Chapter One: Lesson 1: The Rich Don’t Work for Money
The poor and the middle-class work for money. The rich have money to work for them.
You are only poor if you give up. Life is your best teacher, but it doesn’t teach you the conventional way, it pushed you around, asking us to wake up, most people quit, while only a few fight, they see every push as a way to learn something new.
Passion is Anger + Love, when people think about money, they want to be safe. They spend their life controlled by fear and greed. Fear of not having money and once they have their paycheck, the greed to get more stuff, they are being like the donkeys following the carrot, the boss gives them the carrot and takes them where he wants to go. Their job is a temporary solution to a long-term problem.
Being rich is one of the most common dreams we all have. We all talk about it to be rich but most of us never make it happen. Kiyosaki emphasizes the idea that if you are able to change yourself, you have to power to change your life if it’s what you really dream for. He explains that the majority of people let life push them around, they let their boss, their job and their families direct their lives and standards of living. There is another kind of person who pushes back and these people will be successful. They understand changing and learning themselves would make them wiser and will lead them to achieve their goals.
Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets. Assets are what put money in pocket, while liability takes money out of it. More money rarely solves your problems, intelligence does. Remember the 3 Japanese powers, the power of the sword symbolising weapons, the power of the jewel symbolising money and the power of the mirror, symbolising self-knowledge and it’s said to be the most important of the 3. That is why an intelligent person hires people who are more intelligent than he is.
Investing in a house can harm in one of 3 ways:
1. Loss of time, during which other assets could have grown in value.|2. Loss of additional capital, which could have been invested instead of paying for high-maintenance expenses related directly to the home.
3. Loss of education.
The middle-class salary is their sole income and their taxes increase with it, that is why it’s called the rat race.
Wealth is a person’s ability to survive so many days forward — or, if I stopped working today, how long could I survive?
Chapter Three: Lesson 3: Mind Your Own Business
Financial struggle is often the result of people working all their lives for someone else. You need to focus on your assets column.
Businesses that do not require my presence I own them, but they are managed or run by other people. If I have to work there, it’s not a business. It becomes my job.
Many companies fail in the first 5 years, so don’t surrender.
Robert Kiyosaki outlines the factor why most people can’t be rich as they spend their whole life working for someone else dream and in return just get a paycheck which keeps them holding to work for it. He explains that there are two schools of thought when it comes to earning an income:
Taxes were levied in Britain for the fight against Napoleon from 1799 to 1816 and in America to pay for the Civil War from 1861 to 1865.
Financial IQ is made up of knowledge of 4 broad areas of expertise:
In the real world, it’s not the smart who get ahead, but the bold. Today, wealth is in information. And the person who has the most timely information owns the wealth.
Rich people are often creative and take calculated risks.
The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth seemingly instantaneously. An untrained mind can also create extreme poverty that can crush a family for generations.
We learn to walk by falling down. If we never fell down, we would never walk.
There is always a risk, so learn to manage risk instead of avoiding it.
When it comes to money, the only skill most people know is to work hard.
In school and in the workplace, the popular opinion is the idea of specialisation: that is, in order to make more money or get promoted, you need to specialise. That is why medical doctors immediately begin to seek a speciality such as orthopaedics or paediatrics. The same is true for accountants, architects, lawyers, pilots, and others. rich dad’s advice is:
Job is an acronym for “Just Over Broke.” where “Workers work hard enough to not be fired, and owners pay just enough so that workers won’t quit.”
The main management skills needed for success are:
1. Management of cash flow
2. Management of systems
3. Management of people, is the most difficult one.
The primary difference between a rich person and a poor person is how they manage fear.
The 5 obstacles:
2. Cynicism; “Cynics never win, Unchecked doubt and fear create a cynic. Cynics criticize, and winners analyze”
3. Laziness; what Colonel Sanders did to his little chicken. He fried it.
4. Bad habits
5. Arrogance; “What I know makes me money. What I don’t know loses me money. Every time I have been arrogant, I have lost money. Because when I’m arrogant, I truly believe that what I don’t know is not important,”
“There is gold everywhere. Most people are not trained to see it.”
10 Steps to start:
Always look for new ideas, and read about something that is new to you.
The key to financial freedom and great wealth is a person’s ability to convert earned income into passive and/or portfolio income.
By- D Chand Thakuri