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 I have read the three main books in this series. While they are
not the best-written works I have ever laid my eyes on, in the words of author Richard
Kiyosaki, "I'm a best-selling author. Not a best-writing author."
These books are full of basic, practical
advice. The knowledge is not specific how-to information, so much as it is a guide
to thinking about your financial life. I found the work truly eye-opening and I have
been reading financial books since I was 19.
I highly recommend each of these books to
anyone interested in improving their financial well-being. These books will not make
you a millionare, but they will likely start you on the path to thinking like one.
Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money - That The
Poor and Middle Class Do Not! - By Robert T. Kiyosaki
(Notes and comments by John Barker)
Lesson One - The Rich Don't Work for Money
Two years ago I read Rich Dad, Poor
Dad : What the Rich Teach Their Kids About Money That the Poor & Middle Class Do Not!
By Robert Kiyosaki. The book really changed
how I think about money and how I “spend/invest” my time. The book has had a big influence on some of the
getSynergized philosophy, not just financially related either.
75
percent or more of the people who take our free
self-assessment rate
finances as the area of their life they are least
satisfied with.
If this is true for you too, I think you will
enjoy this series – and I highly recommend looking
into the Rich Dad products.
Lesson
One/Part One - The Rich Don't Work for Money
What do
the rich work for then? They work for the
knowledge that will help them learn to leverage their money. In other words, they work to learn how to make
their money work for them.
When we go
to a job, we are paid for an hour of work. When
that hour of work is complete, so is its ability to produce income. The rich learn to leverage that same hour of work
by creating assets; an asset is defined by Kiyosaki as anything that puts money in our
pocket. So the rich use that same hour of
work to produce ongoing income. That same
hour of work may produce an income stream for life.
Kiyosaki points out that for most people a job is a temporary solution to a long-term
problem. If you find yourself living from
paycheck to paycheck, you probably understand what he means. The average person works for money instead of
learning how to make their money work for them (we’ll discuss later in this series
how to get your money to work for you).
If you
find yourself in the position of working for an hourly wage – whether you are in
business for yourself or working for another, then you may want to ask yourself how what
you are doing is or could be creating a life-time asset.
Aside from money, what are you working towards? What skill are you learning or could you be
learning that will allow you to create leverage?
Rich
Dad, Poor Dad offers some really great educational
products. The
Cashflow
101 game is a ton of fun – and educational
too. A
friend purchased the game (it is expensive, and for
a reason) and invited other friends to come by a play
for $5 per person.
It was well worth the money for everyone –
and she not only paid for the game, but turned it
into a money making asset.
Fear
and Desire
Clever
marketing knows these are the motivating factors in the financial decisions of the average
person. Publishers Clearing House uses the
slogan, “You May Already Be a Winner”. Why? Because most of us have the desire to win millions
and the fear we may be throwing away a winning ticket.
Simply changing that slogan from “Enter to Win” significantly
boosted their business.
Fear and
Desire.
Fear of
being without money motivates people to work harder.
We want to work smarter, not harder. Fear
is the driving force that puts people in jobs they don’t like and keeps them there. Most financial decisions are made to avoid risk,
however, these decisions often put is in greater risk.
Anyone who has experienced the recent rash of layoffs knows what I mean.
Desire
causes us to make impulsive decisions. These
decisions often result in the removal of choice. When
high levels of bad debt (good debt puts money in our pocket, bad debt drains money from
us) are accumulated, we essentially forfeit at least a portion of our freedom to choose.
Today,
when you reach for your wallet, ask yourself whether you are purchasing out of a fear or
desire motivation. If the answer is yes, you
may want to reconsider your purchase. Seek to
make all purchases investments – in yourself or the accumulation of assets.
Some
questions to ponder:
1. If I don’t drive a nice car, what do I
believe that to mean about me?
2. Do I envy people with “more” than I
have and if so, what do I think they have that I don’t (other than financial
resources)?
3. Are the majority of my purchases assets or
liabilities? If a purchase provides ongoing
income, it is an asset. If a purchase
depreciates in value or requires upkeep, it is a liability.
Your
Greatest Asset
Financial
success does not require an Ivy League education, financial resources or a huge network of
connections. (See Bill Gates)
We are all
just an idea away. Yes, your greatest asset
is your imagination and your eye for opportunity.
Opportunity
doesn’t exist. You cannot buy a pound of
it at the grocery store. Opportunity is ever
present, depending on one’s point of view. Opportunity
is a function of attitude and outlook. One
person’s junk may be another person’s treasure as the say. The difference?
Imagination.
