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VIDEO SUMMARY
Transform Your Wealth: Unveiling the Essential Steps
Ready to level up your financial game? 💰
Ever wonder why some people seem to effortlessly build wealth while others struggle to make ends meet? 🤔
Well, get ready to have your mind blown! 🤯
We’ve uncovered some juicy secrets that could change the way you think about money forever. 💡
It’s time to ditch the old-school advice and dive into some real talk about financial success. 💪
Remember when your parents told you to go to school, study hard, and get a good job? 🏫
Yeah, turns out there’s more to the story than that! 🤷♂️
We’re talking about a whole new approach to making money—one that involves working smarter, not harder. 💼
Think you know everything there is to know about finances? Think again! 💡
We’re about to drop some knowledge bombs that’ll make your head spin. 💥
From redefining what it means to be “rich” to uncovering the secrets of the wealthy, we’ve got it all. 💰
So, if you’re tired of living paycheck to paycheck and ready to take control of your financial future, buckle up and get ready for a wild ride! 🎢
Trust us, you won’t want to miss this. 😉
#FinancialFreedom #MoneyMindset #WealthBuilding
Step-by-Step Guide
Step 1: Reevaluation of Traditional Advice
Description:
This step involves critically examining the conventional wisdom imparted by parents regarding life, money, and career choices.
Implementation:
- Reflect on the advice received from parents, particularly regarding education, hard work, and securing a good job.
- Acknowledge that while parents often advocate for going to school, studying hard, and finding stable employment, this may not necessarily lead to financial success.
Specific Details:
- Understand that conventional advice may not always be the most effective path to wealth accumulation.
- Question the assumption that formal education and traditional employment are the primary avenues to financial prosperity.
Step 2: Recognizing Educational Gaps
Description:
This step focuses on acknowledging the deficiencies in traditional education systems regarding financial literacy and wealth-building strategies.
Implementation:
- Reflect on personal experiences and education to recognize if financial literacy was adequately addressed during schooling.
- Consider whether the school curriculum provided practical knowledge on wealth creation, investment strategies, and financial management.
Specific Details:
- Understand that traditional schooling often neglects to teach essential financial skills necessary for building and maintaining wealth.
- Recognize that the education system primarily focuses on academic subjects rather than practical life skills, including financial literacy.
Step 3: Seeking Alternative Sources of Financial Education
Description:
This step emphasizes the importance of seeking alternative sources of financial education beyond traditional schooling and parental advice.
Implementation:
- Explore alternative resources such as books, online courses, seminars, and mentorship programs focused on financial literacy and wealth creation.
- Engage in self-directed learning by researching reputable sources and experts in the field of personal finance and investment.
Specific Details:
- Understand that valuable information on wealth creation and financial independence is readily available outside of conventional education systems.
- Embrace a proactive approach to learning about personal finance and wealth-building strategies from diverse sources.
Step 4: Introduction to “Rich Dad, Poor Dad” Principles
Description:
This step introduces the key principles outlined in the book “Rich Dad, Poor Dad” by Robert Kiyosaki, which serve as a foundation for financial success.
Implementation:
- Familiarize oneself with the core concepts presented in “Rich Dad, Poor Dad,” including the distinctions between assets and liabilities, the importance of financial independence, and the mindset of the wealthy.
- Consider how these principles challenge conventional notions of wealth accumulation and provide alternative perspectives on money management.
Specific Details:
- Recognize that “Rich Dad, Poor Dad” challenges conventional wisdom about money and offers valuable insights into building wealth.
- Understand that adopting the principles outlined in the book requires a shift in mindset and a willingness to challenge traditional beliefs about money and success.
Step 5: Understanding the Story of Robert Kiyosaki
Description:
This step delves into the backstory of Robert Kiyosaki and his early experiences that shaped his understanding of wealth and success.
Implementation:
- Learn about Robert Kiyosaki’s childhood ambitions and his desire to become wealthy.
- Understand the pivotal moment when Kiyosaki sought advice from his parents on how to achieve financial success.
- Reflect on Kiyosaki’s realization that traditional advice from his “poor dad” was insufficient for achieving his goals.
