Robert Kiyosaki presented in his book "Rich Dad, Poor Dad" why we should question the social norms that good education will ensure
our success in life. He shared here the contrasting
life and advice of his poor dad versus his rich dad. This book will explain
why the advice “go to school, get good grades, and look for a safe, secure job”
will no longer work in our current generation and guide the readers on how we
can get out of that Rat Race.
Here are the topics discussed in the book:
- “It is foolish to assume that the
education the school system provides will prepare your children for the
world they will face upon graduation. Each child needs more education.
Different education. And they need to know the rules. The different sets
of rule….Money is not taught in schools. Schools focus on the scholastic
and professional skills but not on financial skills”
- “I noticed that my poor dad was poor
not because of the amount of money he earned but because of his thoughts
and actions”
Poor Dad
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Rich Dad
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Education
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With Ph.D and completed his four years of undergraduate
work in less than 2 years and then went to Stanford University,University of
Chicago, and Northwestern University
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Never finished the eighth grade
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Careers
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Both successful in their chosen careers and earned
substantial income
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Struggled financially all his life
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Became one of the richest men in Hawaii
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Left billions to be paid with his family
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Died leaving tens of millions of dollars to his family, charities
and church
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Views about Life
and Money
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The love of money is the root of all evil
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The Lack of money is the root of all evil
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Habit of saying “I can’t afford that”. “I’ll never be rich”
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How can I afford it? ( forces you to think more and find
ways). “I’m a rich man, and rich people don’t do this”
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“Study hard so you can find a good company to work for”
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“Study hard so you can find a good company to buy”
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“The reason I’m not rich is because I have you kids”
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“The reason I must be rich is because I have you kids”
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Forbade the subject of money to be discussed over a meal
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Encouraged talking about money and business at the dinner
table
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When it comes to money play it safe
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Learn to manage risk
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Our home is our largest investment and our greatest asset
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My house is a liability, and if your house, and if your
house is your largest investment , you’re in trouble
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Paid bills on time: paid his bills first
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Paid bills on time: paid his bills last
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Company or government will take care of you and your needs
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Believed in total financial self-reliance, against
“entitlement mentality”
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Struggled to save a few dollars
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Created investments
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Taught Robert to create impressive resume so he could find
a good job
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Taught Robert how to write strong business and financial
plans so he could create jobs
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Encourage Robert to study hard, earn a degree and get a
good job to “work for money”
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Encourage Robert to study to be rich, to understand how
money works and to learn how to have it work for me. “I don’t work for money,
Money works for me”
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6
Guideposts that will assist us to get wealthier according to what Robert
Kiyosaki learned from his rich dad:
- The Rich don’t work for money – Kiyosaki shared his experiences as a young boy, how he learned the value of earning and working for money and the valuable lessons he learned from his Rich Dad while working in his convenience store.
Rich Dad
explained the difference of man working for money versus money working for man
and how fear and greed(desire) push people to get into the Rat Race (get up,
work and paybills) instead of learning how money can work for them.
Rich Dad summed
up his lesson to the two boys in this: “Never
forget, because your two emotions fear and desire, can lead you into life’s
biggest trap, if you’re not aware of them controlling your thinking. To spend
your life living in fear, never exploring your dreams, is cruel. To work hard
for money, thinking that money will buy you things that will make you happy is
also cruel. To wake up in the middle of the night terrified about paying bills
is a horrible way to live. To live a life dictated by the size of a paycheck is
not really a life. Thinking that a job will make you feel secure is lying to
yourself. That’s cruel, and that’s the trap I want you to avoid, if possible.
I’ve seen how money runs people’s lives. Don’t let that happen to you. Please
don’t let money run your life.”
- Why teach financial literacy? - “It’s not how much you make, its how much money you keep and how many generations you keep it”. Kiyosaki explained the importance of financial literacy and how dangerous it is for someone who have money without the knowledge in handling it. He stressed the importance of learning the difference between asset and liabilities. He also noted that many of the great financial problems are caused by going along with the crowd and “keeping up with the Joneses”
- Mind Your Own Business – “Financial struggle is often directly
the result of people working all their life for someone else. Many people
will have nothing at the end of their working days”
People should
mind their own business to grow their assets rather than focus on working for
other people’s business and earning income which are subject to more taxes in
order to become financially secure. But he also suggested that you can keep
your daytime job but start to build your own business or grow your assets.
- The History of Taxes and the Power of Corporation – Robert Kiyosaki explained the history of how taxes came about in the United States and how instead of taxing more from the rich people it backfired to the middle and lower classes. The rich class plays smarter and takes advantage of the legal structure of corporation to protect it from taxes or minimize its taxes compared to middle and lower classes.
