From nothing but a good idea, he built an asset. One reason many people hold back is time and money. How the heck are you going to find the time to start a business? Michael Dell started Dell Computers by working part-time in his university dorm room, and eventually got so rich that he decided to drop out. Once you have a business, you have options. You can reinvest the cash it generates into other assets; you can grow the business and sell it; or you can take it public.
He merely bought it from a group of programmers. He built a great business, not a great product — and that was the key to his success. Henry Ford embodied this. Finding a guiding spiritual mission, one that aligns with your financial goals, will help keep you on the right track.
But you are unlikely to be all three, and all are important if you want a successful business. A common factor among rich business leaders is the knowledge that money spent on their team is an investment — one that will almost certainly make them richer. Leadership is a skill unto itself. How can you acquire leadership skills? One great way is to volunteer.
In many groups, no one wants the responsibility of leading. Raising capital, advertising, negotiating, motivating your team and making sales — what do all these aspects of business life have in common? All are crucial for success, and all require top-notch communication skills.
So how can you become a better communicator? Good places to look are network-marketing organizations, as they often have great programs. Joining and sticking with one for at least five years can work wonders. Shy people, scared of failure, come out the other end with the two key skills of a salesperson: the ability to communicate the value of a product with ease, and fearlessness in the face of rejection.
Master these two qualities and you will likely be a powerful communicator. Studies of public speakers show that 55 percent of their impact comes from body language, 35 percent from how they speak and just 10 percent from their words. If you think about the business leaders you know, they probably all look the part, right?
And this can go a long way indeed. A banking friend of the author once told him that his bank had just brought in a new president because of his appearance. The new appointee simply looked and spoke like the president of a bank should. Learning to communicate and look the part will pay off in lots of ways. The result? Maximized returns. They operate as a sole proprietorship, which means that they have one income source. They pay normal, personal income tax and they are liable if anything goes wrong — like a sick customer filing a lawsuit.
All their eggs are in one basket. No disrespect to Bill and Jane, but the sophisticated investor knows better. This way, risk is spread. If a customer falls sick and sues the restaurant, the real estate is legally separate and protected. Meanwhile, under this corporate structure, expenses like health insurance and legal fees are allocated as business expenses and paid pre-tax.
Tax itself is paid at lower, corporate rates — less risk, less tax, more financial return. Whatever you want to invest in, as a sophisticated investor, you know how to make your money work for you. The sophisticated investor is more likely to invest in real estate, some stocks and shares and a business venture. The average approach sees you work for your money. The second approach sees your money work for you.
If you want to be rich, you must think and act like a rich investor does. That means focusing on building a business and investing in assets, not focusing on employment and savings. In doing so, you can build and control an investment portfolio that generates income and grows your wealth. Take some time to truly reflect on what your priority is: to be secure, to be comfortable or to be rich.
One is not better than the other, but they represent very different choices and outcomes. Talk to your partner or family, and sketch out pros and cons. Being certain in your decision to prioritize becoming rich will give you the mind-set you need. So spend time developing your financial education — it may be the best investment you ever make. In contrast, an inside investor creates assets instead of buying them.
Building a business is a matter of mastering three things. First, a business needs a spiritual mission to guide it. Second, every leader needs a team. Third, every team needs a leader. The Book also mentions that we should start now to avoid falling into a debt trap and develop responsible financial habits. We should take a careful look at what we can and cannot afford so that we are able to set realistic financial goals for ourselves.
The author recommends that we keep our job and build our asset column, meaning we keep investing and building assets and think of our dollars as employees who work for us. Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets. The author emphasizes the fact that knowledge is power and we should work to learn, not to earn. Money should work for you, not the other way around and do jobs that we do not know much about to learn different skills.
He emphasizes that we should use our money to acquire assets instead of liabilities. Assets are stocks, bonds, real estate that you rent out, royalties and anything that generates money and increases in value over time. Liabilities can be cars or electronics with maintenance costs and monthly payments, a house with a mortgage, debt, anything that takes money out of your pocket each month.