Specific Details:
- Recognize the importance of Kiyosaki’s upbringing and early experiences in shaping his perspectives on wealth and financial independence.
- Understand the significance of seeking guidance and mentorship from individuals who have achieved financial success.
Step 6: Critical Evaluation of Traditional Advice
Description:
This step involves critically evaluating the traditional advice provided by parents and its implications for long-term financial success.
Implementation:
- Analyze the limitations of the advice given by Kiyosaki’s “poor dad,” which focused on education and traditional employment.
- Consider the potential consequences of following conventional wisdom without questioning its effectiveness.
Specific Details:
- Reflect on the risks of relying solely on formal education and traditional career paths for achieving financial independence.
- Understand the importance of challenging conventional beliefs about wealth and seeking alternative strategies for building long-term prosperity.
Step 7: Introduction to Alternative Wealth-Building Strategies
Description:
This step introduces the concept of alternative wealth-building strategies beyond traditional employment and formal education.
Implementation:
- Explore the idea that financial success may require unconventional approaches, such as entrepreneurship, investing, and financial literacy.
- Consider the potential benefits of diversifying income streams and pursuing opportunities outside of traditional career paths.
Specific Details:
- Understand that there are multiple paths to financial success, and individuals may need to explore alternative strategies to achieve their goals.
- Recognize the importance of developing a holistic approach to wealth-building that incorporates financial education, entrepreneurship, and investment.
Step 8: Exploring the Lessons from “Rich Dad, Poor Dad”
Description:
This step involves delving deeper into the lessons presented in Robert Kiyosaki’s book, “Rich Dad, Poor Dad,” and understanding how they can be applied to achieve financial success.
Implementation:
- Study the core principles outlined in “Rich Dad, Poor Dad,” including the concepts of financial intelligence, leveraging assets, and building passive income streams.
- Analyze real-life examples and anecdotes provided in the book to illustrate key financial concepts and strategies.
- Consider how the principles from “Rich Dad, Poor Dad” can be implemented in personal financial planning and decision-making.
Specific Details:
- Recognize the transformative impact of “Rich Dad, Poor Dad” in challenging conventional beliefs about wealth and success.
- Understand the importance of developing financial intelligence and leveraging assets to build long-term wealth.
- Apply the principles learned from “Rich Dad, Poor Dad” to make informed financial decisions and pursue financial independence.
Step 9: Recognizing the Pitfalls of the “Poor Dad” Mentality
Description:
This step involves understanding the drawbacks of adhering to the mindset advocated by the “poor dad,” which emphasizes working tirelessly for others without building personal wealth.
Implementation:
- Acknowledge the potential consequences of following the traditional advice of prioritizing a stable job over wealth-building strategies.
- Recognize the societal pressures and fears that drive individuals to conform to conventional expectations regarding work and wealth.
Specific Details:
- Understand that adhering to the “poor dad” mentality may lead to a stressful lifestyle focused on endless work with limited financial rewards.
- Recognize the role of societal expectations in perpetuating the belief that a good job is the sole path to financial success, leading individuals to prioritize traditional employment over alternative wealth-building strategies.
Step 10: Challenging Conventional Beliefs
Description:
This step involves challenging conventional beliefs about wealth accumulation and recognizing the importance of seeking alternative approaches to financial success.
Implementation:
- Question the assumption that traditional employment is the most effective route to wealth and financial security.
- Challenge societal norms that equate hard work with financial success and explore alternative strategies for wealth creation.
Specific Details:
- Understand that fear often motivates individuals to adhere to conventional beliefs about work and wealth, even if those beliefs are limiting.
- Recognize the importance of challenging societal norms and seeking alternative perspectives on wealth accumulation and financial independence.
Step 11: Seeking Mentorship and Financial Education
Description:
This step emphasizes the value of seeking mentorship and financial education from individuals who have achieved financial success.
Implementation:
- Recognize the importance of mentorship in gaining valuable insights and guidance on wealth-building strategies.
- Seek out mentors who have practical experience in finance and entrepreneurship to learn from their expertise.
