Rich Dad Poor Dad

If you were to stop working, imagine this for yourself. How long can you

survive on your remaining savings? What I just asked you was a definition

of wealth. Here is a man named Robert Kiyosaki, an American investor,

businessman, author, motivational speaker, and financial commentator

who became well-known in recent years; who has an estimated net

worth 80 million dollars.

Interestingly he wasn't raised in a wealthy background. In fact his family

was like most people who work but didn't have the best financial education

and often times struggled with money. So then how did Robert become rich

today? Let's take a look as he explains in one of his bestsellers called

Rich Dad Poor Dad

Robert Kiyosaki was born in Hilo Hawaii in April 1947. In 1957 at the age

of nine years , 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 Ph.D 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 not

rich himself, so he responded with, "Well, use your head, son." "Stay in

school, get good grades so you could find a safe and secure job. His real dad

is what he'll be referred to as a 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 to 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. 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

the cash flow pattern of a normal individual. This person earns his

income from a job and 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 at how the 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.

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

stocks , bonds, mutual funds, income-generating real estate, royalties,

notes, and anything else that has a 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

for having income equals expense and assets 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 an income

that is greater than the expense because assets are 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 studying 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 that I have kids. The other said the reason I must be rich is that

I have you kids. One said when it comes to money play it safe and don't

take risks. The other said to 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.

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Robert learned from his 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 the pattern of getting up, going to work, pay bills.

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, which 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 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; education and a job is important, but it won't exactly handle

that fear. To handle that fear, you need to learn the power of money, and

not be afraid of it.

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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 to 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 secure! 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 are

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 can proudly say I no longer work, money works for

money me.

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