Rich Dad Poor Dad Book Review
Many of us may understand the benefits of savings, however, we may not know how to create or manage our money. There is a range of books that cover personal finance, from Napoleon’s ‘Think and Grow Rich’ to Thomas J. Stanley’s ‘The Millionaire Next Door’. One of the best-selling personal finance books ‘Rich Dad, Poor Dad’ by Robert T. Kiyosaki helps to open up your mind on how to improve your financial knowledge.
"Rich Dad, Poor Dad" is an allegorical story about Robert Kiyosaki and his two dads, and how growing up with them shaped his financial views. 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. Both dads offer conflicting advice on money.
"Poor dad" mentality
"Poor dad" believes that one should work for money as a single-salaried employee at a stable job, and that a person's wealth largely depends on their family background. He believes that the most important things you can do to financially survive (or accumulate wealth) is to read and learn from successful people. Many people think this mentality can trap a person into working a job they don't love, but is willing to stick with because they have to pay the bills.
"Rich dad" mentality
"Rich dad" advises Kiyosaki to get a job so he can learn the skills required to be an entrepreneur. Wealth comes from experience-based learning and multiple income streams. When the "poor dad" encourages working your way up the ladder, "rich dad" laughs and says, "Why not own the ladder?"
An asset is anything that puts money into your pocket, like a bond or house (that you purchase and then rent out to other people). A liability is anything that costs you money because it loses value over time, like an expensive car or television set. It's important to be able to distinguish the two. "The rich buy assets. The poor only have expenses. The middle class buy liabilities they think are assets," writes Kiyosaki.
2. Financial literacy can only be learned through experience
The well-educated "poor dad" says, "Studying hard and getting good grades is the only way to secure a good job at a big company with excellent benefits. But the "rich dad" says that the most important goal is to learn how money works so you can make it work for you. To be financially smart, Kiyosaki says you must master accounting, investing, markets and the law. The more you broaden your skills, the more successful you'll be.
3. Learn to sell
In the book, a woman with a master's degree in English literature asks Kiyosaki how she can become a best-selling author. He tells her to enroll in a sales-training course. Shocked by his answer, she says, "You aren't serious, are you..." Kiyosaki picks up a book on the coffee table and says, "There's a reason successful books say 'best-selling author,' not 'best-writing author.'" Selling is a crucial skill if you want to be rich, he explains. Get out of your comfort zone, practice selling and network. If you don't, you'll never be able to run your own business.
4. Fear and self-doubt are your greatest barriers to success
The primary difference between the rich and the poor is how they manage fear. "Poor dad" keeps it safe and avoids risks. This perspective can be costly in the long-run. "Often in the real world, it's not the smart who get ahead, but the bold," says "rich dad."
5. Always think in terms of opportunities
The "rich dad" forbids his kids from saying, "I can't afford it." Instead, he tells them to say, "How can I afford it?" The first phrase shuts down a person's brain, and they no longer have to think. The second one opens up "possibilities, excitement and dreams." It forces the brain to search for answers. Kiyosaki learns that the "primary reason the majority of the poor and middle class are fiscally conservative—which means, 'I can't afford to take risks'—is that they have no financial foundation."
6. You have a choice in life.
We often fail to realise that we have the ultimate ability to choose how we live, how we earn our income and how we spend it. In this day and age, there are a plethora of ways to generate income. Instead of staying at a job we don’t like for the sake of paying bills, ‘Rich Dad, Poor Dad’ encourages us to explore more options on how to make money in order to escape from the rat race.
7.Mastering your emotions is necessary when dealing with money
Learn to use your emotions to think, not think with your emotions
Although mastering your emotions can be a tough one, it is possible. In ‘Rich Dad, Poor Dad’ Roberts rich dad states that the two emotions that trap most people in life are fear and desire. Fear and desire can certainly affect an individual’s thought process leading them to make decisions that aren’t rational.
By choosing your thoughts you can confront fear, weaknesses and any other emotions you may experience. You can also begin to think of different solutions to your financial difficulties, rather than allowing your emotions to control you and your monetary situation.
8. It teaches you that learning doesn’t end when you leave school
When you leave compulsory education most people believe that education is done. Whilst you may be done with education, there is no end to learning. If you want to gain more income or make money work for you, then it starts with learning. Whilst money is needed in order to function in today’s society, the only way to gain more income is to gain more financial knowledge.
Building wealth takes time and understanding, take the time to understand money and how it can work for you.
Money without financial intelligence is money soon gone
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