Specific Details:
- Understand that mentorship can provide invaluable knowledge and guidance on wealth-building strategies that may not be taught in traditional educational settings.
- Recognize the role of mentors in challenging conventional beliefs and providing alternative perspectives on wealth accumulation and financial independence.
Step 12: Learning the Value of Financial Independence
Description:
This step focuses on understanding the significance of financial independence and how it differs from merely working for money.
Implementation:
- Reflect on the distinction between working for money and having money work for you in achieving financial independence.
- Understand that financial independence provides freedom and flexibility, allowing individuals to pursue their passions and goals without being tied to a traditional job.
Specific Details:
- Recognize that financial independence enables individuals to break free from the cycle of working solely for income and opens up opportunities for personal fulfillment and growth.
- Understand that building wealth is not just about accumulating money but also about creating a lifestyle that aligns with one’s values and aspirations.
Step 13: Differentiating Between Assets and Liabilities
Description:
This step involves understanding the distinction between assets and liabilities, as explained by Mike’s rich father to Robert and Mike.
Implementation:
- Define assets as items that add money to one’s wallet and liabilities as items that take money away.
- Analyze examples to grasp the concept: a house, often considered an asset, can actually be a liability if it requires continual mortgage payments and taxes.
Specific Details:
- Understand the importance of accurately categorizing assets and liabilities for effective financial decision-making.
- Recognize that misidentifying items as assets when they are actually liabilities can hinder wealth accumulation and financial stability.
Step 14: Understanding the True Nature of Assets
Description:
This step focuses on comprehending the true nature of assets and how they contribute to financial well-being.
Implementation:
- Recognize that assets should generate income and contribute positively to one’s financial situation.
- Challenge misconceptions about assets, such as viewing a house solely as an asset without considering its ongoing expenses.
Specific Details:
- Understand that assets should not only retain value but also generate income or appreciation over time.
- Learn to distinguish between true assets, which contribute to wealth accumulation, and items falsely believed to be assets but actually drain financial resources.
Step 15: Embracing the Asset-Building Mindset
Description:
This step involves adopting an asset-building mindset and prioritizing investments that generate positive cash flow.
Implementation:
- Shift focus from acquiring liabilities to accumulating assets that generate passive income.
- Embrace the idea that wealth accumulation requires strategic investment in income-generating assets.
Specific Details:
- Understand that prioritizing the acquisition of income-generating assets is key to achieving financial independence and long-term wealth.
- Recognize the importance of continually reinvesting income from assets to further accelerate wealth accumulation.
Step 16: Analyzing Income Sources
Description:
This step involves analyzing the sources of income and understanding how they contribute to financial stability.
Implementation:
- Evaluate different sources of income, including earned income from employment and passive income from investments.
- Recognize the potential limitations of relying solely on earned income and explore opportunities to diversify income streams.
Specific Details:
- Understand that relying solely on earned income from employment may limit financial growth and security.
- Recognize the value of passive income generated from investments in building long-term wealth and financial independence.
Step 17: Embracing Financial Responsibility
Description:
This step emphasizes the importance of taking control of one’s finances and earning money for oneself rather than solely for employers.
Implementation:
- Understand the concept of taking responsibility for personal finances and generating income independently.
- Shift focus from dependence on employment income to actively building wealth through asset acquisition.
Specific Details:
- Recognize the significance of earning money through personal efforts and investments to achieve financial independence.
- Understand that financial independence requires actively managing one’s finances and prioritizing asset-building activities.
Step 18: Distinguishing Between Profession and Business
Description:
This step involves understanding the distinction between one’s profession (job) and one’s business (investment activities).
Implementation:
- Differentiate between the time and effort allocated to one’s job to meet living expenses and the time and resources invested in growing assets.
- Recognize the potential of investments in generating passive income and building long-term wealth.
Specific Details:
- Understand that focusing solely on a profession may not lead to financial independence, as income from employment is finite and often insufficient for wealth accumulation.
- Learn to allocate resources to both professional endeavors and investment activities to build a diversified income portfolio.
Step 19: Prioritizing Asset Acquisition
Description:
This step involves prioritizing the acquisition of income-generating assets over reliance on earned income.