Today,
look at your world in a different way. When
you pick up a pen, ask yourself, “How is this pen an asset?” Or, “How could this book become an asset for
me?”
No object
is more significant than any other. You never
know where inspiration is going to come from and by staying open to the potential of all
things in your life you expand your possibilities.
Other Notes on Lesson One
Life pushes all of us around. Some give up.
Some fight. A few learn the lesson and
move forward.
If you think I’m the problem, then
you have to change me. If you realize
you’re the problem, then you can change yourself, learn something and grow wiser.
The rich have money work for them.
Fear of being without money motivates
people to work harder.
Desire starts us thinking about all the
things we can buy.
Most people are motivated by their
emotions – specifically fear and desire (pain and pleasure). Emotions take over and we react rather than think.
How
can we limit emotions?
How can we create an environment that
reduces reaction and encourages proaction?
If
fear and desire occupy our thoughts, is there room
to create?
Emotion = energy in motion
Look for opportunities
Lesson Two - Why Teach Financial Literacy
Rule One (The only rule)
Know the difference between assets and liabilities.
An asset is anything that puts money in my pocket.
A liability is anything that takes money out.
Wealth is the measure of the cash flow
from the asset column compared to the liability column.
How many days could you survive if you stopped working?
Income does not equal wealth.
Lesson Three - Mind Your Own Business
You must manage your own accounts, create your own business, have your own
investments. Seek the advice of others, but know your business.
Investment vehicles
- Business
- Stocks
- Bonds
- Mutual
Funds
- Income
producing real estate
- Notes
(IOU’s)
- Royalties
- Anything
else that produces income or appreciates in value.
“Excessive fear
and self-doubt are the greatest detractors of
personal genius.”(See
The
Abundance Course / Release Technique
)
Lesson Four
- The History of Taxes and Corporations
Own corporation
- Earn
- Spend
- Pay
taxes
Work
for corporation
- Earn
- Pay
taxes
- Spend
Corporate
spending is tax deductible (business spending
is tax deductible)
This game is awesome fun
- and highly educational. A friend of mine
purchased it and turned it into a real money-maker
by inviting friends to play for a small fee.
We were only too happy to pay to play!
Lesson Five
- The Rich Invent Money
Money is not real.
It is an idea and an agreement.
Value is an agreement.
Self-doubt
holds us back; it limits our options due to reluctance
to take risks.
Be
creative and “invent” ways to make money.
See potential; not “reality”.
Leaders have vision.
Followers must be shown.
Lesson Six
- Work to Learn -- Don't Work For Money
Take jobs that will only support you
in developing the skills to become a business
owner or investor. Learn to sell.
That is the bottom-line of business success.
(SPIN
Selling is highly recommended reading)
“I
am a best selling author, not a best-writing author.”
We
are only one idea or one skill away from great
wealth.
Editorial Reviews
Amazon.com
The rich are different from the rest of us, if
for no other reason than U.S. tax and securities
laws allow them to invest in ways that keep us
from catching up to them. That's why 90 percent
of all corporate shares of stock are owned by
10 percent of the people. Kiyosaki believes it's
possible for anyone to move up into that 10 percent,
but it takes a different view of investing than
most people have: it takes a plan to be a successful
investor. And a plan is more than simply buying
and selling, or collecting "assets"
that bring in no cash and are thus more akin to
liabilities. The way most people invest, "they
might as well be pushing a wheelbarrow in a circle,"
he writes. A plan is "mechanical, automatic,
and boring," a formula for success that has
worked historically for most of those who've used
it. Kiyosaki's "rich dad" (actually,
the father of his best friend) tells him the simplest
analogy is the game Monopoly: buy four green houses,
trade them for one red hotel, and repeat until
you become rich.
The overall message
of Rich
Dad's Guide to Investing is that
this is an abundant world, full of opportunity
for the sophisticated investor. However, it sometimes
takes a while to find this point. Much of the
book is told in dialogues between young Kiyosaki
and his rich dad, and these conversations can
ramble. There are rewards for the careful reader--for
example, in the middle of a section on the basic
rules of investing, Kiyosaki's rich dad compares
investor education to toilet training: difficult
at first but eventually automatic. But getting
to these inspired metaphors means wading through
a lot of repetitive dialogue. It's a bit ironic
that someone who advocates investor discipline
should show so little as a writer. But by the
end of the book, even the rambling starts to make
sense. By the hundredth time you read that the
rich don't work for money, and that you don't
need money to make money, both concepts start
to make sense. It still looks difficult to apply
these ideas, but Rich
Dad's Guide to Investing certainly
makes the case that they'll work for anyone bold
and smart enough to practice them. --Lou Schuler
Achieve
Riches
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