Have you ever wondered what to do with your salary? Do I invest in business, stocks and real estate or do I buy a new car, newly launched cell phone and new clothes? Many people are caught up in these thoughts and have serious difficulties in managing and reflecting on personal finances.
The main difference between them is in financial education, as the right thing is to invest in assets and not in liabilities, making the money work for you!
This is a concept that is not widespread in school systems, and there is only one way to do that, you go after finance knowledge.
And that is exactly what we are going to show you in this PocketBook, bringing advice for each stage, in search of becoming financially independent and wealthy.
About the book “Rich Dad, Poor Dad”
“Rich Dad, Poor Dad” (1997) written by Robert Kiyosaki and Sharon Lechter, provides the guidelines for getting these skills, as well as showing the importance of an ambitious mindset to achieve your goals.
The content is based on the story of a boy who had a rich father and a poor father. The author tells us how he balanced the teachings of both to develop and build all their knowledge and wealth.
“Rich Dad, Poor Dad” is structured in nine chapters with six lessons to learn and apply in life.
About the Author Robert Kiyosaki
Robert Kiyosaki is an investor and entrepreneur with an estimated equity of over $ 80 million.
Other famous works by the author:
He and his wife are the founders of Rich Dad, a financial education company, as well as being the creators of a game about financial and business concepts, called Cashflow.
To whom is this book indicated?
The book “Rich Dad, Poor Dad” is one of the books in the “mandatory reading” category for most people. It presents several indispensable concepts for financial management and how to think about money.
Suitable for anyone who wants to understand how money works in the world. For those interested in learning how the rich get rich and how to achieve financial freedom.
Main ideas of the book “Rich Dad, Poor Dad”
- The rich do not work for money, but their money works for them;
- Financial education is essential;
- Your profession and your business are distinct elements;
- Work to learn and develop, not for money;
- The rich "invent" money;
- Develop financial knowledge in your children.
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Overview: “The Rat Race”
How would you define a “rat race”?
In today's world, we have that person who gets good grades, goes to college, buys a house, a great car and so on. But do you really think such a person has the spirit of wealth?
The answer is no! Well, she can even avoid poverty, but she won't be able to get rich. Because in all stages of her learning, she did not get financial education, she just followed the pattern created by society.
This person simply receives his salary, spends everything on stuffs such as cars, homes, cell phones, pays credit cards, until he is in debt. And as you earn more, bills and spending will only increase.
It is at this moment that Robert Kiyosaki presents the main purpose of the book “Rich Dad, Poor Dad”: to make you break this vicious cycle for good and adopt a new mentality.
For you to emerge victorious from the “rat race”, the main way out is through financial education. But what should I focus on? How I will do?
Calm down, the author indicates that his knowledge must revolve around four skills:
- Understand the numbers;
- Investment strategies.
In addition, it is ideal that you look for new sources of education, such as great lessons from books, blogs, choose a mentor and / or any other extra source that brings real necessary financial lessons. It is important to emphasize that this knowledge and its updating must be constant.
Overview: Two Sides
The author, Kiyosaki, had two dads. One was his biological father (poor father), who was a government employee and kept telling his son that he should study to get a good job. His other father, in fact, was the father of his friend (rich father) who had no education.
The rich dad had never finished high school, but he nevertheless became one of the richest men in Hawaii. The poor father, on the other hand, had specialization and several degrees, but ended up leaving big debts when he died.
And what did they both have in common?
They knew the importance of studies, but were distinguished by their focus on financial knowledge.
In this way, it is clear what “Rich Dad, Poor Dad” intends to convey: “the rich do not work for the money, because the rich work to learn”.
Therefore, we are inserted in two key concepts of the book: assets and liabilities.
Overview: Assets and Liabilities
According to Robert Kiyosaki, for you to become rich, there is a path that you cannot escape: it is the search for financial knowledge. And if this is not passed on by your parents, you have to go after this training yourself, as the current education systems do not deliver this knowledge.
Thus, one of the main financial concepts covered in the book, “Rich Dad, Poor Dad”, are assets and liabilities.
In a nutshell, we can understand that an asset is everything that generates income, and the liability is the reverse, that is, it constitutes expenses. Now let's get to know them better!
The big difference between rich and poor is where they invest their money; while the rich have financial knowledge and invest in assets, the poor continue to buy liabilities in the belief that they are active and thus lose all financial control.
Let's try to exemplify. When you buy a car, can it be considered an asset?
Not really, because over time it depreciates, it has annual fees, maintenance, fuel and so on, that is, you spend more than you earn. So it's a liability!
So a house can also be considered a liability, right?