Implementation:
- Recognize the importance of prioritizing investments in assets that generate passive income and contribute to long-term wealth accumulation.
- Shift focus from spending income on expenses to investing in assets that appreciate in value or produce ongoing income.
Specific Details:
- Understand that building wealth requires a shift in mindset from consumption to investment in income-producing assets.
- Learn to identify and prioritize investment opportunities that align with long-term financial goals and objectives.
Step 20: Developing a Wealth-Building Mindset
Description:
This step focuses on developing a mindset conducive to wealth accumulation and financial independence.
Implementation:
- Cultivate a mindset that prioritizes long-term financial goals over short-term gratification.
- Adopt a proactive approach to wealth-building, seeking opportunities to increase income and grow assets over time.
Specific Details:
- Understand the importance of adopting a disciplined approach to financial management and investment.
- Develop resilience to short-term setbacks and maintain focus on long-term wealth-building objectives.
Step 21: Recognizing the Importance of Financial Education
Description:
This step emphasizes the significance of acquiring financial knowledge and understanding its importance in making informed decisions.
Implementation:
- Acknowledge the lack of financial education in traditional schooling and the importance of self-directed learning in financial matters.
- Understand the implications of financial illiteracy and its impact on individuals’ ability to manage money effectively.
Specific Details:
- Recognize that financial education is crucial for making informed decisions about savings, investments, and retirement planning.
- Understand that financial literacy empowers individuals to navigate complex financial systems and avoid common pitfalls.
Step 22: Initiating a Financial Education Journey
Description:
This step involves taking proactive steps to educate oneself about financial concepts and strategies.
Implementation:
- Commit to obtaining financial education by following a structured learning approach.
- Begin the journey by evaluating current financial knowledge, setting goals, and acquiring the necessary skills and knowledge.
Specific Details:
- Understand that financial education is a lifelong journey that requires dedication and continuous learning.
- Start by assessing personal financial knowledge and identifying areas for improvement, such as understanding the principles of budgeting, investing, and retirement planning.
Step 23: Setting Financial Goals
Description:
This step focuses on establishing clear financial goals to guide wealth-building efforts.
Implementation:
- Define specific, achievable financial goals that align with long-term aspirations and objectives.
- Prioritize goals based on their importance and develop a plan to achieve them systematically.
Specific Details:
- Understand the importance of setting SMART (Specific, Measurable, Achievable, Relevant, Time-bound) financial goals to track progress and stay motivated.
- Consider both short-term and long-term financial goals, such as saving for retirement, purchasing a home, or starting a business.
Step 24: Investing in Financial Intelligence
Description:
This step involves investing time and resources in developing financial intelligence and acquiring the necessary skills and knowledge.
Implementation:
- Explore various resources for financial education, including books, courses, seminars, and workshops.
- Engage in continuous learning and skill development to enhance financial literacy and decision-making abilities.
Specific Details:
- Utilize a combination of self-study and formal education to build a strong foundation in financial concepts and strategies.
- Seek out reputable sources of financial information and advice, such as certified financial planners, industry experts, and educational institutions.
Step 25: Embracing Financial Courage
Description:
This step emphasizes the importance of cultivating financial courage to take risks and seize opportunities for wealth creation.
Implementation:
- Understand the significance of overcoming fear and taking calculated risks in financial endeavors.
- Develop a mindset of courage to pursue opportunities and navigate challenges in wealth-building.
Specific Details:
- Recognize that financial success often requires boldness and the willingness to step outside one’s comfort zone.
- Understand that fear of failure and societal disapproval can hinder financial progress, and cultivate the courage to overcome these obstacles.
Step 26: Recognizing the Role of Courage in Wealth Creation
Description:
This step highlights the role of courage as a key factor in distinguishing the wealthy from others and seizing financial opportunities.
Implementation:
- Understand that courage, along with financial knowledge, enables individuals to identify and capitalize on opportunities for wealth creation.
- Recognize that successful wealth creation often involves taking risks and making bold decisions.
Specific Details:
- Learn from the example of successful individuals who have demonstrated courage in pursuing financial opportunities and overcoming challenges.
