Rich Dad"
Dad is a poor man.

 

Robert Kiyosaki was born in Hilo Hawaii in April 1947 in 1957 at age nine years

old, little Robert was attending the same public school where the rich people sent

their children for his town had lots of doctors, business owners, and bankers

Robert saw that the rich kids would separate themselves from him for his

family wasn't able to afford the newest collections of toys and bikes like them.

So one day Robert asked his father who had a PhD and completed multiple

universities with excellent degrees, "Dad, can you tell me how to get rich?"

Unfortunately, his dad didn't know the right answer because he was a rich

himself, so he responded with, "Well, use your head, son." "Stay in school, get good

grades so you could find a safe and secured job. His real dad is what he'll be

referred as poor dad. He wasn't poor at this time, in fact, he was making lots of

money, but in the end, this man's financial life takes a turn for the

worse. Now little Robert has a friend named Mike and which Mike's father would

be referred as rich dad. Who started mentoring Robert and his son Mike about

how to really become rich. At this point in time, rich dad wasn't really rich yet

but soon became to be one of the wealthiest men in Hawaii. So then, what

did rich dad teach Robert? Rich dad poured a strong financial foundation into

these kids minds of many important principles. To start off, the first lesson

you need to know is you must know the difference between an asset and a

liability and that you need to buy assets. If you want to be rich this is

all you really need to know and understand the most! You see, the rich

acquire assets and the poor and middle class acquire liabilities but sometimes

they think they are assets. The primary cause of financial struggle is simply

not knowing the difference between an asset and a liability. "?" OH! Right! You don't even

know what an asset or liability is don't you? An asset is something that puts

money in my pocket. A liability is something that takes

money out of my pocket. For instance let's try cash flow pattern of a normal

individual. This person right here earns his income from a job and as

expenses are things like food, clothes, entertainment, and transportation

Unfortunately he doesn't have assets but sure does have liabilities that

constantly takes money out of his pocket because things like mortgages, taxes

credit cards, loans and believe it or not the house. Now let's take a look how to

cash flow pattern really works for the rich. Instead of looking to earn more

money from their normal job as the only source of income, they buy and own assets

that brings money into their pockets as a form of passive income. Passive income

is something that earns money that doesn't require you to trade your time

for it, so in other words you would be earning money even as you're sleeping.

Examples of assets are businesses that doesn't require your presence such as stocks

bonds, mutual funds, income generating real estate, royalties, notes, and anything

else that has value that produces income. As mentioned before, poor dad was making

quite a lot of money from his job but his expenses seemed to always keep up

with his income, never allowing him to invest in assets. As a result his

liabilities such as his mortgages and credit card debts grew greater over time

and this is the fault of having income equals expense and assets is less than

liabilities and sadly this is what drove poor dad into debt even after he passed

away. On the other hand, rich dad's personal financial statement reflects

the result of a life dedicated to investing and minimizing liabilities so

he has income that is greater than the expense because of assets is greater

than liabilities. This is practically why the rich are getting richer! Their assets

generate more than enough income to cover expenses with the balance

reinvested into the asset column. The asset column continues to grow and

therefore the income grows with it. You see, both dads worked hard, but they have

opposing attitudes and thoughts. One dad recommended study hard so you can find a

good company to work for. The other recommended study hard so you can find a

good company to buy. One dad said the reason I'm not rich is because I have kids. The

other said the reason I must be rich is because I have you kids. One said when

it comes to money play it safe and don't take risk. The other said learn to manage

your risk. One said I can't afford that. The other said how can I afford that?

Although both men had tremendous respect for education and learning they

disagreed on what they thought was important to learn.

Robert learned from rich dad that the truth about the general population, their

lives are run forever by two emotions, fear and greed, that keeps you stuck in a

pattern of get up, go to work, pay bill. Get up, go to work, and pay bills. Fear has

them in this trap of working, earning money, working, earning money and hoping

fear will go away of not having money. Instead of confronting the fear they

react emotionally instead of using their heads. The other emotion which is desire,

some call it greed, is a second reason why people also work for money. They

desire money for the joy that they think it could buy. But the joy that the money

brings is often short-lived and soon needs more money for more joy, more

pleasure, more comfort, and more security. You see that same fear and desire is

what makes a lot of people be so fanatical about going to school for a

better chance of a high paying job, but don't be discouraged an education and a

job are important, but it won't exactly handle that fear. To handle that fear, you

need to learn the power of money, not be afraid of it.

Unfortunately most schools don't teach about this and if you don't learn it,

you'll become a slave to money. Ignorance of money can cause so much greed and so

much fear that can lead you into life's biggest trap of constantly working. Rich Dad

said learn to use your emotions to think not think with your emotions.

Examples of emotional thinking are like I need to get another job!

I deserve a raise! I want this job because it is secured! Instead of clearly

thinking like is there something I'm missing here? This is our reality

for most people your profession is your income. The rich, your assets is your

income. Apply these lessons to your life for if I were to ask you about the

definition of your wealth if you would stop working today, how long can you

survive? You might laugh at me and say I no longer work for money, money works for me.