Rich dad poor dad teaches that to become reach you don’t need to earn lot of money. Earning high income is not just everything. The thing matters is how much you keep with you from your earnings.
Rich people invest their money in assets. The poor and middle class invest their money in liabilities that they think are assets. Financial planning is key to a better future. Instead of spending all the money in your luxury, you should invest your money which can be used in future whenever your are in need.
Introduction and Chapter 1.
Introduction of the book is all about lack of financial education in the school. According to author Robert Kiyosaki it is very important to educate students about money ad finance as subject. At the end of the chapter one 6 lessons are given for the readers which may not help them directly but it is definitely useful to educate our next generation for such important aspect of life.
Chapter 2 – Lesson One: The Rich Don’t Work For Money
In this chapter author is sharing his experience of learning this lesson. The idea is that one should not just work for money but you need to plan smart enough that money works for you. However, in my opinion initially earing money is something mandatory to create a base of your empire.
Book name: Rich dad Poor dad
Author: Robert T Kiyosaki
In the introduction part of the book, you will get a glimpse of what the book is all about. The story of a boy who wants to be rich and how he gets to know some good financial life lessons from a rich dad.
Chapter 1 Rich don’t work for money.
What I learned from this chapter is that never work for money. This sounds strange but this is cheaper all about. In the first chapter Robert( author) decides with his friend Mike that they want to be rich and learn lessons from Rich dad (Mike’s father) at the age of nine.
Following are the important lessons from the 1st chapter.
- “Experiential learning”
- “School never teach financial literacy”
- “Learning by making mistakes through trial and error is more and more important.”
- “Don’t try to change others – change your mindset. I must change.
- “The high-paying job means two things: you are working for money and taxes you will probably pay will increase.”
- Fear and greed emotions always control people’s mindset that stops them from doing something new or creative. They become slaves.
- “Emotions are what makes us human. The word emotion stands for energy in motion. Be thoughtful about your emotion and use your mind and emotion in your favour, not against yourself.”
The reader gets some good examples from this chapter that “how money works for you.”
Chapter 2 Why teach Financial literacy
In the 2nd chapter, the book talks about a phase where the author had already retired at the age of 47 and his friend Mike was in a better situation than his rich dad. This chapter mostly talks about liability and assets. Mike’s dad drew so many charts to explain the nine years what assets and liability is. Those all charts we can see in this book with a list of assets and liabilities examples. The author believes that purchasing a home is a liability and not assets because as per his mindset, liability is a thing that takes money out of your pocket. That means you should buy a house when you have substantial income from assets. Also, he defines wealthy people – “When your assets generate enough income to cover your expenses, you are wealthy, not rich.” The author gives examples of how wealthy people come in the category of poor people.
I learned from this chapter is that financial planning is key to a good life, that liabilities need to be less.
Learning through life experiences itself is the best way to learn, it is not always visible to our self. but while discussing our life experiences and incidents we got to know that god is given so many precious gifts to us we just need to understand and identify it and then we can face all the problems.
Stairs are the same you just have to decide that you want to climb or you want to fall down. Don’t do it for others just do it right then you don’t need to care for anyone because you are doing good and right for all.
Rich Dad, Poor Dad goes over the ways that you can make money work for you, and learn to stress less over financial security
Chapter 1, is about how cash flow works and how you can make it work for yourself. This is the main focus of this chapter. Robert considers himself having two Dads, one his real father who was educated and highly intelligent but always struggled financially while the other one who was his friend Mike’s father, who never finished eighth grade but left tens of millions of dollars for his family. Having two Dads offered him the choice of contrasting points of view: one of rich and one of a poor man.
Chapter 2 :
Robert shares his story that how he and his friend was not invited to a beach house party considering them as poor kids. This led him to ask real dad a question that “How to make money?” and he replied “Use your head” as he himself was not clear about what to answer. Robert and his friend started a business which was termed illegal by his father and he suggested him to talk to Mike’s father as he knew a lot about money.
He then worked at mike’s father’s place earning 10 cents per hour which he felt is less but his desire was to learn from him how to make money. Seeing his efforts he decided to teach him in his own ways. A few learning that he has are:
- The poor and the middle-class work for money. The rich have money to work for them.
- For poor people, the rich dad said “They have a pattern, the pattern of get up, go to work, pay bills; get up, got to work, pay bills. This is what I called the Rat Race.