- Understand that courage is essential for recognizing and seizing opportunities that others may overlook or hesitate to pursue.
Step 27: Combining Financial Knowledge and Courage
Description:
This step emphasizes the importance of combining financial knowledge with courage to maximize wealth-building potential.
Implementation:
- Develop a deep understanding of financial concepts and strategies to identify opportunities for wealth creation.
- Cultivate the courage to take action on financial opportunities and navigate challenges effectively.
Specific Details:
- Recognize that financial knowledge alone is not sufficient; courage is necessary to take decisive action and implement financial strategies effectively.
- Understand that successful wealth creation requires a balance of knowledge, courage, and action to capitalize on opportunities and overcome obstacles.
Step 28: Embracing a Learning Mindset
Description:
This step emphasizes the importance of adopting a mindset focused on continuous learning and skill development.
Implementation:
- Recognize the value of learning new skills and acquiring diverse knowledge in wealth creation.
- Embrace a mindset that prioritizes learning and personal growth over simply earning a fixed salary.
Specific Details:
- Understand that actively seeking opportunities to learn and grow professionally can lead to greater financial success in the long term.
- Cultivate a curiosity for new experiences and a willingness to step outside one’s comfort zone to acquire valuable skills and knowledge.
Step 29: Seeking Opportunities to Learn
Description:
This step involves actively seeking out opportunities to learn and gain practical experience in various fields.
Implementation:
- Explore diverse industries and job roles to gain exposure to different areas of expertise.
- Seek out positions or experiences that offer opportunities for skill development and hands-on learning.
Specific Details:
- Consider internships, volunteer work, or part-time jobs in industries of interest to gain practical experience and broaden your skill set.
- Take advantage of training programs, workshops, and mentorship opportunities to enhance your knowledge and expertise in specific areas.
Step 30: Valuing Broad Knowledge Over Specialization
Description:
This step emphasizes the importance of acquiring a broad base of knowledge and skills rather than specializing in a narrow field.
Implementation:
- Understand that a diverse skill set and broad knowledge base are more valuable in wealth creation than specialization.
- Prioritize gaining experience in multiple disciplines to build a versatile skill set that can adapt to changing circumstances.
Specific Details:
- Recognize that specialization may limit career opportunities and earning potential, whereas a diverse skill set opens doors to a wide range of opportunities.
- Embrace opportunities to work in different departments or industries to gain exposure to varied experiences and perspectives.
Step 31: Working to Learn, Not Just Earn
Description:
This step underscores the importance of viewing work as an opportunity for learning and skill development rather than solely a means of earning income.
Implementation:
- Shift your mindset to prioritize learning and personal growth in your career pursuits.
- Approach each job or opportunity with a mindset of curiosity and a willingness to acquire new skills and knowledge.
Specific Details:
- Understand that the real value of work lies not only in the paycheck but also in the opportunity to learn, grow, and develop professionally.
- Seek out challenges and opportunities for growth in your professional endeavors, and actively pursue avenues for skill development and learning.
COMPREHENSIVE CONTENT
Parental Teachings on Life, Money, and Career
What did your parents teach you about life, money, and pursuing a career? They probably told you to go to school, study hard, and get a good job afterward. However, believe it or not, that’s not the best advice. Although it’s what most parents tell their children and what most teachers repeat.
Learning about Making Money in School
What did you learn about making money in school? If your school was like most, then the answer is probably nothing. They never teach us what we need to become rich and maintain that fortune, but that information is available. Rich families pass it on from generation to generation, but how can you access it?
Lessons from the Book “Rich Dad, Poor Dad”
In the following minutes, we’ll explain the main lessons from Robert Kiyosaki’s book “Rich Dad, Poor Dad.” It was these very lessons that laid the foundation for Kiyosaki’s current fortune.
Lesson 1: Rich People Don’t Work for Money
One of the main lessons is that rich people don’t work for money. Before starting with the lessons, let me tell you a story: the story of Robert Kiyosaki. It all began in the 1950s when he was 9 years old. Robert and his friend were curious kids with big ambitions. They wanted to get rich and make a lot of money when they grew up, but they didn’t really know how they were going to do it.