Well, there are two perspectives. If your home is your own home, it ends up being a liability, as it generates expenses. Now, if you rent it, it becomes an asset, as it starts to generate money.
Overview: Your Business
Currently, it is very difficult to seek security in your business, as today it is necessary to deliver more than your leader agrees with you. Therefore, Robert Kiyosaki says that it is necessary to have the spirit of entrepreneurs and investors.
Thus, it is necessary to make it clear that your profession is what you are aiming for weekly, during the 40 hours, but it ends up providing you only what is necessary to pay your bills. If you really want something more, it is essential to focus on your business.
Your business is what will make you rich, it will be where you invest time and money in order to increase your assets.
The author cites the example of McDonald’s: the business in which they operate is in the real estate business. But how so?
In fact, McDonald’s sells franchises for the franchisee to build his store.
Overview: Teach Your Children
How has the financial relationship with your child been? Have you been giving them allowances and cell phones?
Look, it is better that you start now with the concepts of financial education with them, so that they do not experience future difficulties and have good financial stability. After all, parents who teach their children to invest and manage money are rare. In most cases it is not because they do not want to, but it is because they do not have the knowledge.
Do you believe that you do not have all this knowledge to pass on to them as well?
So let's learn about it soon. We will introduce you to the main characteristics of wealthy parents; are they:
- Stimulate entrepreneurship;
- Make money work for you;
- Accept risks;
- To seek financial independence and to pursue what you most desire;
- Have a service that increases your teachings about money;
- Have reciprocity.
If you already have any of these characteristics, great, let's intensify it even more. But if you haven't already, you already know where to focus and the good examples you should set for your children.
Overview: Attitudes that keep you from being rich
If you consider yourself a person who is not happy at work and spends all the money you earn, you are probably among the “poor” people, if only on an emotional side.
We even understand your point of view, and the author believes that this is a consequence of two reasons: fear and greed. These end up being common barriers in the trajectory of those who want to progress and obtain greater financial knowledge.
While “poor” people are immersed in these two characteristics, “rich” people demonstrate different attitudes, they seek opportunities at all times, are entrepreneurial thinking and seek new ways and attitudes that make money work for themselves.
First of all, it’s good to tell you that rich people have already lost money, and in some cases a lot of money. But they see it as just a learning step.
In order for you to get out of this maze, you need to focus on your mind and not on your money. In this way, we have to turn our mind in our greatest asset and make it choose strategic decisions aimed at opening new doors and generating opportunities.
See the author's tips for changing your mindset to wealth:
- Start early and plan everything;
- Understand the real value and everything you earn when making an investment;
- Assess and eliminate barriers to possible investment.
Overview: We should not work to earn money, but to learn new skills
In many cases, there is a small difference between a successful and an average business. This difference, in most cases, is due to the disproportion between skills.
Therefore, the main skills are:
- People management;
These skills will make you spread your product / business to more people and they will buy the idea. So, go in search of those skills.
What do other authors say about it?
In “Unshakable”, Tony Robbins gives valuable advice: if you're not careful, taxes can easily eliminate 30% or more of your investment returns. So it is important to pay attention only to the net amount that you will, in fact, be able to maintain.
All the billionaires the author has met have one feature in common: they and their consultants are really smart on this subject of taxes.
According to the author Lynda Gratton, from the book “The 100 Year Life”, long-term financial planning is necessary, with the belief in your skills and self-control for a savings and investment plan.
Napoleon Hill, in “Quem Pensa Enriquece”, reports a common characteristic among successful interviewees: they are able to make decisions quickly, and are confident with that decision.
Okay, but how can I apply this to my life?
The book, “Rich Dad, Poor Dad”, is very effective in showing you the paths you must follow to achieve financial independence; however, these ambitions can only be achieved if you begin to move and strive as soon as possible.
Your network can be very valuable to help in your walk for financial knowledge and the market that you want to participate with your business. Talk to experts and learn more.
It is also important that you keep track of your personal finances, with information and details about your monthly income and expenses, and the listing of all your assets and liabilities.
Remember to invest in assets and more assets, after all, this is the soul of the rich, not a high salary. Finally, let's recap some practical insights from the book; are they:
- Find the real reason why you want to become rich;
- Define how you want to use your money in a very detailed way;
- Find your inspirational source, any good you want or successful people;
- Pay yourself first;
- Be careful in selecting friends, prioritize those with positive feelings and who have exemplary attitudes;
- Have friendships that add value and financial lessons;
- You must adjust frequently to changes in the system;
- Have good mentors at your side, hire people who have already reached where you want to go!
- Look for sources to train yourself in financial means;
- Think positive, create and invest in great opportunities.
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