4 Financial Lessons from Rich Dad, Poor Dad
Robert Kiyosaki’s lessons on financial intelligence found in the book Rich Dad, Poor Dad are a delight. If this is the first time you’ve heard of this entrepreneur, don’t worry. The rest of this article you’ll read will be short summarized lessons based on the ideology of this entrepreneurial guru. Do you know what “rat race” means? Well, it was Kiyosaki who implanted it.
With this expression he sought to explain the exhausting circle of studying to work, working to pay debts and staying in this cycle for two fundamental reasons: lack of entrepreneurial information and fear of entrepreneurship. This being said, here are 4 lessons Kiyosaki left us:
Lesson 1: Don’t Trade Time For Money
Closure is: “The middle and poor classes work for money while the rich have money working for them.” Quitting a job because you have a low salary and then go looking for a job where you earn more money isn’t a definitive solution to achieve financial independence.
It will surely happen that proportionally to the salary increase, your debts and expenses will increase as well; why? Because that’s what happens when people have no financial education. The wise way is to get to know how the medium term money works for us. How? You can start by finding good business ideas and information about entrepreneurship.
Lesson 2: Learn Finance
There are people who earn lots of money, but in the end they find themselves in financial difficulties towards the last days of the month; or people who during their first years of financial life denote good income, but at the end of their lives they are mired in poverty without being able to explain how all their money was spent. This is exactly how lack of financial intelligence looks like.
In short, you must understand two definitions and a simple technique to smartly manage your finances.
Definition one: An asset is everything that generates economic income. Definition two: A liability or passive is something that makes money go away from your hands, for example rents, parking fees, etc. The technique now becomes obvious: make your assets superior to your liability and with that positive gap, continue making investments.
Lesson 3: Take Care of Your Own Business
Stop giving the best years of your life to make your boss’s business successful, it’s time for you to focus your energy on starting your own business. Why are you trying so hard to make money for someone else and becoming lazy or afraid to make money for yourself? Maybe you’re not be able right now to give up that job that isn’t filling you, but at least, in your spare time you can try starting something new, or setting up a business of your own, creating assets, or at least learning how to.
Lesson 4: The Rich Invent Money
This lesson is about how to make money from zero. Many people, who have little financial intelligence think that to start a “good” business it’s necessary to first have money. But the truth is, it’s not necessarily so. There are other people that can make good investments without having money, this is possible to achieve by acquiring financial intelligence along with courage and initiative.