Summary of Wealth and Financial Freedom

A summary of group of books that talk about wealth and financial freedom, such as Rich Dad Poor Dad.

After reading few books that talk about wealth and financial freedom, such as the book “Rich Dad Poor Dad,” The Richest Man in Babylon, Million Dollars a Minute, Secrets of the Millionaire Mind, and others. I noticed that they are not very different from books of human self-development that are full of encouragement and charging positive energy, they encourage you to go fishing, but they do not teach you how to fish and do not tell you what you need at all, and this type of book I detest. But in the folds of these books I found some benefit that I extracted for you here, so I wish you the benefit.

Most of them tell that financial freedom is that you have money even without working, so you have a passive income, you have sources of money, you spend as much as you want without your resources ending, and your financial resource is not related to your work without it! This allows you to devote yourself to a lot of things instead of just caring about work and dedicating all your day for it.

Many of us believe that in order to become rich and be among the billionaires and giant investors, we have to create our own project. Some of us even think that investing is to inject your money into a private project for you or one of your acquaintances. You have to save for that.

But the truth is that establishing a private project is one thing, investing is another. The secret to achieving wealth is completely different from what we used to think.

First, let us agree on a very important thing, which is that many people want to become rich, but only a few can do that, even if some people have money, you will be surprised that they did not become rich and returned to what they were before normally.

The reason lies in the mentality of the person himself, having a rich or poor person’s mentality. Whatever money and fortunes in his hands would not be enough without a rich future mentality. Here is a summary of what I remember of those thoughts:

• Don't get discouraged at the first fall, learn from your mistakes and move on.

• Invest in yourself through learning, on-the-job training, and gaining practical experience in your job.

• Gather as much relatives as you can, including your colleagues and friends.

• Don't blame others, this is a sore point, many poor minds blame others and don't learn from mistakes! Some of them say that projects in their country are useless and always fail. But he did not bother to search for failure to find them simple!

• You will need to do a lot at first to reap the rewards later. You have to be patient and plan well.

• I advise you to read the book - Rich Dad Poor Dad. For more info on this.

Having prepared yourself mentally, now is the time to know that investing does not require you to have your own business. To illustrate this idea, one of the books (The Cash Flow Quadrant - by the same author of Rich Dad Poor Dad) divides people into four categories:

• People who work in a company, these people work under the umbrella of a work system owned by someone else, or owned by the government, for example, they work according to a system and receive a salary.

• Freelancers, they control system of their work.

• Entrepreneurs create their own business system, and hire others to move it.

• These investors who are content with pumping their money into work systems (projects and companies) and are waiting for gains later or after selling shares or their investment shares.

Note that the two categories (first and second) are both the same. Whenever a worker or a freelancer stops working, his income and source of livelihood will stop and he is cut off!

But note that the third and fourth can earn money while they are sleeping, or on vacation during the summer vacation with their children!

In fact, my words do not encourage you to open your own project and leave your job, the matter is completely relative. Some find their comfort in a secure job, others find their comfort in self-employment, and some find their comfort by filling their time and energy in creating private projects. Some will even abandon their projects once they succeed, to set out to build a new project. They feel more comfortable when they take on the challenge of creating a project.

What I'm saying is: Stick to the point you feel comfortable with and don't think too much that only entrepreneurs are rich.

There is a difference between the entrepreneur, the owner of the project, and the investor. In fact, the three categories, the first (employee), the second (freelancer) and the third (the entrepreneur and the owner of projects) can all become from the fourth category, to become investors. Great and how so?

In those books, all of them participated All of the books encourage the individual to divides his money into three main sections (Some say five).

20% of your salary for investment or projects. Save this much for a year and you will find that you are able to open your own business, for example. But make it an investment this time, okay? Think of another share for projects - unless you have debts of course. If you are religious make it 10% and focus on paying off your debts.

10% for entertainment, do not skimp on yourself even if you are in a storm. You must enjoy yourself in order to be balanced, such as eating dinner out, going to the Cinema or buying a game.

70% for your living day-to-day life matters. No matter how low your salary is, reduce your living in parallel with your salary.

Investment:

Some people doubt that investing in stocks has many risks, such as losing all money you invest. This is true and false at the same time, Investment consists of three types, according to my observation.

Three types of investors are:

• Long-term investor: Between 10 to 25 years, I.E. until the age of retirement, that ratio pumping (20%) on a monthly basis to buy stocks, for example; shares of Microsoft, Apple, Amazon and Google, NVIDIA and others. After years, they make profits and have enough to open a post-retirement project and more money to teach their children in prestigious universities, and provide a car and a house for each child even. If you notice, some companies rose in shares 30 times 2010 to 2020. That is for each $1,000 became $30,000. Even if you notice a decline in these companies in some years, but twenty years is a sufficient period for the company to become large even if it went through a violent economic crisis.

• Medium-term investor: Between 5 to 10 years sometimes you discover the existence of small companies, new projects worth investing, or government bonds. Where after a few years you want to reap up to 6 times what you invested in, it is similar to the first, but the fact that you will risk new and modern things, it may be a high failure rate.

• Forex trading: These people are sitting in front of the computer since the morning, analyzing the financial movements and buying, selling currencies. This is very dangerous and it is preferable not to enter it unless you are an expert in it. So just avoid it for now. It can spare you the job if you understand it.

The question is, how do I invest in stocks?

Simply, all you have to do is go to a stock exchange brokerage company in your country, if you do not know what the brokerage companies are, ask a stock exchange office, after you go to the brokerage company, they will open an investor account for you (they take a commission for buy, sell operations)! All you have to do is buy the shares and keep them for years! It's very simple.

Note that there is no objection to thinking about your own project at the same time, without neglecting the issue of investing in shares because it is your safety valve no matter the circumstances. In fact, you may find that an investment for 10 years after that sells a small part of your wealth to obtain capital that helps you in creating a successful project without need for a loan. You have experience in the field of work, built an excellent team during these years, know how to create a special project that serves people, obtains income and multiplies your wealth more and more.

• Note, Nvidia's shares have increased since the beginning of the year by 50% , meaning that if you invested only $200, now own shares worth $300 , while Microsoft rose to 34%. If you invested $1,000, you will have shares worth $1340, and so on, the nice thing is that their shares are still rising! Especially since Microsoft has not yet released its new system, Windows 11, same applies to Coca-Cola, which is the sponsor of the World Cup 2022, although its rise is slow. But even these companies will undoubtedly suffer in the future from a violent decline, but this does not make you worry because they will definitely return to the rise! The same applies to Apple, Amazon and others.

• Another note, in investing, there is no missed opportunity ( you may miss strong leaps in the rise of stocks, may earned ten times in short time, and this is a painful), but the truth is that all times are available and you can enter immediately, will find that you are winning

• Don't work for money, but let the money work for you. This is exactly what it means.

I have another summary on creating your own project, from the same books, which I will save for another post

Best Regards,

Mahdi Sarhan.