5 essential lessons from the Book 'Rich Dad, Poor Dad'
If you've ever searched "best personal finance books to
read" on Google, you've most likely seen the title "Rich Dad, Poor Dad" appear at the very top. The book, written
by Robert T. Kiyosaki and Sharon L. Lechter, has reportedly sold more than 32 million copies in 40 languages across 40 countries since it was
published in 2002.
"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 "rich dad" is Kiyosaki's biological
father, a highly educated college professor. The "poor 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?"
While
the advice in "Rich Dad, Poor Dad" — and from Kiyosaki himself — have garnered some
controversial attention, the book does offer a handful of power
lessons that can be useful to anyone looking broaden their views on money.
Here are some essential takeaways:
1. The rich buy assets, not liabilities
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."
Source: https://www.msn.com/en-us/money/personalfinance/5-essential-lessons-from-rich-dad-poor-dad/ar-BBV0Qgr
