“Money is one form of power, what is more powerful is financial education” — Robert Kiyosaki.
Written in 1997, this is an all-time book recommendation for personal finance. The book gives primary lessons on money management, investing, accounting and budgeting.
Here are seven key lessons from the book;
1. The rich have money work for them
The poor and middle class are in a constantrat race; getting up, go to work, pay bills, buy luxuries, go back to work again. They are controlled by fear, lack of knowledge and greed.
Meanwhile, the rich often have businesses which doesn’t require their presence. They are constantlife learners, they don’t let emotions control them and their lives are not determined by their paychecks.
2. It’s not how much money you make, it’s how much you keep
Money accentuates the cash flow you have in your head. It’s crucial then to understand howaccountingworks. But what’s more important is to know the difference betweenan assetanda liability, and buy assets.
An asset is anything that puts money in your pocket. Assets can be: a business which doesn’t require your presence, real estate, stocks, bonds, notes and royalties from intellectual property.
A liability takes money out of your pocket. Liabilities can be: mortgage, car loans, credit/debit cards, school loans etc.
3. Focus on your asset column not your income statement
You need to have your own business which revolves around the asset column not your income column. More money only brings more problems, learn cash management instead.
Rich people buy luxuries last, only the poor buy luxuries to look rich.
Acquire assets that you love, if you don’t love it, you won’t take care of it.
4. The rich are not taxed
The rich createdcorporationsas a vehicle to limit their risk of being taxed.
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A corporation is merely a file folder with some legal documents in it, sitting in some attorney’s office and registered with a state government agency
Having a corporation means utilizing financial IQ in the categories of; accounting, investing, understanding markets and understanding laws.
5. It’s not the smart who get ahead but the broad
What holds us back is some degree of self-doubt. The single powerful asset we all have is our mind, if trained well, it can create enormous wealth seemingly instantaneously.
Have guts and take risks. Risks will always be there, instead of avoiding them learn to manage them.
The three skills of investors are to find an opportunity that everyone has missed, to raise money and to organize smart people. And when you need advice choose your advisors wisely.
6.Work to learn, don’t work for money
Seek a job for what you will learn, more than what you will earn. There are skills which you should learn, depending on your type of profession. For example, a young writer can go for skills like advertising, copywriting, sales and public relations.
Some people are one skill away from great wealth.
Remember to work on your management skills; management of cash flow, systems and people. Also, work on your communication skills and, sales and marketing.
7. Choose heroes
Heroes do more than inspiring us. Heroes make things look easy.
As a nine-year-old kid, when I stepped up to bat or played first base or catcher, I wasn’t me. I pretended I was a famous baseball player. It’s one of the most powerful ways we learn, and we often lose that as adults. We lose our heroes
Copying heroes is a powerful way of learning. If they can do it, so can you.
I follow what Warren Buffett invests in, and I read anything I can about his point of view on the market and how he chooses stocks.