So, after their failed attempt to create coins with melted toothpaste tubes, the boys decided to seek advice. They asked their parents how they could start getting rich. You’ll probably guess what the educated but poor father replied: “Go to school, study, and find a good job.” It’s a familiar advice, but not quite accurate.
Consequences of the Poor Father’s Advice
If you follow this kind of advice, you’ll spend your whole life working hard to increase your salary, while others, like the government, creditors, and your bosses, will take most of the reward. In other words, Robert’s poor father could have said: “Follow a stressful and rewarding lifestyle: the endless routine of working for everyone but yourself.”
Now, many people still follow the poor father’s mantra, but many do it out of fear, an intense sense of distress at the thought of breaking the societal expectations we’re ingrained with. We’re told that a good job is what generates wealth, so we study hard when we’re kids and work even harder when we’re adults. The result may be that we’re avoiding poverty, but certainly not
Teaching from the Rich Father
We’ll become richer, but there are some people who don’t teach that mantra to their children. People who know how to earn, increase, and maintain money: rich people, like Mike’s father, who became the financial mentor for both boys.
Dealing with Young Kiyosaki
What did Mike’s father suggest at first? Nothing. He struck a deal with young Kiyosaki and offered to teach him what he knew about money if the boy worked for him for a measly fee of 10 cents an hour. Robert agreed, but after a few weeks of receiving little money, the boy approached Rich Dad full of anger and ready to quit. “You’ve exploited me enough,” he said, “and you haven’t even kept your promise. You didn’t teach me anything about money all these weeks.” But there was his first lesson, conveyed by his new mentor, with a slight smile. Robert Kiyosaki had just learned that life often pushes you, and he had learned that working for money doesn’t make you rich.
The Rich and Their Relationship with Money
Why is that so, you might ask? Rich people don’t work for money. So, you might wonder next: if the rich don’t work for money, how do they become rich? They learn about finances, identify real assets, and invest in them. The rich get rich by making their money work for them. Instead of spending all their income on frivolities and luxuries, they invest a portion of it in various types of assets. And then, instead of working for money, they let their assets generate money for them. But let’s not get ahead of ourselves; let’s stay on track with Robert still being a child and the word “asset” not belonging to his vocabulary.
Difference between Assets and Liabilities
But Mike’s father, the rich father, was about to change all that. One day, he sat the boys down and explained that the rich buy assets, while the less affluent buy liabilities, often with the mistaken belief that they are actually assets. He explained that an asset is anything that puts money in your wallet. A liability, on the other hand, is something that takes money out. This difference is crucial and not well understood by many people.
Let’s analyze an example: a house is often considered
The House as a Liability
An asset, right? But it’s actually one of the biggest liabilities you can have. Often, buying a house means working your whole life to pay off a 30-year mortgage and property taxes, which means it takes money out of your wallet. A house bought with a mortgage works against you for two reasons. Firstly, you’re guaranteed to have a massive expense taken from your income every month for the next 360 months, and this is a liability. Secondly, those 360 payments could have been invested in much more lucrative assets that put money in your wallet.
Lesson about Assets and Liabilities
The rich father explained the lesson as simply as he could to the two boys: if you want to be rich, all you have to do is have real assets and buy them. Conversely, if you spend your life buying liabilities, you’ll never make it. A poor person’s salary is directly allocated to covering immediate expenses like rent, taxes, and food. A middle-class person’s salary must also cover similar expenses as well as obligations like a mortgage, student loans, credit cards, and other forms of debt.
But what about the rich? Instead of living off a salary, their assets generate enough money to sustain them and often leave them with enough money to reinvest, like in stocks, bonds, or rental real estate. The result of that reinvestment is that their income increases again, meaning the rich keep getting richer.
This is very important; I’ll say it again: if you can keep your liabilities and expenses low, you can invest what’s left in assets and make your money work for you. Do that, and in no time, you’ll have a small fortune accumulated.
