“Golden Rule: He who has the gold makes the rules.” (pp. 125)
If you have the time to read “Rich Dad Poor Dad” I highly recommend you do so. It is an amazing and mind-capturing book that teaches you very important financial life lessons. If you don’t enjoy reading entire books, feel like you “don’t have the time to read an entire book,” or would rather just gather key points from important literature, here are my key take aways from this read.
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- Education on how many works trumps the power of simply having money.
- Don’t work for money. Make money work for you.
- Do not let fear direct your reaction to money.
- Fear and greed (or desire) direct our financial decisions. Learn to control them.
- Do not learn to just be a “bean-counter,” those that simply “look at the numbers, fire people, and kill the business.”
- Job = “short term solution to a long-term problem”
- Retirement is like growing a tree. You water a tree for years, but one day, the tree does not need you anymore (you do not need to work) but still thrives (assets still grow).
- “Rich people acquire assets. The poor and middle class acquire liabilities”
- Invest in stocks, bonds, real estate, notes, intellectual property
- “Smart”/Educated does not equal Financially literate
- Before buying a liability, invest in an asset that will provide the cash flow for the liability
- Increase assets and income; Decrease expenses and liabilities
- Wealth= how long could you survive without working
- Higher income = higher taxes
- Know the difference between an asset (increases money) and a liability (takes money). Acquire assets.
- Focus on your assets, not income statements
- Once a dollar goes into an asset, let it work for you. Never let the dollar out. Only multiply.
- Financial IQ = Knowledge of: Accounting + Investing + Understanding Markets + The law + Tax advantages + Protection from lawsuits
- Utilize assets to create passive income, then use that income on tax-deductable expenses
- Market comes and goes, either be the person begging for your job or the person transitioning your assets into millions
- Smart investor = Three main skills: Find an overlooked opportunity + Raise money + Outsource smarts (recruit based on needs)
- Work for experience, not just finances
- Successful Management System = Manage cash flow + Manage systems + Manage People
- Manage “fear, cynicism, laziness, bad habits, arrogance”
- Find purpose, Manage daily choices, Choose your circle, “Master a formula and then learn a new one,” “Pay yourself first”
All key points and content provided in this article derived from the source “Rich Dad Poor Dad” by Robert T. Kiyosaki. Concepts and text ideas are credited toward the author of the book.