Lesson's From Rich Dad Poor Dad

Lesson's from Rich Dad Poor Dad-

Many people work hard but they never seem to enough money in their life time. In this lesson we provide some valuable & golden words given by Robert Kiyosaki.

Rich Dad Poor Dad is Robert Kiyosaki's best selling book about the main difference in mindset of the poor ,middle class and rich people.

Everyone should go to school to get higher degree and then get a good job. Basically for our financial independence aim only. Our educational system is the number one cause of why many people struggle financially. Schools teach people "how to work for money, but they don't teach them how money can work for them." yes it was true money can work for us.

This lack of financial skills taught in school means that even highly educated people generally do not know how to handle money.The result is that the majority of people get trapped in work to pay their bills,debts,EMI all their life.

Introduction

Robert Kiyosaki had two fathers a rich one and a poor one.One was highly educated with a Phd and so intelligent and educated person in their society.He completed his undergraduate degree in only two years.The other father did not even complete the 8th grade.While both are worked hard, both are successful in their own field. There was always one who struggled with money. And the other dad is one of the richest man in the city.

By having two dad, with different thoughts and mindsets Robert found himself comparing the two dads a lot. It was totally hard to figure out which dad he should listen & follow him for their future.Because both are successful in their fields.

Difference between Rich Dad and Poor Dad-

Poor Dad: The rich should pay more in taxes.

Rich Dad: Taxes reward those who produce.

Poor Dad: Study hard so you can find a good job in a company

Rich Dad: Study hard so you can buy a good company

Poor Dad: Don't take risks.

Rich Dad: Learn to manage the risks.

Poor Dad: Struggle to save money.

Rich Dad: Create money from their investments.

Poor Dad: Teach how to get job.

Rich Dad: Teach how to create a job for other.

Lessons-

Lesson 1: "The rich don't work for money."
Lesson 2: "Why teach financial literacy?"
Lesson 3: "Mind your own business."
Lesson 4: "Work to learn , Don't work for money."
Lesson 5: "The rich invest in assets to make money."
Lesson 6: "Debt and taxes make the rich richer. Debt and taxes make the poor and middle class poorer."

The Ideas-

It's not how much money you make that matters. It's how much money you keep.
In generally "The poor and middle class work for money" and "the rich have money to work for them."
Rich people acquire assets to make money. The poor and middle class acquire liabilities that they think are i.e assets for them.
Financial game says what you do with money once you make it, how to keep people from taking it from you, how to keep it longer to make more money.

Chapter 1: The Rich Don't Work for money

When people read it they really misunderstand the title(above line),and mistakenly believe that the rich don't work.In fact i.e completely opposite.

The real truth is that the majority of rich people do work very hard to make money but they go about it differently than other people do. Rich people and the people who want to rich work and learn every single day how to put money to work for them.As the robert's Rich dad says that - "The poor and middle class work for money and the rich have money to work."

So many people says i am not interested in money,Yet they will work at a job for eight hours a day.Thinking that a job makes you secure is laying to yourself.

Robert Kiyosaki also notice that having a regular job is just a short-term solution to the long-term problems of creating wealth and financial freedom. It's fear that keep most people working a job: the fear of not paying their bills,debts and expenses,the fear of being fired,the fear of not having enough money.That's the price of studying to learn a profession or trade and working for money.

"People's lives are forever controlled by two emotions: Fear and Greed."

Chapter 2:Why Teach Financial Literacy?

The second chapter of Rich Dad Poor Dad explains the difference between an asset and liability.It simply defines how much money you make ,but about how much money you keep in your entire life.

"You must know the difference between an asset and liability."

Asset: According to Robert asset is something that has value,that produces income for us.Asset produces income,appreciate.

Liability: Liabilities take money out of your pocket because of the costs associated with them.

"An asset puts money in your pocket .A liability takes money out of your pocket."

That's because by definition, a personal residence isn't an asset unless it appreciates enough to offset the costs of ownership.On the other hand,rental properties is an asset because it can generate passive income for your expenses.

