For years now, Robert Kiyosaki’s Rich Dad Poor Dad has sparked a lot of interest among people serious about improving their financial situation. It’s the perfect book to read if you want to learn about money, investing, practical strategies for your career, entrepreneurship, and so much more.
Here are ten valuable lessons that can be learned from this famous book:
1. The rich don’t work for money
Rich people know how to use their money to make more money or seriously grow the assets they already have. However, they also tend to view money as a means to an end rather than an end itself. For example, one of Robert’s friends makes $150K per year but spends $20K per month. That’s $240K per year, about the same as someone who makes $50K per year but only spends $24K each year. The second person views their income as a source of security rather than an opportunity to make more money.
2. The rich invent money
One of the most common questions that Robert Kiyosaki gets from students is the correlation between a person’s financial IQ and academic IQ. To this, he answers that it might be true that one of his friends who has an MBA from a prestigious school only makes $40K per year while another friend with no degree makes $250K per year. The latter friend is the one who invents money while the former friend spends his time working for it.
3. Work to learn, don’t work for money
Just because you don’t have money doesn’t mean that you can’t make it. It is why poor dad pushed Robert hard in school to learn as many different things as possible. With this mindset, he could always go back to school if he ever wanted to get a higher paying job. There’s no point in creating more money if you don’t know how it works or what opportunities are available for you.
4. The rich invent new ways of making money
To change your financial situation, you have to start by changing how you think about money and wealth. The problem with most people is that they only try to change their lifestyle after becoming rich. However, it would help if you spent some time learning about different ways of making more money before achieving the financial freedom that most won’t even dare dream of.
5. Financial IQ is more important than academic IQ
The world tends to assume that if you’re good at math, you must be smart in general. It can make it difficult for people who are bad at math but exceptionally intelligent in other areas. However, the truth is that having a high financial IQ is much more important than having a high academic IQ. That is why most people struggle financially even if they have a degree from a prestigious university.
6. Follow your passion but be willing to pay the price
Your passions can lead you far in life, especially when it comes to work and money. However, they may also make your life very difficult before you achieve success. To illustrate this point, Robert Kiyosaki talks about how he wanted to become a rock star before starting his career as an entrepreneur. Instead, he ended up working complex jobs that paid little but taught him many lessons that would prove helpful in the future.
7. You must know your financial position before you can improve it
Before you start thinking about improving your financial situation, you need to know where you’re starting from. It means that it’s essential for you to look at the assets and liabilities in your life before taking any meaningful action. You may even want to write down this information to have a clear understanding of what opportunities and dangers are available to you.
8. Sometimes, it’s best to avoid taxes
The rich don’t necessarily pay their fair share of taxes all the time. There are times when it makes more sense for them to avoid paying as much tax as possible, even if that means giving up a percentage of their wealth. That is how most people become rich in the first place, and Robert Kiyosaki advises you to think carefully about whether or not it makes sense for you to avoid paying taxes as well.
9. Being satisfied is a form of poverty
The last habit that rich dad instilled in Robert Kiyosaki was that he should never be satisfied with his current situation. That is why he encourages you to always look for opportunities for improvement. Even if your lifestyle has improved dramatically in the past, keep improving. There’s no point in celebrating or patting yourself on the back when there are other areas where you could still improve.
10. Money should serve a purpose
Your money shouldn’t just sit there gathering dust. If anything, you should use your money to improve your situation and achieve your goals. Whether you decide to spend it on a luxury item or invest it for the future, your money should always serve a purpose beyond being stored away in a savings account. When you look at things from this perspective, it suddenly becomes much easier to decide how you’re going to use your money in the future.
Now, let us summarize some key takeaways:
– Being rich means having a high financial IQ. It means it’s more important to learn about finances than earning academic degrees.
– It’s essential for you to know where you’re starting from before you can improve your situation. Write down all of your current assets and liabilities so that you can accurately assess your financial position.
– It’s often best to avoid paying taxes if it means that you’ll be able to keep more of your money. However, this doesn’t mean that you should always try to avoid taxes because there are times when it makes sense for you to pay them, especially if it means improving your quality of life.
– You shouldn’t be satisfied with your current financial standing because you should always look for ways to improve it. It means that you need to spend your money on things that will help you achieve your goals and avoid spending it on luxuries.
– Your money shouldn’t just sit in a savings account where it’s not doing anything. That is why you should try to spend it in a way that could improve your lifestyle.
Conclusion:
In conclusion, Robert Kiyosaki’s Rich Dad Poor Dad is a must-read for anybody who wants to learn about how they can improve their financial IQ. By reading this book, you will be able to develop the necessary habits that will allow you to improve your financial situation in future. You may even find that you’re already starting to make better financial decisions once you apply the principles instilled by Robert Kiyosaki.