Rich Dad, Poor Dad-Some important lessons to attain financial literacy
Rich Dad, Poor Dad written by Robert Kiyosaki is a value-adding self-help guide that offers insights to attain financial independence and financial literacy at a very early age. This book is fully loaded with important nuggets of information and experiences to meet the financial goals. The author has intentionally shared some teachings and experiences that only rich parents impart to their kids that help them attain financial independence at an early stage in life. This gift of financial literacy later makes them wealthier and more successful.
You can refer to book summaries and audiobook summaries available on various book summary apps.
The lessons listed below form the basis of Rich Dad Poor Dad’s investment guide:
- Face your fears to emerge victorious
Kiyosaki states that the people who fear disapproval are always stuck in their comfort zone. Even if they want to leave it, the fear will pull them further down. And this vicious cycle will never let the person become wealthy.
- Importance of financial literacy
The second lesson is on the importance of financial literacy or financial intelligence. It is often believed by schools and parents that if a person is smart and intelligent, then he must be good with money too. Unfortunately, that is not the case. Financial intelligence is a full-fledged course in itself. It needs to be learned. The result of lack of financial intelligence is not just seen in budding entrepreneurs but is also a problem for many wealthy and successful entrepreneurs. It’s high time that schools come up with some courses on it.
- Make your money work you rather than the other way around
The third lesson imparted by the author is the importance of managing personal finance to the budding entrepreneurs. The earlier you start the journey of self-education and setting financial goals, the better! All this comes down to looking at your income and setting goals based on that income. The author also wants the readers to work for what they learn rather than working for what they earn.
- Learn to take calculated risks
The fourth lesson is to develop risk taking abilities. Eliminating fear and taking calculated risks can actually help a person achieve his/her financial goals. The author mentions investing in shares, mutual funds and bonds instead of depositing all the money in fixed deposits or saving accounts. Higher the risk, higher the chance of becoming wealthy.
If you want to instill risk taking abilities in you, then you can read audiobook summaries available on various book summary apps.
- Eliminate laziness from your life
The fifth lesson mentioned in this book is avoiding laziness and arrogance. The author mentions that laziness is not always stated as lying around and doing nothing. Rather laziness is about not doing what is important and devoting all your precious time and energy to only one thing. Let’s understand it with an example. If a person devotes all his time to business, he is neglecting his family. That person is showing laziness in spending quality time with his family by devoting all his time to his business. This step can make his wife head out for an expensive divorce.
While arrogance is having poor financial knowledge and resisting to admit it too. These two factors can prove to be harmful for even the most financially sound people.
- Gaining financial literacy to understand the difference between assets and liabilities
The sixth lesson stated in Rich Dad, Poor Dad is about knowing the difference between an asset and a liability. This might seem silly to you. But understanding the difference between the two things is crucial to run a successful business. Some entrepreneurs mistake asset liabilities as assets and as a result invest in them. Treating your assets as employees who work for you to produce income is the right way to invest in assets.
- Treat your profession and business as different entities
Robert Kiyosaki states that profession is something you do for 40 hours a week that helps you to pay your bills and bear expenses while business is something that helps you make money on your assets. You can call yourself financially independent when your profession bears the expenses and your business makes you rich.
Kiyosaki offers a Rich Dad, Poor Dad overview by stating that a rich person always makes the money work for him/her rather than the other way around. He has also placed prime focus on the importance of financial independence, financial literacy, and various other types of investments. Another key point is to choose if you want to play safe, comfortable, or rich. The moment you start prioritizing is when your mindset starts transforming. Shifting your focus from accepting that you can’t afford something to thinking about how you can afford it makes all the difference.