason why most people aren’t successful.
You have to know about business to be financially successful
In the book we have an excerpt that is life changing.
When Robert asks for the students of his course classes, “Which of you make a hamburger better than McDonald’s?”, almost everyone raise their hands. So he asks: “If the majority of you make a hamburger better than McDonald’s, how is it possible that McDonald’s earn more money than you?”.
For him, its justify why a lot of talented people are poor. They concentrate in do their best on the hamburger preparation instead of concentrate into manage the business and fond out how to sell more hamburgers.
For the author, the three main abilities of management requested by the success are:
- Cash flow management
2. Systems administration
3. Coordination of people
And the most important specialized abilities are sales and commercialization comprehension. The ability to sell is the base for personal success.
The ability to sell, could be understand as write, speak and negotiate.
You’re not busy, you’re lazy!
Robert says that busy people are mostly people hiding their laziness, and in my opinion, maybe hiding their fear of do what they really should be doing.
Saying that they are always busy, they always have an excuse.
The examples are many:
- People that don’t start their own business because they “don’t have enough time”;
- The ones that doesn’t take care of their health because of a very busy routine;
- The ones that doesn’t take care of family problems because the same reason as above;
- People that don’t start to invest because there is never money left and etc.
The purpose of this excerpt of the book is clearly make you to take a time to reflect about your life and your routine and realize if you’re doing something like that.
My conclusion
The Rich Dad Poor Dad book is, in my opinion, a must have reading for everyone.
This is an experience that can help you with your business, with you personal finances and with your life in general.
While you’re reading you feel compiled to go put the author advices in practice as soon as possible, because they are very clear and simple and at the same time powerful and filled of truth.
If you haven’t readed yeat, do yourself this favor and read it! You can find it on Amazon or any other bookstore for a price that is nothing compared to the knowledge this will bring you.