Taking Care of Your Own Business
Do you object to this statement? Sure, it’s easy to criticize secure but stressful and low-reward jobs while recommending that people acquire assets. So, how can they buy those assets if they don’t have a job in the first place? Is money supposed to fall from the sky? Well, no, nobody is telling you to quit your daily job, at least not yet. What Kiyosaki does emphasize is the importance of taking care of your own business now.
That doesn’t mean staying out of other people’s lives, not in this context. It simply means taking care of your own finances and earning money for yourself as well, not just for your employers. In other words, taking care of your own business means earning money through your asset portfolio, rather than
through promotions, bonuses, and raises.
However, when it comes to personal finances, there’s a difference between your profession and your business. Your profession is what you do 40 hours a week to pay the bills, buy groceries, and cover other living costs. It usually grants you a specific title, like sales manager. Your business, on the other hand, is what you invest time and money into to help grow your
Relationship with Robert’s Process to Achieve Financial Success
So, how does this relate to Robert’s process of achieving financial success? When he was young, his poor father advised him to focus on finding a secure, well-paying job. His rich father, on the other hand, told him to start buying assets. Guess which advice he followed. Right, the one from Rich Dad.
Robert opened his first business at 9 years old. He paid a friend’s sister to rent comic books to the neighborhood kids. Others did the work; he just collected the money. Later, he also had a job during the day. In fact, he worked long hours as an employee of big companies like Xerox and Standard Oil of California. But at the same time, he kept his expenses and liabilities low, invested what was left of his salary, and built a thriving portfolio of assets that generated income.
That’s how Kiyosaki learned to take care of his own business. Yes, sure, he also had a job, but what ultimately made him rich was the increase in his assets. The time he spent working for companies and investing his earnings taught him to think of his assets as his own employees. Every dollar he invested in assets was working for him, generating money even while he slept. Sounds good, doesn’t it?
Well, if you want to get rich, adopt the same attitude. Your salary most likely won’t make you truly rich, even with promotions and bonuses included. What your salary can do is help you buy the assets that will enrich you. What’s the lesson? Learn to distinguish between your profession and your business because only one will make you rich. You know.
Financial Education
Most of us don’t receive financial education. Let’s go back to the story of Robert Kiyosaki when Robert and Mike were still
Experience with Rich Dad
When they were young, the rich father helped them and provided them access to his private businesses. They attended his meetings with bankers, lawyers, and accountants, and discovered what it meant to be a successful entrepreneur. As a result, the kids learned a lot and quickly. But soon enough, they started facing challenges.
Challenges with Conventional Education
The skills these kids were learning from Rich Dad made it very difficult for them to take school seriously. They had been told over and over again that studying and hard work naturally lead to success and wealth. The idea that financial education could also be important didn’t seem to occur to anyone else but Rich Dad. Children aren’t taught subjects like saving or investing, and as a consequence, they have no idea about topics like compound interest.
A clear proof of this is the fact that even high school students nowadays often max out their credit cards. This lack of knowledge about financial intelligence is a problem not only for today’s youth but also for highly educated adults, many of whom make poor decisions with their money.
Importance of Financial Education
Think about this: most people completely lack a retirement plan. In the United States, 50% of the workforce has no pensions, and of the rest, between 75 and 80% have ineffective pensions. It’s clear that society has taught us little to nothing about financial knowledge. But acquiring financial knowledge is one of Kiyosaki’s key lessons.
Steps for Financial Education
So, what can you do? Learn and start setting a financial strategy. Obtain financial education by following three steps: assess your current situation, set financial goals, and finally, develop financial intelligence to achieve them. You can start the journey towards personal wealth at any point in your life, but the sooner you do it, the better.
Assessment of Current Financial Situation
In the first step, make an honest analysis of your current financial status. With your current job, what kind of income can you realistically expect now and in the future? And what kind of expenses can you sustainably manage? You might find out that right now you can’t afford that new Mercedes you dreamed of. Remember to be honest and not dwell on money you don’t have.
Setting Financial Goals
After this, you can set realistic financial goals. You could say you want to get that Mercedes in 5 years. Kiyosaki’s wife, Kim, waited 4 years to buy her Mercedes with the earnings from their apartment buildings.