As Robert Kiyosaki writes in chapter 2 of the book ,"Want to grow rich? concentrate in buying income producing assets. When you truly understand what is an asset is, so u must keep liabilities and expenses low.

"Cash flow tells the story of how person handles money."

we always try to increase our asset column.that control our cashflow.

Chapter 3: Mind your own Business -

"Intelligence solves the problems and produce money."

There are two key messages provide by Robert:

Pay off your debts and start investing in income-producing assets as soon as possible.
Stay financially healthy by spending your time and investing as much of your money in assets to make more money.

"To become financially secure,a person needs to mind their own business."

The primary reason the majority of the poor and middle class are fiscally conservative is that they have no cling to their jobs and play it safe, they cant effort the risks.

Chapter 4:The History of Taxes and the power of Corporations-

When reading this chapter it's important to keep in your mind that Robert Kiyosaki wrote Rich Dad Poor Dad as a motivational book,not provide expert advise of financial or tax.

"The number-one expenses for most people is taxes."

Compares how business owners and investors with corporations such as C Corps,S Corps or LLCs pay taxes how must people pay tax:

Business owners with corporate structure:

Earn
Spend
Pay taxes

Employees who work for corporation:

Earn
Pay taxes
Spend

Notice that employees who work for somebody spend their money in tax previously but the business owners earn and spend before paying tax.

This chapter also covers the four main components of what Robert called "Financial IQ"- Accounting,Investment Strategy,Market Law,Law.

"A person can be highly educated,professionally successful,and financially illiterate."

As the book reminds us,understanding the legal and tax advantages significantly contribute to building long term wealth.

Chapter 5: The Rich invest in Money.

Investing money means finding opportunities or deals that other people don't have the proper skills,knowledge and resources.

Some of the major sources of investment in bank F.D's.In generally people invest their money in FD,RD,

SIP,mitual fund,PPF etc.

Some others look for market and do some research on the market to find the deal that make sense.

Robert says that each person is born with talent but that talent is suppressed because of self-doubt and fear. He remarks that it's not necessarily the educated smart people who get ahead but the bold and adventurous. People never get ahead financially even of they have plenty of money because they have opportunities that they fail to tap.Most of them just sit around waiting for opportunity.

Chapter 6: Work to Learn - Don't work for money

Robert's poor dad was intelligent and well educated and worked for money because job security meant everything to him but at the same time rich dad became a millionaire by working to learn.

Robert recommend to young people of the world to seek work for what they will concentrate on learning more than what they will earn.

Robert says he joined the Marines after graduating from college and learned the essential business skills of leading and managing people. After serving his country. Robert joined Xerox,to overcome his fear of rejection to become one of the top five salesperson in the company, then he left the corporate world to from his own business.

Here Robert discusses the synergy of management skills needed for success in business:

Cash flow management
Systems management
People management

"Financial struggle is often directly the result of people working all their lives for someone else."

Chapter 7: Overcoming Obstacles

The primary difference between a rich person and a poor person is how they manage fear.

Robert says there are five personality traits hamper human beings i.e Fear,Cynicism,Laziness,Bad habits,Arrogance.

Fear

Losing money is a fact of investing life and so is the fear that comes along with it .He notes that he is never meet a rich person who has never lost money, but he is meet some poor people who have never lost a dime because they have never invested.

Chapter 8:Getting started

Here Robert give some valuable tips about create and build personal wealth.

his first tip is find a reason greater than reality to motivate you.What he means by this is to wake up the financial genius in oneself by empowering the mind.Robert said that people must have a strong reason for living their life. The next tip is to feed your mind to good item . by feeding the mind we contends the people acquire power of choice.

"Most people simply buy investments rather than first investing in learning about investing."

Chapter 9: Still want more? Here are some To-Do's-

Here Robert give sort of supplement to the previous chapter. It gives readers additional tips to help them reach more financial rewards. Robert encourages readers to look ideas to pick brain of individuals who have experience and who have already done what one aspires to do. Robert advises on keeping the learning curve alive,taking courses and attending seminars etc.

Thank You....

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