- The main cause of poverty or financial struggle is fear and ignorance, not the economy or the government, or the rich.
- Most people don’t see opportunities as they are always looking for money and a secure job to pay bills.
- You should not allow your emotions i.e fear and greed to overcome you while thinking for money.
Using these learning’s, he started a comic book library which did not last for much time but Rich dad was happy to see that used his mind and was able to see opportunities.
Rich Dad and Poor Dad:
Financial literacy is not taught in schools . The old philosophy with which we are still adhering to is get a degree and land yourself in a safe and a secure job. As years passed by toil hard to gain scholastic skills earn more money only to pay more taxes, purchase a palace only to pay more real estate taxes. Financial literacy is all about identifying the power vested in investments which will help money work for you rather than you working for money. Rich and Poor is in the context of the financial wisdom possessed by two dads. The context hovers around your ability to manage your finances. Rich becomes more richer and poor becomes more poorer as they struggle to take judicious decisions when it come to wealth management. An analogy works well here if you sit on the couch you are compromising the physical health , on the contrary if you forbade the understanding of financial literacy and don’t exercise your brain to deal with finances at an early age you are compromising your wealth. The author since childhood has always faced contradictions in terms of recommendations and suggestions provided by his two dads. He also analysed how the thoughts of the person influences the risk taking ability of an individual. I cant afford it , this statements hooks you off and you will be convinced there is no way out. On the contrary asking yourself a question why cant I afford it?? challenges your brain and will give you the kick start to make it a reality . Also instead of complaining I don’t have money because I have you kids needs to be substituted with I have money because I have you kids. Rather than gaining skills to prepare a resume to get a job learn to draft impressive business and financial plans to offer jobs. The book is a summary of 6 principles or guidelines which was dictated by the author’s Rich Dad. The very first principle being the Rich do not work for money. The curiosity of Mike and Robert to be rich and make more money sort of died when the very first day of the business turned out the be the last one. Robert’s dad advised to meet Mike’s dad to get few lessons on how to be rich?? Both the boys chose the offer to work for 10 pence an hour during Saturdays. For three consecutive weeks they hold the patience and lastly they thought they are being exploited as per the labor laws the minimum wage which they deserve is 25 cents. Robert was frustrated as three weeks lapsed and he did not receive any lessons from Mikes Father which can help him grow rich. He thought he was exploiting him and went on to confront his father by stating he is an insensitive crooked man. His father tested them by agreeing to pay $2 per hour .Their hearts pounded with a rapid pace and they could imagine how they could be the richest kids in Hawaiie by earning this much. When the Rich dad offered $5 the greed penetrated in their souls calm down . Rich dad explained the difference between poor people and Rich people. Poor People think money can eliminate all their fears and hence they quit the job and find better paying job , however this does not end their fear. The greed and desire provokes them to work more hard and get the raise in the salary to enjoy all the comforts of life. The vicious cycle of fear and greed seems never ending. In fact at times the more rich you get you are grappled with more fear , now the fear is of loosing all the money you have earned. The rich dad explained how his employees behave out of fear and greed. Fear makes them run to get the job and greed makes them beg to increase the pay. He gave an example of a Donkey and his owner. The owner flash dangling carrot in front of donkey’s nose. Donkey does what his master commands with an illusion of having this carrot. If donkey might have sensed a real picture he might not have chosen to chase the carrot. The self inflicted emotions of fear and greed make us chase for money . We become slaves of money , however the real power resides in being the Master of Money and not letting your money control your desires and fears and consecutively your thinking.The rich dad want to help them see what others cant . Money is an illusion and not a reality. Getting tremors in the middle of the night just in the worry of earning money and paying the bills is the horrible way of living life. Before rushing to work and working hard one needs to ask question will this short term efforts alleviate the long term pain?? One day Robert was gazing a book store and was lamenting about not even having 30 cents for comic books. He saw Mrs Martin discarding the comic books in large cardboard box. They asked the comic book store owners can they use this comic books to which he replied yes they can but they cant resell them . One room of Mike’s house was turned into a Comic Book Library and Mikes sister was assigned the position of a librarian. Children