I’ve been tired of working 9 hrs a day for money. I have an extreme desire of not having to think about money while spending. But I won’t be able to fulfill my desire if I go on doing what I’m doing and how I’m doing it. That’s the reason why I haven’t been able to get financial freedom.

So, while I was going through these thoughts and asking for suggestions. I was referred this book “Rich Dad Poor Dad” written by Robert Kiyosaki.

What the Rich Teach Their Kids About Money-That the Poor and the Middle Class Do Not!

Robert Kiyosaki, Rich Dad Poor Dad

To be honest this book has helped me a lot in understanding money. Here I’ve listed some points from each chapter that I thought would be helpful.

Important Points from each chatper:

  1.  The Rich don’t work for Money
    • The poor & middle class work for money. The rich have money work for them.
    • People’s lives are forever controlled by two emotions: fear and greed.
    • See what others Miss.
  2. Why Teach Financial Literacy:
    • It’s not how much money you make. It’s how much money you keep.
    • Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets.
    • Asset puts money in my pocket. A liability takes money out of my pocket.
    • An Employee works for company, government and bank.
  3. Mind your own business
    • The rich focus on their asset columns while everyone else focuses on their income statement.
    • Financial struggle is often the result of people working all their lives for someone else.
    • Start minding your own business. Keep your daytime job, but start buying real assets, not liabilities.
  4. The History of taxes and the power of corporation
    • “My rich dad just played the game start, and he did it through corporations” – the biggest secret of the rich.
    • If you work for money, you give the power to your employer. If money works for you, you keep the power and control it.
    • “Each dollar in my asset column was a great employee, working hard to make more employees and buy the boss a new Porsche.”
  5. The Rich Invent Money
    • Often in the real world, it’s not the smart who gets ahead, but the bold.
    • Games reflect behavior. They are instant feedback systems.
    • The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth.
    • The problem with “secure” investments is that they are often sanitized, that is, made so safe that the gain are less.
    • It is not gambling if you know what you’re doing. It is gambling if you’re just throwing money into a deal and praying.
    • Great opportunities are not seen with your eyes. They are seen with your mind.
    • Two types of investors, one who creates investment and other who invests on them.
    • How to create investment:
      • Find an opportunity that everyone else missed.
      • Raise money
      • Organize smart people.
  6. Work to Learn – Don’t work For Money
    • Job Security meant everything to educated dad, Learning meant everything to rich dad.
    • “You want to know a little about a lot” was rich dad’s suggestion.
    • Job is an acronym for “Just Over Broke”, workers work hard enough to not be fired, and owners pay just enough so that workers won’t quit.
    • Management of cash flow, system and people are the most important management skills.
    • Most important specialized skills are sales and marketing:
      • The ability to sell.
      • The ability to communicate to another human being be it a customer, employee, boss, spouse or child.
    • Communication skills such as writing, speaking and negotiating are crucial to a life of success.
  7. Overcoming Obstacles
    • Overcoming Fear:
      • For most people, the reason they don’t win financially is because the pain of losing money is far greater than the joy of being rich.
      • Failure inspires winners. Failure defeats losers.
    • Overcoming Cynicism:
      • “The sky is falling! The sky is falling!”
      • All of us have doubts which paralyze us.
      • It’s those doubts and cynicism that keep most people poor and playing safe.
    • Overcoming Laziness:
      • “I can’t afford it” shut down your brain. “How can I afford it?” opens up possibilities, excitement and dream.
      • Greed Beats Laziness.
    • Overcoming Bad Habits:
      • If I pay myself first, I get financially stronger, mentally and fiscally.
    • Overcoming Arrogance:
      • What I know makes me money, what I don’t know loses me money.
  8. Getting Started
    • Find a reason greater than reality: the power of spirit.
    • Make daily choices: the power of choice.
    • Choose friends carefully: the power of associations.
    • Master a formula and then learn a new one: the power of learning quickly.
    • Pay yourself first: the power of self-discipline.
    • Pay your brokers well: the power of good advice
    • Be an Indian giver: the power of getting something for nothing.
    • Use assets to buy luxuries: the power of focus.
    • Choose heroes: the power of myth.
    • Teach and you shall receive: the power of giving

Short Notes:

  1. See what others Miss.
  2. Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets.
  3. Start minding your own business. Keep your daytime job, but start buying real assets, not liabilities.
  4. Four broad areas of expertise for financial IQ:
    1. Accounting
    2. Investing
    3. Understanding Markets
    4. The Law
  5. It is not gambling if you know what you’re doing, it is gambling if you’re just throwing money in a deal and praying.
  6. How to create investment:
    1. Find opportunity that others missed
    2. Raise money
    3. Organize smart people
  7. “You want to know a little about a lot.” was rich dad’s suggestion.
  8. “I can’t afford it!” shuts down your brain. “How can I afford it?” opens up possibilities, excitement and dreams.
  9. Greed beats laziness.
  10. Every time I have been arrogant, I have lost money.
  11. Choose friends carefully: the power of associations.
  12. Brokers Rich = You more rich.
  13. The sophisticated investor’s first question is: “How fast do I get my money back?”
  14. To be the master of money, you need to be smarter than it.
  15. Choose heroes: the power of myth
    1. If they can do it, so can you
  16. Poor people are more greedy than rich people.

Some To-Do’s

  • Find someone who has done what you want to do.
  • Take classes, read and attend seminars.
  • Make lots of offer.
  • Jog, walk or drive a certain area once a month for 10 minutes.
  • Look for people who wants to buy first. Then look for someone who wants to sell.
  • Action always beats inaction.

Key to Financial Freedom

  • A person’s ability to convert earned income into passive and/or portfolio income.
  • Take Action: Invest on mind & learn to acquire REAL assets.

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