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Is money your biggest problem in business? Would everything be solved if you just had the money? However, it is possible that money is not your problem at all? Perhaps it's your understanding of money. Think about it. I'm sure you hear stories of people at the lowest income levels somehow becoming self-made millionaires. How did they do that with no money? Robert Kiyosaki answers that in Rich Dad Poor Dad! No matter where you are in your business or wealth creation goals, this is a must-read.
I know you are just as busy as I am so I've organized the information into three sections; The outcome and actions to achieve it, and a condensed summary.
Outcome: As an entrepreneur, you are responsible for the health of your business, which provides for your family, clients, employee, and partnerships. How much it grows or declines and for how long will be completely dependent on your financial intelligence. Robert Kiyosaki provides the lessons required to learn to navigate risk, overcome personal obstacles, and achieve financial freedom through education. I'm sure you have read Rich Dad Poor Dad before, but if you are not applying the lessons or you do not have the wealth you feel you deserve then it's time to take another look it.
List of Action Items
- Find a mentor on the financial path you want to be on and expand your financial education and mindset.
- Do not work for money or allow your emotions about money to control your actions. Work for free and look for opportunities to have money work for you.
- Begin your financial education by clearly understanding the difference between assets and liabilities, and focusing on buying income-generating assets.
- Focus on developing real assets that do not require constant attention and generate income.
- Educate yourself on and use corporations to limit risk and lower your tax bill.
- Deepen your financial genius by improving three main skills: find opportunities that everyone else missed, raise money, and organize intelligent people.
- Master the ability to sell, communicate, and be charitable. Continue a well-rounded financial and business education on the subjects of accounting, marketing, law, and management of cash flow, business systems, and people.
- In order to develop your asset column, you must learn to overcome your fear of failure, cynicism, laziness, bad habits, and arrogance about money.
- Awaken your financial genius with a strong purpose, good daily choices with your time, well-rounded successful friends, formulas, professionals, mentors, and generosity.
- Take any action toward your goal today by listening to people with the knowledge you need, paying close attention to your area, and keep making forward progress.
- Increase your financial intelligence in order to turn earned income into passive and portfolio income.
- Read Rich Dad Poor Dad Today!
Condensed Content Summary
Introduction - Rich Dad Poor Dad: Robert Kiyosaki grew up under the influence of a rich dad and a poor dad. Their completely different points of view allowed Robert to choose which dad to listen to. Robert was able to see even early in the early stages that the way each man thought about money shape their lives. Poor dad believed that he would be taken care of by the government or a good job so he focused on academic knowledge rather than financial knowledge. Rich dad however believed that he was responsible for building his own wealth by way of financial education. The six lessons in this book are the basics of financial education required to build wealth.
The Rich Don't Work For Money: Life, the best teacher of all, continues to push you around until you learn the lesson and grow your wealth. If you don't learn the lesson you will spend your life blaming a job, low pay, or your boss for your problems. Then you will either stay and take it or continue to look for a better opportunity and higher pay hoping it will solve the problem; in most cases, it won't. If you realize you are the problem, you can change yourself, learn something, and grow wiser. This pivotal point of view is what separated rich dad from poor dad. It's what Robert Kiyosaki calls lesson number one: The poor and middle-class work for money, but the rich have money to work for them. Learning to have money work for you is a completely different course of study. In fact, to learn how to not work for money you first need to work for free. The poor and middle class will never understand working for free. They will see it as unfair. Most people are controlled by the fear of not having enough money or the greed of wanting more than they need. Rich dad calls them the rat race. Money is running their lives but they don't want to admit it. It is better to confront your emotions with truth and act logically. For example, when a person says "I need to find a job" It is most likely the fear of not having enough money motivating them. I person who feels the same emotion but is thinking logically would say "What is the best solution to this fear long-term?". Jobs are important but they won't handle the fear and will lay a trap for you to remain in the rat race.
Why Teach Financial Literacy?: A life of wealth starts with financial literacy. The basic language of financial literacy is accounting. An asset puts money in your pocket. A liability takes money out of your pocket. It really is just that simple. The relationship between the profit-and-loss statement and the balance sheet is vital to defining assets and liabilities. The rich invent assets that generate income that pays for expenses and liabilities. Only financial intelligence can solve money problems. Concentrate your efforts on buying income-generating assets. Wealth is a person's ability to survive so many days forward-or, if I stopped working today, how long could I survive? Wealth is the measure of the cash flow from the asset column compared with the expense column.
