WHAT WE CAN LEARN FROM RICH DAD AND POOR DAD
Have you ever wondered how the rich stay rich? Well, I’m sure many of us most certainly have thought about it at some point! And in a quest for the answer, you likely came across the book “Rich dad Poor Dad” by Robert T. Kiyosaki and Sharon L. Lechter.
Rich Dad Poor Dad is the story about Robert T.Kiyosaki and his “two dads”, and how their different financial views shaped his life. The “poor dad” is Kiyosaki’s biological father, a highly educated college professor. The “rich dad” is Kiyosaki’s best friend’s father, a wealthy entrepreneur who owns dozens of businesses.
But to make your life easier, we have put together the most important lessons you can take away from the book. But let us begin by first understanding the views of both the dads!
Poor dad’s financial views:
Poor dad believes in getting a stable job and working hard at it to earn money. He also believes that one’s financial status is based on one’s family background. People know that this mentality traps people in jobs they don’t love, but they continue to pay their bills.
Rich dad’s financial views:
Rich dad believes in working jobs that help you pick up the skills you need to be an entrepreneur. He believes in multiple income streams and also experience-based learning. He believes in owning the ladder, rather than working your way up the ladder.
LESSONS YOU CAN LEARN
1. The rich buy assets whereas the poor buy liabilities
Invest only if you can get something in return. The rich only buy assets, not liabilities. For example, a house or bonds, these only increase in value as time goes by. Liabilities are things that lose value over some time, such as expensive cars, gadgets etc. As the rich dad says, “The rich buy assets, the poor have expenses. The middle class buy liabilities they think are assets.”
2. Practicals over theory
While theoretical knowledge is good, it is the practical experience that will help one in life. So never lose an opportunity to learn practically. Take up jobs that will help you learn skills that will help you grow. Rich dad says that the most crucial goal is to learn how money works to make it work for you. Just studying and getting good grades alone won’t take you anywhere.
3. Look for opportunities
The “rich dad” forbids his kids from saying, “I can’t afford it.” This stops you from thinking further about how to make something possible.
Instead, he tells them to say, “How can I afford it?” This enables you to think of ways to make things possible. Maneuver your negative thoughts into positive ones. Look out for opportunities everywhere, and always keep your mind open for new possibilities.
For instance, if you have a dream vacation in mind, don’t think you can’t afford it. Instead, find ways by which you can make it happen. You could pick up a side hustle, or even invest to multiply your savings.
4. Get your fundamentals right
Robert says, “Intelligence solves problems and produces money. Money without financial Intelligence is money soon gone.”
Build a strong foundation for yourself by learning about finance. Understanding and knowing the what’s, why’s, and how’s about finance helps you manage your money better. This is crucial to keeping the money that you make.
5. Control your emotions
We always tend to give in to five emotions: fear, cynicism, laziness, bad habits, and arrogance. How one handles these traits makes a whole lot of difference. Stay positive and alert and find an emotional balance that helps you focus on accomplishing your financial goals.
For example, in the book, the poor dad keeps it safe and avoids risks. This may not work in your favor in the long-run. On the other hand, rich dad says, “Often in the real world, it’s not the smart who get ahead, but the bold.”
You can check out the book here: Rich Dad, Poor Dad