Read this book and start focusing on Assets!
This book will change your financial situation for the better
Rich Dad Poor Dad is an investment book that has been referred to as the number one book for financial success of all time. Having sold over 26 million copies, it has helped many to change their mindset and realise how they can become rich. The book uses personal experience to show how it is the mindset of the individual that matters, not their inherent intellectual ability.
The book examines the difference between Robert Kiyosaki's biological father who was a brilliant intellectual and his best friend's dad, who became his financial mentor and never finished eighth grade at school. His biological father died with debts despite a successful career and two PhDs, while his mentor became the richest person in the state and left millions to both family and charity when he died.
Herein we explore some of the key ideas covered in Rich Dad Poor Dad.
The rich do not work for money
The initial juxtaposition places the rich against the poor. He posits that the poor and middle classes work for money, while the rich make money work for them. He argues that most are stuck in an endless cycle of greed that makes them want to work hard to earn so that they can spend and then work harder for more, so that they can spend more. He argues that investing your time to create assets is far better than working to be paid hourly for your labour.
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The importance of financial literacy
Robert Kiyosaki argues that financial literacy is the key missing element in education that keeps the middle classes from getting rich. He argues that most people do not know the difference between a liability and an asset. Simply, an asset brings money in and a liability takes money out. While most think of a house as an asset, it is, in reality, a liability. The house is an expense so you should first create an asset that will pay for your house as the liability that it is. Kiyosaki argues that this lack of financial literacy is the root cause of financial troubles for the middle classes and this change in thinking is what makes this one of the best books for managing money.
Mind your own business
In Rich Dad Poor Dad, Kiyosaki draws a distinction between those who work for others for a paycheque and those who work for themselves to amass wealth. If you calculate all of the taxes that people pay, the average American actually works five to six months of every year just to pay the government. Kiyosaki argues that you should focus more on your own assets, investing everything you can to increase your income from your wealth, rather than from your labour. While you can keep your day job, the aim should always be to create wealth that is being generated without your labour being needed.
Rich Dad Poor Dad is one of the best books for money management available and is very much worth a read. It could change your financial position for the better and make your life far more profitable from here on out.
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