Robert Kiyosaki’s best-selling book Rich Dad Poor Dad taught me that in order to succeed in life, I need to look at money differently than my peers. And by doing so, it helped me to come up with multiple streams of income and allowed me to live my dream lifestyle. In this post, I’ll explain the three biggest lessons I learned from this book and how you can use these lessons to achieve your own goals and dreams as well.
Think Like a Business Owner
Understanding financial literacy is crucial to business owners and entrepreneurs, but that doesn’t mean you need a formal education in order to understand it. Read books like Rich Dad, Poor Dad by Robert T. Kiyosaki if you haven’t already—but don’t just read them for entertainment value.
Take notes on what he says, and think about how those concepts apply to your own business. Having some grasp of financial concepts like debt vs. equity and compounding interest can help you make better decisions in your company and save you a lot of money (and headaches) down the road.
Assets are Always Working for You
When you first read Rich Dad, Poor Dad, it can be a bit off-putting to hear about how wealthy people want to pay as little tax as possible. After all, if you were taught that taxes are a necessary evil, shouldn’t you fight to pay more?
The key is to recognize how paying less in taxes helps you build wealth quickly. This doesn’t mean breaking laws or taking unnecessary risks; it means being smart about how you earn money and spend money. And after reading Rich Dad, Poor Dad, there’s no better time than now to start doing just that.
Investment Income is Available to Everyone
One of my favorite things about Rich Dad, Poor Dad is that it’s a book for everyone – no matter their income level. In fact, one of Kiyosaki’s main themes is that investment income is available to everyone and not just those born into wealth or with a trust fund (like his own rich dad).
As he wrote in Chapter One: The rich don’t work for money… …they invest in assets that produce money. He goes on to illustrate how almost anyone can become wealthy by investing in assets like stocks, bonds, real estate and franchises.
The Efficient Use of Money Leads to Wealth
One of my favorite quotes, The poor and middle class work for money. The rich have money work for them, comes from Robert T. Kiyosaki in his book Rich Dad Poor Dad.
In fact, most of what he talks about in his book is efficient use of money leads to wealth. He says that once you understand that and can make it a habit, you are on your way to financial freedom! A big part of using your money efficiently is investing wisely.
Financial Education is Power
I was always an A student in school, but that didn’t translate into good money sense. It wasn’t until I read books by Robert Kiyosaki, like Rich Dad Poor Dad and Cashflow Quadrant that I began to understand how financial decisions impact my life today.
As a result of understanding some of these concepts better, there are certain things that influence my financial decision making more than others. The three main things that influence me now are
(1) Financial Education:
Simply having a degree isn’t enough anymore. You need to learn about your finances so you can make smart choices. If you don’t have financial education, then you will be at a disadvantage when it comes time for investing or buying a home.
This is probably one of my favorite topics because it has helped me build wealth and start multiple businesses over time. Entrepreneurship allows you to create passive income streams which means more freedom for yourself.
If you are an entrepreneur, then you can be your own boss and make your own hours. You can also choose what projects to work on based on what interests you most, as opposed to working a job where someone else tells you what projects to work on or how much money they want you to make them.
Having self-confidence is a game changer. It can influence your everyday decisions and help you achieve your goals. If you don’t have self-confidence, it is harder to achieve success in other areas of your life, especially financially.
Recognize Tax Liabilities Early On
In his book, Robert Kiyosaki talks about how he made a lot of money on paper in real estate deals early on and had to pay taxes on that income. As he wrote in his book, I had gained considerable wealth. …
[B]ut when it came time to pay taxes, I discovered that many of my ‘profits’ were due to appreciation and not actual profits at all. The lesson is clear: Taxpayers who wait until they make a lot of money from an investment will eventually get hit with higher taxes because their earnings are considered a long-term capital gain.
Multiple Streams of Income Creates Passive Income
Kiyosaki challenges conventional thinking on many issues and what better way to start than to look at money. One of my favorite quotes is ‘The rich get richer; poor get poorer.’
The only reason that happens is because most people work for a paycheck. They earn their income as if they’re employees and they spend it as if they’re employers.
This means that your time outside of a nine-to-five job—when you are not earning money—is often seen as wasted time when, in fact, it should be used to set up sources of passive income. You don’t want to work for money; you want your money to work for you! So don’t just save what you make; invest it!
Take Responsibility For Your Financial Future
It may sound harsh, but you need to take charge of your own financial future. This means that you should never rely on someone else to do it for you (e.g., your parents). Start by taking responsibility for your own choices, rather than blaming others or being a victim of circumstances.
You’ll make better decisions if you follow a financial plan and save responsibly over time. For example, if you need $10,000 in financing to start a business but don’t have that money available right now—do not go into debt! And remember: If it sounds too good to be true, then it probably is!