Developing Financial Intelligence
The next step is to start developing your financial intelligence. Think of this as an investment in your financial future. Learn about saving, investing, compound interest, and how to make your money work for you. In short, educate your financial minds so that you can make smarter decisions and achieve long-term wealth.
Developing the Mind as an Asset
Your greatest asset: the mind. Learn to manage money. For example, if you fear rejection, work briefly at a network marketing company. While you might not earn a good salary, you’ll gain many sales skills and self-confidence, which will be very useful in the future. You can also enhance your financial education in your spare time: enroll in finance classes and seminars, read books on the subject, and try to build connections with experts.
Got it. Let’s repeat these steps once more: assess your current situation, set financial goals, and finally develop financial intelligence to achieve them. If you base your finances on these basic components, it’s very likely that someday you’ll get rich and park that Mercedes in the garage.
The Importance of Courage in Financial Intelligence
Financial intelligence and courage enable the rich to invent money in any situation. The biggest change you probably need to make is learning to take risks. In the real world, it’s often not the smart ones who thrive, but the bold ones. Call it what you will: audacity, guts, boldness. Being brave enough to take risks is something all rich people have in common.
Why, well, if they don’t conquer fear, they’ll miss out on great opportunities in life. That’s why scholars and smart people often have financial troubles. Their fear of society’s disapproval prevents them from leaving the stressful, low-reward lifestyle and getting rich. And their fear of losing money is so strong that it prevents them from investing in stocks or other assets. They fail to realize that success always requires guts.
That’s why financial intelligence can be summarized in two key components: knowledge, of course, but also courage. It’s these two factors that distinguish the rich from others. Financial intelligence allows the rich to invent money in any situation. They can spot opportunities, know how to respond to them, and dare to move forward. From the outside, it seems like they’re just lucky. But in fact, they’re creating their own luck.
Sitting in Rich Dad’s business meetings, Robert and Mike learned a lesson that school didn’t teach them: in the real world, success requires courage, not just
Combating Hard Work with Financial Knowledge
Hard work, combine courage with financial knowledge to immediately spot opportunities and capitalize on them. In other words, you can almost invent money.
Working to Learn, Not Just to Earn
Don’t just work to earn, working to learn is much more important. So far, we’ve learned that you have to make your money work for you, as well as about financial intelligence and the value of being bold. But there’s one more important lesson to learn from Rich Dad.
When Robert graduated from college and landed a stable, well-paying job almost immediately, for most people, it would have been a dream come true, and that’s exactly how his educated but
poor father saw it. I mean, we already know, the poor father considered a secure career and persistent work the only surefire way to get rich. But the rich father didn’t think so, and neither did Robert.
After about 6 months, he quit his job and joined the Marine Corps to learn to fly. His poor father was baffled, but his rich father congratulated him. Why? Not because he celebrated recklessness, but because he understood very well what he was doing. Robert didn’t want to earn a fixed salary, but to learn. He sought a job that would teach him something useful. His rich father had instilled it in him: knowing a little about a lot was important for anyone who wanted to make money. That’s why he worked to learn, not just to earn. After all, his assets would make him money.
His poor father couldn’t understand it. In his view, Robert’s behavior was precisely the opposite of what allowed people to make money. He was an academic man, intelligent and well-educated, with a doctorate. His path in life had taught him that it was specialization, not a broad base of skills and knowledge, that would lead to wealth. In the academic world, the higher you rise and the more you learn, the more limited the subject of study becomes. Similarly, doctors want to specialize in a single chosen field, like orthopedics or pediatrics, as soon as they graduate. For some people, specializing might make sense. However, it didn’t help the poor father, whose doctorate never did much to increase his earnings.
The rich father, on the other hand, had a broad base of knowledge but never finished eighth grade. That’s why he encouraged young Robert and Mike to spend time in many different departments of his business empire. Over time, they worked in restaurants and construction, sales and marketing, accounts and reservations. The goal wasn’t to find a single field to develop their careers in, but to acquire the variety of skills and knowledge necessary to get rich. That’s why the sixth and final lesson is this: don’t just work to earn, working to learn is much more important.
