How to Become Rich According to Rich Dad Poor Dad
Here are 5 lessons we can learn from this best-selling book.
Robert Kiyosaki is known for his book, Rich Dad Poor Dad, where he shows people the mindset it takes to become financially independent.
1. Focus on financial education
According to Kiyosaki, there is no investment better than in yourself.
If somebody knows topics like finance, investing, markets, writing, and public communication under their belt, they are bound to become rich.
Capital will not solve your problems, anybody who thinks this will usually have problems in their whole lives.
Kiyosaki says that “intelligence solves problems and produces money, and money without financial intelligence is quickly lost.”
2. Know the difference between assets and liabilities
This book makes sure you know that an asset is something that puts money in your pocket and a liability is something that takes money out of your pocket.
You must learn that rich people buy assets and poor people buy liabilities.
This is why you should learn about the markets and investing so that you can learn how to spot fairly priced assets to buy.
When your assets pay for your liabilities completely, you are financially free.
3. The rich make their money work for them
Most people work to survive at a job, and if they have money problems they ask for a raise.
Rich people make money and don’t even work to earn it.
They do this by buying assets and putting the money they earn to work for them.
4. Reduce liabilities
To become financially free quicker, you must reduce your liabilities so that your assets can cover them.
Avoid living a luxurious lifestyle until you have some nice cash flow coming in through your assets.
Buying fancy cars and expensive clothing are examples of things that people will do that make them directly lose money.
5. Work to learn
People should find a job that allows them to learn valuable skills like the ones mentioned previously.
They should also know that micro-investing with just $1 can snowball over time when you consistently add to it, as explained in my article, From $1 to $1,000,000 Micro-Investing.
The only thing better than learning a valuable skill is getting paid to learn it!
The book Rich Dad, Poor Dad is really valuable not just for dads but for anyone. As someone who have read the book, I'm quite empowered with the values imparted by Kiyosaki. Thanks for sharing it here and I hope more people would be able to learn such things and its significance in creating wealth (and for financial literacy as a whole).