January 26, 2023

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20 tips/lessons from the book “Rich Dad, Poor Dad”

1. Don’t work for money:

Rich don’t work for money. If you work for money, your mind will start thinking like an employee. If you start thinking differently like a rich man, you will see things differently. Rich works on their asset column, every dollar in their asset column is their hard-working employee.

2. Don’t be controlled by emotions:

Some people’s lives are always controlled by the two emotions of fear and greed. Fear keeps people in this trap of working hard, earning money, working hard, earning money, and hoping that it will reduce their fear. Secondly, most of us have the greed to get rich quickly. Yes, many people become rich overnight, but they have no financial education. So educate yourself and don’t be greedy or fearful.

3. Acquire assets:

Don’t buy liabilities on your way to financial freedom. People buy liabilities and think these are assets, but they are not. Many people buy luxuries first, like big cars, heavy bikes, or big houses to live in. But the rich buy assets and their assets buy luxuries. The rich buy houses and rent them, and they pay them for their Lamborghinis. The poor or middle class buy luxuries first, and the rich buy luxuries last.

4. Remember the KISS principle:

KISS stands for keeping it simple, stupid. Don’t be too overload your mind when you are going to start your way to financial freedom. Things are simple and keep them simple. The simple thing to remember is assets put money in pocket and liabilities take money out of pocket. Always buy assets so they put money into your pocket.

5. Know the difference between assets and liabilities:

Assets are anything that puts money in your pocket, like stocks, bonds, real estate, mutual funds, rental properties, etc. Liabilities are anything that pulls money out of your pocket, like your house, your car, debt, etc. People think their home is their biggest asset, but it is not. A house is an asset when it generates money like when you rent a house, it generates money, and when your life in that house becomes a liability.

6. Don’t be a financial illiterate:

A person can be highly educated and become successful in their profession, but financially illiterate. Financial education is very important for any individual. Our schools and colleges did not teach us financial education. Many financial problems arise as a result of a lack of financial education. Start learning financial education and I suggest you read the book “Rich Dad, Poor Dad”.

7. Increase your Wealth:

Wealth is defined as a person’s ability to survive for a certain number of days in the future, or how long they could survive if they stopped working today. Consider your wealth and whether you would survive if you stopped working today for a year.

8. Mind your own business:

If you have a job, keep your job and start a part-time business and work it. Use the time that you spend on your iPhone, parties, or any other activity, to build your business. Never leave your job until you build your own business. Don’t struggle all of your life for someone else. Start your own business and grow your business.

9. Train your mind:

Your biggest asset is your mind. Many individuals watch opportunities with their eyes, but if you train your mind, you can see opportunities with your mind. If you train your mind well, it can create enormous wealth.

10. Learn technical skills:

Your financial IQ will be raised by learning these four technical skills:

  • Accounting is defined as the ability to read numbers. If you want to build an empire, then this is an essential skill. By learning this skill, you will be able to understand the strength and weaknesses of a business.
  • Investing: It is the science of making money.
  • Understanding markets: It is the science of supply and demand.
  • The Law: A person who has knowledge of the law of tax advantages and corporations can get rich faster than others.

11. Find opportunities that everyone else missed:

Great opportunities are not seen with your eyes. They are seen with your mind. 

You can see many more opportunities with your mind than many people miss with their eyes. It is not rocket science, you just need to train your mind.

12. Learn to manage risk:

Investment is not risky, not knowing the investment is risky. If you want to reduce the risk, then increase your knowledge. This knowledge will not come by going to college, it will come by reading books or sitting with people who know the investment.

13. Learn management:

The main management skills are:

  • Management of cash flow
  • Management of system
  • Management of people

Sales and marketing are the most essential skills. The ability to sell and the ability to communicate with another human being, be it a customer, employee, fiancé, friend, or child, is a basic skill of personal success.

14. Manage fear:

“Failure inspires winners. Failure defeats losers.”

Everyone has a fear of losing money. It is a general thing. The rich also have a fear of losing money, and most rich people lose a lot of money. But the main difference between the rich and the poor is how they manage fear. For many people, the fear of losing money is much more terrifying than the joy of having money.

15. Find a reason:

Everyone wants to be rich, but many of us don’t want to struggle. People often ask me why I want to be rich. I answered that I don’t want to die poor. Choose your reason, like you want to help others, you want to build hospitals or you want to travel freely. If you don’t have a reason, then it is difficult to stay on this path.

16. Choose friends carefully:

Do not choose friends by watching their financial statements. Choose friends from among the rich as well as the poor. Learn from both. Both will tell you the best lessons but choose carefully.

17. Pay yourself first:

If you cannot get control of yourself, then it is difficult to get rich. If you lack management, then it is difficult to be rich. First, pay yourself. People often buy cars or luxuries when they have money. On the other hand, the rich buy assets, and their assets buy luxuries for them.

18. Use assets to buy luxuries:

When you get paid by your job or when you earn some money, don’t buy luxuries first. Buy an asset and your asset will pay you for your luxuries. Poor buy luxuries first and the rich buy luxuries last.

19. Understand the power of giving:

“God does not need to receive, but humans need to give.”

If you want money, start giving money. If you give, you will receive more than you give. Always do charity in your life. It should be your habit.

20. Read books:

In this book, Robert mentions many books that you need to read. Reading books will open your mind and you will learn too many things. I suggest you read all the books by Robert T. Kiyosaki. This will open your mind and may give you a good direction in your life.

Thank you.

Source: 20 tips/lessons from the book “Rich Dad, Poor Dad”

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