The author wants us to be patient and keep our job and to build our business over time and use it to invest in assets until your assets eventually become the main source of your income. The most important thing is that you start today. You are your own biggest asset, so the first thing you should do is put some money into yourself to develop your own financial knowledge.
Liabilities can be cars or electronics with maintenance costs and monthly payments, a house with a mortgage, debt, anything that takes money out of your pocket each month The author wants us to be patient and keep our job and to build our business over time and use it to invest in assets until your assets eventually become the main source of your income The most important thing is that you start today.
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Rich Dad Poor Dad Summary by Robert Kiyosaki teaches you why it is crucial to get financial education and how you can become wealthy by building high-quality assets that would make money work for you. Are you struggling to pay your bills? An Asset is something that makes your pocket heavier. Common assets may include a product you purchased, a business you own, or any passive income source that puts money in your wallet. Liability is something that makes your pocket lighter.
It reduces your bank balance and hardly gives you any return. You need to pay bills, right? Recommended summary: Millionaire teacher. I thought only adults could deal with money back when I was a kid, so I never bothered to learn about it.
Read blogs and listen to the podcasts discussing mutual funds, the stock market, investing, budgeting, income statements, cash flow, taxes, and the list goes on…. When you start learning about money, you develop the attitude rich people have and see various ways to build high-quality assets by leveraging your opportunities and resources.
Suggested summary: I will teach you to be rich by Ramit Sethi. Everybody knows that risk is a part of the money-making business, but many miss out on golden opportunities being wrapped up with fear. Suggested summary: The behavioral investor. He performs a loop of specific actions every day like waking up, going office, working hard till 5 pm, coming back home, eating, and then sleeping.
This is what I call an infinite loop of misery , also known as the rat race. Most people are stuck in it. Look at the options and figure out what is right for you. And by not having proper knowledge about assets and liabilities, they unintentionally grow their liabilities. Unless you have valuable assets and the knowledge to build money from them, joining the class of riches is out of the question.
Check out: Best finance books of all time. People get so obsessed with acquiring wealth that they participate in get-rich-quick schemes. When you nurture the idea of accumulating wealth quickly using money-making hacks, you forget that the royal road to riches is long. But he, who will persevere, will enjoy the fruits of victory. Suggested summary: Die with zero. There is a myth among all the people that if you want to live a good life, then go to a decent college, get an excellent degree, find a job, and then get paid for it.
So start growing your assets even if you have a stable job. On the other hand, rich people embrace their desires or greed. In doing so, they look for possibilities and answers. Also read: How successful people think? Choose the right habits and money will come to you, choose the wrong habits and money will go away. When you do this every day, you accumulate more wealth and check your cash flow, which makes you money-aware.
Practicing the proper habits might make you wealthier over time. Extra lessons you can learn on the Blinkist book summary app :. Robert Kiyosaki gives an interesting angle to the concept of the rich vs. Rich Dad Poor Dad is the story of Kiyosaki who had two dads, one was rich, while the other was poor. In this book, Kiyosaki shares the lessons from his Rich Dad and decodes what makes rich people rich. Build Assets, not Liabilities. Become more financially literate.
Make your money work for yourself. Keep learning about money. Learn from rich people. But it seems that Rich Dad was an imaginary character that Kiyosaki made to build a compelling narrative in the book and help the readers understand the concepts. What separates rich from poor is their mindset, the ability to take risks, and the desire not to stay poor. People want to be rich because they believe that money can help them achieve freedom and happiness.
There is more to it. First, make as many assets as you can to stay sane. Second, keep learning from people who have the results you want. In particular, rich use corporations to pay fewer taxes, as they are very effective at reducing the tax burden. Knowledge is power. There is a link to the previous chapter of minding your business. Kiyosaki says that working for Xerox Corp. Stresses the importance of financial IQ again pages Kiyosaki starts by emphasizing that fear often suppresses genius in people.