Mind Your Own Business: There is a big difference between your profession and your business. Your business is your asset column, not your income column. You should keep your daytime job, you need stability when building your asset column. At the same time, begin buying assets that will go up in value, keep your expenses low, and reduce liabilities. Real assets include anything that does not require your constant attention and has the ability to generate income either now or in the future. Minding your own business means building a strong asset column. As your cash flow grows, you can then indulge in some luxuries paid for by your assets, not your income. You would be able to enjoy the luxury, your cash keeps flowing, and your lifestyle only changes for the better.
The History of Taxes and The Power of Corporations: Many people have the Robin Hood mentality when they say "The rich should pay more in taxes and give it to the poor." In 1913, an income tax became permanent in the United States with the adoption of the 16th amendment to the U.S. Consitution. The idea of taxes was made popular, and accepted by the majority, by telling the poor and the middle class that taxes were created only to punish the rich. In reality, it wound up punishing the very people who voted for it. The rich use corporations to limit their risk. A corporation is merely some legal document registered with a state government agency. The income-tax rate of a corporation is less than the individual income-tax rates. In addition, certain expenses could be paid by a corporation with pre-tax dollars. Most vehicles to reduce taxes are available to anyone, but it is the rich who find them because they are minding their own business. Paying for smart tax accountants and attorneys can be cheaper than paying the government. A strong financial IQ is made up of knowledge from four broad areas of expertise: Accounting, Investing, Understanding Markets, and the Law. Accounting is the ability to read and understand financial statements identifying the strengths and weaknesses of any business. Investing is the science of "money making money." Understanding markets is the science of supply and demand based on the current market conditions. The law includes the understanding of tax advantages and protection from lawsuits with the use of corporations. Financial IQ is the combination of the four technical skills to acquire and keep wealth.
The Rich Invent Money: It is excessive fear and self-doubt that are the greatest detractors of personal genius. Your financial genius requires technical knowledge, the ability to take risks, to be bold, and to let your genius convert that fear and self-doubt into power and brilliance. Today, wealth is in information. And the person who has the most timely information owns the wealth. The problem is that information flies around the world at the speed of light. The new wealth cannot be contained by boundaries and borders as land and factories were. So many people struggling today, often working harder, simply because they cling to old ideas. They want things to be the way they were, and they resist change. Old ideas are their biggest liability. The quickest path to wealth is to understand numbers and have creative financial minds. If the opportunities aren't coming your way, what else can you do to improve your financial position? If you can grasp the idea that money is not real, you will grow richer faster. The single most powerful asset you have is your mind. The more familiar you become with the four pillars of financial intelligence: accounting, investing, understanding markets, and the law, the easier it becomes to turn lemons into millions. The more sophisticated you get, the more opportunities will come your way. If you want to be a successful investor, you need to develop three main skills: find an opportunity that everyone else missed, raise money, and organize intelligent people. There is a lot to learn, but the rewards can be astronomical. There is always a risk, so learn to manage risk instead of avoiding it.
Work To Learn - Don't Work For Money: Without the financial intelligence of accounting, investing, marketing, and law, the only skill people know is to work hard when it comes to money. Stop looking for a high-paying job instead of working to obtain financial intelligence. Start looking at your future instead of your next paycheck. If you are like most people with a second job, it serves only to give 50 percent of what you earn to the government and still does not generate enough money. The reason you may be a talented person but are poor is that you focus on building a better product and know little to nothing about business systems. The more you specialize the more you trap yourself to be dependent on that specialty. The rich often groom their children to take over the family business by having them work in and learn all the aspects of the business. The base skill of personal success is the ability to sell and communicate. On top of the base skill, continue learning a little about a lot. Finally add the necessary management skills in cash flow, systems, and people. This is the perfect combination that can earn hundreds of thousands of dollars a year or more. To be truly rich, you need to be able to give as well as receive. If you are saying "Once I make some extra money, I'll give it" chances are high that you never will. especially since there is never any extra money. Instead you should focus on the most important law of money: Give, and you shall receive. Giving money is the secret to most great wealthy families. The more you give, the more you receive.
