3 Lessons from Rich Dad vs Poor Dad
Robert Kiyosako’s book “Rich Dad vs Poor Dad” is a personal finance book you need to read, especially during this pandemic.
These are 3 fundamental financial lessons from Rich Dad vs Poor Dad:
1. The Middle Class works for money while the Rich make money work for them.
This concept is illustrated by two emotions that rule people’s lives that is — fear and greed. Fear keeps the middle class working for eight hours a day because that is what they believe is a secure way to make money. They trade their time for money.
The middle classes’ greed — brought by the joy and pleasure which they think the money can buy is often short-lived.
There’s no arguing that the first word that comes to mind when thinking about obtaining money is JOB. If you were brought up traditionally, you were told to get a college degree in order to get a job to make money. Getting a job has always been the most convenient way to start generating cash flow.
The difference between the rich and everyone else is that the rich realize they need to be the one who hires others into jobs and not be trapped holding the job.
Too many of us believe a job is the only way to make money, and that kind of mentality will leave us working for money for all eternity.
2. The Rich build and acquire assets while the Middle Class acquire liabilities.
Without the proper knowledge and distinction between an asset and liabilities, the middle class fall into a debt trap thinking that their house is an asset.
An asset puts money in your pocket while liabilities take money out of your pocket. The rich buy assets.
For example: If you purchased a home and you are paying a monthly mortgage on it, that is a liability. If you purchased a multi-family home, live in one side, and rent out the other sides to pay for the cost of the mortgage — that is an asset.
Bottom line — Invest in income-generating assets such as real estate, stocks, etc. to produce more income. Aim to lower expenses and have assets replace the expenses, and then some. The self-made rich often develop habits of living below their means in order to save and invest money, eventually leading to their expansion of assets.
3. The Greatest Asset in the world is our Mind.
Robert Kiyosaki stressed, “Your mind is your greatest asset, so be careful what you put into it.” The mind is the only asset that always increases in value — if it is trained well, it can generate enormous wealth.
If you take a look at some of the largest companies in the world — you will find that they all begun with a thought, vision, dream to fill a gap.
Intelligence is solving problems in the world which people will pay for. We must remember that each one of us are architects of our reality — that we are capable of what we desire through our thoughts and actions.
Developing wealth takes a new mindset and big changes.
The pandemic has driven many people across the world into financial situations where they feel hopeless.
I hope that these lessons from Rich Dad vs Poor Dad will open someone’s eyes to see how rich people become rich. It is these kinds of lessons which you can embrace and take forward in your financial routine that can change your life for the better.
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Natalie Garces is an analyst from the Greater Seattle Area. She is passionate about data visualization, investing, and all things tech.