As a teacher for financial education, he often fosters his students to take risks. At this point, you may have the question of why to improve your financial IQ. Kiyosaki argues that only you can answer that question. They often blame the economy or their boss, and only seldom they consider that the problem is actually them. First, some people playing it can see the game reflecting them. This is good because they can quickly learn what is causing them to struggle.
And all this comes down to the meaning of having financial IQ, which really means having more options. After this, Kiyosaki shows a series of deals he did himself, buying-and-selling Real Estate and increasing his asset columns, showing a practical example of what financial intelligence brought him.
Then, on page , he summarizes financial intelligence as being a set of 4 skills: accounting, investing, understanding markets and law. In page , two kinds of investors are defined, those that buy packaged investments, and those that put investments together, and Robert Kiyosaki says that the latter are the more professional investor and his rich dad encouraged him to be.
To be this kind of investor, you need to find opportunities that other investors missed, know how to raise capital and organize smart people. There is always risk, learn to manage it instead of avoiding it. This chapter is primarily about the benefit of learning new skills, showing how trapped one become when we are too specialized. The chapter starts off with an example that Robert Kiyosaki when himself through. He generalizes this problem, stating that many talented people struggle financially because they only master one skill.
Kiyosaki provides a few examples of his own journey. Then, he goes on to explain that he kept changing jobs to learn more skills, and skills that became important for him to succeed. He joined Xerox Corp because he was a shy person, and Xerox has one of the best sales-training programs in America.
While his rich dad was proud of him, his poor dad was more disappointed at every job change. To other people, Robert Kiyosaki recommends to join a marketing company as a second job, or join a union if they are too specialized and refuse to widen their skills. One of the examples that is provided is that, although most his students claim to cook a better hamburger than fast food chains, the fast food chains make way more money than his students.
He uses examples of other people who are not doing so well financially, mostly due to their lack of knowledge of business. He also says that people who run major companies are usually transferred between departments within the company till they get to the top, to acquire knowledge in all areas of business.
In page , Kiyosaki summarizes the main management skills needed to succeed: cash flow, systems, and people, while the most important specialized skills are sales and marketing. One of the analogies made with specialized people being vulnerable is an athlete who becomes injured or too old to play. Finally, Kiyosaki remembers the importance of giving, in order to get. Once people become financially educated, they still face some obstacles to become rich.
In particular, Robert Kiyosaki enumerates 5 obstacles: 1 fear, 2 cynicism, 3 laziness, 4 bad habits and 5 arrogance. Robert Kiyosaki explores all these obstacles, one by one. Regarding fear, Kiyosaki says that everyone fears to lose money. Rich dad also said that the greatest reason for lack of financial success was playing too safe.
In essence, they play not to lose, not to win. Balanced portfolios are fine if you have to lose, but make sure you start early. The second obstacle is cynicism. Kiyosaki uses the story of the Chicken Little to illustrate that we all have doubts, or noise, as Kiyosaki calls it.
It can come from within or for the outside. A savvy investor has to know how to make money even in bad times. Kiyosaki tells the story of a friend who backed out on a deal Kiyosaki and his wife had arranged.
They criticize, and winners analyze. At the end of this section, a motivational story is provided: Colonel Sanders lost his business at age 66 and started to live off a Social Security check. He went around the country and over more than a thousand rejections, he finally became a multi-millionaire, after selling his fried chicken recipe. Although we are raised thinking of greed as bad, as Kiyosaki reports, that greed is what really makes us tend laziness off.
Our lives are a reflection of our habits more than our education. An example of a good habit preached by the rich dad was to pay himself first, and bills last. This motivated him to deliver: if he could not pay his creditors, he was forced to find additional sources of income. Arrogance is the last obstacle.
Rich dad lost money whenever he was arrogant. People are arrogant to hide ignorance. This chapter lists 10 things to start improving your financial life. First, find a reason to succeed. Kiyosaki mentions the example of a young woman who had dreams of swimming for the US Olympic team.