What the rich teach their kids - That you can learn too
In Rich Dad Poor Dad, Robert Kiyosaki publically voices his concerns that most of the people in the world today do not have even a basic financial education. He is concerned that everyone is growing up with the beliefs that you have to go to school, study hard and get a good job. Robert shares why he thinks this formula to get rich seldomly works.
I read this book for the first time about two years ago and it really opened my eyes to see that there is an easier way to make money than getting up and going to work every day. Robert calls this the Rat Race and explains how people become trapped in this cycle year after year after year. He tells us how everyone can escape the Rat Race, but they must first learn basic financial intelligence.
The entire theme of Rich Dad Poor Dad is based around trying to give the average person a new point of view on money and how to make money. He shares with us that he comes from an average middle class family, and that his parents also taught him to get a job in this case his real dad is Poor Dad. While growing up, Robert had a friend whose dad had not completed school but was steadily building a business and assets and Robert was fortunate enough to spend much time with him while growing up, he is Rich Dad.
Robert talks of the lessons he received from Rich Dad while growing up. These lessons include the following:
The Rich don’t work for moneyWhy Financial Literacy is so importantWhy you should mind your own businessThe history of taxes and the power of owning a corporationThe rich invent moneyWork to learn – Don’t work for money
The key difference between the Poor, Middle Class and the Rich are what they buy. The poor and middle class buy stuff and liabilities, but the rich buy assets. Of course the rich do buy liabilities, but the difference is the rich buy these liabilities with income generated from assets, not from earned income.
Part of the general lack of financial knowledge, most people have no idea how to read financial statements. They don’t know what Income Statements or Balance Sheets are. Robert shows us a very basic way to read these statements using graphical diagrams. Using these diagrams Robert shows us the difference in cash flow between the classes and how it’s really not complicated to change our spending habits and escape the rat race.
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PS: Think you need to rob a bank to earn $10k a month?