According to
Rich Dad, the biggest bully after having riches is the tax man. If you let
them, they will take more money from you that’s why it is important to be
financially literate so we can understand the laws and systems to protect our
assets.
The main
difference in the taxes of corporation and working class is that “employees earn and get taxed and they try
to live on what is left” while corporation earns, spends everything it can, and
is taxed on anything that is left.
- The Rich Invent Money – According to Kiyosaki “Your financial genius requires both technical knowledge and courage. If fear is too strong, the genius is suppressed.” He encourages people to be bold in taking risks in creating wealth rather than playing it safe and staying poor.
- Work to Learn - Don’t Work for Money – Great talent is not enough to become successful or rich you’ve got to learn skills that would practically help you in running your business, there are so many highly-specialized and talented people but are still poor. Kiyosaki expounded his experiences when he started working for companies and why he needed to quit many times to learn many areas of business, he valued the knowledge he could gain rather than the security of receiving salary. He learned accounting, leadership, sales and marketing and how to start and manage his own company.
Among the
important management skills needed to succeed are: management of cash flows, management of systems, management of people
and as well as learning sales and
marketing.
The author also mentioned roadblocks that could prevent you from
being successful or rich even if you are financial literate:
- Fear – “Failure inspires winners. And failure defeat losers..The greatest
secret of winners is that failure inspires winning; thus they are not
afraid of losing.”
- Cynicism – “It often takes courage to not let rumors and talk of doom and
gloom affect your doubts and fears.”..
-”Cynics criticize and winners analyze”
- Laziness – “Lazy by staying busy”, avoiding the issues that needs to be resolved. Learn and practice asking yourself “How can I afford something?” rather than saying directly “I can’t afford it”. Immediately saying “I can’t afford this” is laziness in using our brains on how we can improve our lives.
- Bad habits – “Our lives are a reflection of our habits more than our
education.”
- Arrogance – “Ego plus ignorance.”
Ten Steps to Awaken Your Financial Genius that will help you to start Freedom
from Rat Race Journey:
- Need a Reason Greater than Reality – Power of Spirit. Find your purpose in life or strongest reason for wanting to be rich, your “wants and don’t wants”
- Choose Daily – Power of Choice. What
we become is the result of our daily choices. “With every dollar we get in our hands, we hold the power we choose
our future to be rich, poor or middle class. Our spending habits reflect
who we are.” It is important to choose to learn or invest in our education;
we have the choice what we will put in our mind.
- Choose Friends Carefully – Power of Association. “Don’t listen to poor or frightened people.” Look for friends that have the same interest as you do like in money matters or investing so you can both learn from each other. Be true to yourself and not to go along with the crowd.
- Master a Formula and then Learn a New One – Power of Learning Quickly. If a strategy doesn’t work find another way immediately.
- Pay Yourself First – Power of Self-Discipline. According to Kiyosaki, self-discipline delineates the rich from the poor and middle class. And the most difficult is practicing self-discipline in “paying yourself first.”
- Pay Your Brokers Well – Power of Good Advice. Invest in highly-paid but effective professionals like your accountant, brokers, lawyers in the end getting their services will create more income and lessen your expenses because of the excellent services they can give to you and your business.
- Be an “Indian” Giver – Power of Getting Something for Nothing. In every investment you will make you should always ask yourself: How fast do I get my money back?
- Assets buy luxuries – Power of Focus. We should learn to focus in creating wealth assets in order to buy the luxuries we want rather than borrowing money to buy luxuries. Be the master of your money; don’t let it run over you.
- The Need for Heroes – Power of Myth. Look for heroes in your field of business, learn from them and be inspired with their success.
- Teach and You Shall Receive – Power of Giving. Robert Kiyosaki believes that “Whenever you feel short or in need of something, give what you want first and it will come back in buckets. That is true for money, a smile, love, friendship”. Same goes with learning, when you share your knowledge the more you will learn in the process.
It is an eye-opening lessons from
Robert Kiyosaki’s Rich and Poor Dads, looking thru the brain of rich people are
a great deal to see what works in the real world and how you could succeed like
them. The book lay down the most valuable lessons we cannot learn from school
in handling our lives and finances, it pulls us out of the daily grind and see
for ourselves what is really happening. But what is more important is that it
gives us a set of action plans, inspirations on how to change our lives in
building our assets and as well as contributing to society. This book is for those
who are not afraid to take risks, who strive for higher ideals and those who
want to change their current rat race lives.
Read the complete book “Rich Dad,Poor Dad” by Robert Kiyosaki to learn more about the summary of lessons
presented here.
Learn more from Robert Kiyosaki
by visiting his site: http://www.richdad.com/
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