Overcoming Obstacles: The five main reasons why financially literate people may still not develop abundant asset columns that could produce a large cash flow are fear, cynicism, laziness, bad habits, and arrogance. The primary difference between rich and poor people is how they manage fear. Learn how to take a great failure and turn it into inspiration. It is the formula for all winners. Doubts and cynicism keep most people poor and playing it safe. Getting out of the Rat Race is technically easy. Criticism is blinded while analysis opens your eyes to see opportunities that everyone else misses. Overcome cynicism by focusing on what you want and how to get it. Do you stay busy just to avoid something you don't want to face? This is the most common form of laziness. So whenever you find yourself avoiding something you know you should be doing, be a little greedy and ask "what's in it for me?". Enforce a habit of paying yourself first and everyone else last, they will become your motivation. You will be forced to think, become smarter, and be more active when it comes to money. Arrogance will always lead to losing money because it is the belief that what you don't know is not important. Arrogance is often used to hide ignorance. Too many people in the world of money, finances, and investments have absolutely no idea what they are talking about. There is no wonder why most people lose money. Don't be ignorant or arrogant with your money. Always assume there is more you need to learn about money and find an expert on the subject to learn from.
Getting Started: Following these 10 steps will awaken your financial genius. Whether you use these steps or come up with your own, your financial genius is a power only you can unleash. Find a reason stronger than your current reality. Take control of your daily choices and cement strong wealth-building habits with your time, education, and money. Choose friends who will help you see all angles allowing you to make intelligent decisions. Follow formulas for quick success. Exercise self-discipline and pay yourself first. Hire professional brokers who own what they sell and pay them well. Pay attention to your initial money in an investment and get it back as quickly as possible so that you technically own an asset for free. Only use cash flow from your assets to buy luxuries. Find a hero who inspires you along your journey to wealth. Be generous with what you looking to get and you will get more in return. If you want money, give money. If you want to learn, teach.
Still Want More? Here Are Some To Do's: Robert Kiyosaki wants to leave you with 10 steps you should take action on today. Regardless if you follow each step or modify them to fit you better, the point is to take action. First, Stop anything that is not working towards the goal you are seeking. Keep your eyes open for new ideas that may help you get better or faster results. Find someone who has the knowledge and experience you want, buy them lunch, and pick their brain. Pay close attention in any classes on subjects that will help you. Make tons of protected offers even if you are not sure it's the right offer. Do what it takes to find and keep the right people on your team and in your deals. Spend significant time in your area s you can take note of hidden opportunities. Remember profits are made when you buy, not when you sell; shop the bargains. Find and organize other buyers to get the best big deal from a seller. Study bigger companies, what did they do when they were at your level? Finally, take action today. You will never receive the reward without taking action.
Final Thoughts: Increasing financial intelligence can solve many of life's common problems. Use this book to spark insights into the power of making money work for you. Remember it is easy to chase the big "get rich quick" or settle for the "play it safe" deals but your education and wisdom will encourage you to stay. on the sure-footed path. The key to becoming wealthy is the ability to convert earned income into passive or portfolio income. Start today by learning and building on the simple basics of investing. The rich do not work for money, They learn how to have money and work hard for them. With each dollar bill that enters your hand, you decide to be rich, poor, or middle class.
You should realize now that money is not a reason for failure or success. Its all about your financial intelligence. Unlike traditional school, there is no graduation date. You wouldn't want there to be because the more you learn and apply, the more success you will have in any area you apply it to. This is how you can start a business with no money. This is how you can pay for retirement. This is how money works.
Whether this was a refresher course or an introduction to Rich Dad Poor Dad, find one lesson you can start right now. Find a place in your schedule to work on it. Don't put this off any longer. All your dreams will be built on your progression of financial intelligence. It's going to be a journey, but its all very simple. It just requires that you commit.
Works Cited
Citation / Title
Kiyosaki, Robert. "Rich Dad Poor Dad: What the Rich Teach Their Kids About Money - That the Poor and Middle Class Do Not!" 1997.
