Photo Credit: Mathieu Stern on Unsplash

Applying Rich Dad Poor Dad’s Lessons

How Kiyosaki’s Wisdom has Changed my Life

For those of you who don’t know, Rich Dad Poor Dad is a personal finance book written by Robert Kiyosaki, who is passionate about providing people with financial education. Often called “The best personal finance book of all time”, it lists several (somewhat controversial) ideas, principles, and methods to help you regain your life through financial freedom.

This book was eye-opening and inspiring. Right after I finished it, I began to put Kiyosaki’s teachings into practice. Here are three ways I have applied the principles of Rich Dad Poor Dad into my life.

I started viewing money more like a game (within reason).

Kiyosaki explains that one of the biggest obstacles people face when making money is the fear of losing money. However, if you look at money more like a game, and realize that you can learn through losing some money, then that fear isn’t as intense.

Before reading this book, 100% of my investments were in low-yield ETFs. When the economy was better, I was making some money–but when the economy got worse, I started losing more and more money.

Buying actual stocks always scared me because they were riskier, but I decided to take the plunge and begin reinvesting– so far, it’s been a good experience. I view it as a game, and I remember that if I lose money, I need to do my research and find out why– so that I can apply that wisdom to my later investments.

If you know what you’re doing, you lower the risk.

Kiyosaki says the mistake most people make when investing is not knowing much about the investment and then praying that they’ll make money from it. That’s where a lot of the risk comes from. To lessen that risk, he recommends paying/investing in your financial education– that chances are, when you buy a seminar or a book, the knowledge you take from it will compound your educational investment.

Since I’m starting small so that I can learn, I decided to buy a subscription to the Wall Street journal. After doing that, I realized how true Kiyosaki’s lesson is. After buying the subscription, I feel more informed about the American economy and global events. This helps me immensely when deciding to invest in new stock. Being informed minimizes that risk– so invest in your financial education.

When people criticize your financial decisions, ask what their experience is.

To explain this concept, Kiyosaki uses the Chicken Little story.

“The sky is falling! The sky is falling!” Chicken Little would scream, making everyone around him fall into a panic.

Kiyosaki explains that this is similar to people going on about the dips in the economy, or people telling you your investments are bad. People are essentially screaming, “The sky is falling! The sky is falling!”

So, he recommends asking people with this mentality one question– “What is your experience in it?”

If people are telling you not to do something they haven’t done before, then what do they know? How can they know?

This is an attitude that I’ve started adopting. If you don’t have experience taking action in what you’re preaching, then I won’t take you seriously.

I decided not to let the fear of all the Chicken Littles get in my way of trying new things. If I fail, I learn something new. If they were right, good for them. But I would rather try many new things and learn from them, as opposed to staying frozen and criticizing what everyone else is doing.

So, yes, all the hype you’ve heard about Rich Dad Poor Dad is true. It is an excellent book with revolutionary advice. I highly recommend you read it. It helps you take ownership over your finances, while at the same time helping you grow by making you face some hard truths. Everyone’s methods toward financial freedom are different– but this book can serve as a great guide to get you started on that journey.

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