need to pay 10 cents for 2 hours and can read as many books as they want. In over three months they earn $9.50. They realized how opening their own business Comic Book Library helped them take charge of their finances even in their absence. This was a perfect example of how they made money work for them. The second principle lay emphasis on financial literacy : Lack of financial literacy will incapacitate a person to handle his own finances. After earning money the biggest question is how to manage money so that it is not taken away from you. The biggest question to ask before incurring any expense is will this be an asset or a liability ?sounds pretty simple , however it is the profound way of improving one ‘s cash flow. Raise in an income will provoke people to purchase new big home which will drive them to pay more property tax resulting in blowing of money from the expense column. The cash flow of middle class people does not have any scope of investing in asset as their income is equal to their expenses. They consider their house as the biggest investment , however they don’t have any asset which could pour more money for them . On the contray the rich man’s financial statement has Assets greater than liability and their income is greater than their expenses . The balance is again reinvested and this is how rich gets riches and poor gets poorer. Thinking wisely how to spend money is considered as Financial Aptitude.Rich buy assets , Poor have more expenses and middle class buy liabilities which they think are assets. How much rich you are is in the eyes of the beholder. According to Buckminster Fuller calculate how many days you can survive without your pay check and that will speak volumes regarding the financial independence and financial survivability of an individual. A financially illiterate person will earn an income for the employer , will have to shed the major chunk of their income to the government in the form of taxes and will pay banks in terms of liabilities. The share of your greater efforts are distributed amongst the above mentioned key stakeholders leaving you struggling with expenses and liabilities and this is what they refer to as being in the rat race.
Today’s life class started with a movie named “Khuda Hafiz”. The session continued with sharing the RAP sheet of the participants. Hearing to others problems, fears, pains, etc helped me to answer my question and indentify my problems too.
It’s really necessary to have a closure to the problems not to judge who is right or wrong, but it necessary to pass on the baggage to the other person and let the other person know your feelings, behaviour and it’s impact.
We all expect the life to be perfect everytime, but sometimes it’s okay to taste the bitter moments of the life and experience the pain, feel the sorrow and learn from the process.
Overall the session was really insightful.
Title of the book: Rich Dad Poor Dad
Author: Robert T. Kiyosaki
Genre of the book : Self-help
Why was this title selected: It talks about the story of Robert who grew up with two dads — his real father and the father of his best friend, his rich dad — and the ways in which both men shaped his thoughts about money and investing and hence the title. Chapter 1 and 2 reflection: Chapter 1 begins with an interesting statement “The poor and the middle-class work for money. The rich have money work for them.” The chapter focuses on his story as a nine-year-old and how he starts learning about money from his friend’s father. The inspiration to learn more about managing money links to an incident when the author and his friend Mike feels bad when their friends don’t take them to a party calling them poor and how this father whom he calls poor dad advises him to go and meet Mike’s father to learn about money and it’s handling. Mike’s father believes in hands-on teaching and not lecture method and gives challenges to both the boys and how in the process they learn to use their thinking is the most interesting part.
Few statements were spoken by Mike’s father whom the author now calls Rich Dad are worth pondering upon.
1. Opportunities come and go. Being able to know when to make quick decisions is an important skill.
2. Deep down you were terrified of taking risks.
3. The main cause of poverty or financial struggle is fear and ignorance, not the economy or the government or the rich.
4. Human life is a struggle between ignorance and illumination.
5. Confronting fear, weakness and neediness by choosing our own thoughts is the way out.
Chapter 2 focuses on why is it important to teach financial literacy. This chapter explains the difference between assets and liabilities using simple sketches. This chapter drives home the point that it’s not about how much money you make, but about how much money you keep. An asset puts money in the pocket and a liability takes money out of the pocket.
Can’t wait to read more.
हमारी शिक्षा प्रणाली हमें धन कमाने के लिए पढ़ने और डिग्री हासिल करके अच्छी नौकरी पाने के लिए प्रोत्साहित करती है। वास्तव में धन को अपने लिए प्रयोग में लाना हमें नहीं सिखाया जाता, यही कारण है कि इंसान बिना सोचे समझे धन पाने की अंधाधुंध दौड़ में फंस कर रह जाता है। ‘Rich Dad Poor Dad’ में लेखक ने अपने दो पिताओं के नजरिए को सुना, समझा और उन दो अलग अलग नजरियों से अपने लिए सही को चुना। उन्होंने बताया कि हारने का डर जीतने की ख़ुशी पर भारी पड़ता है। यही डर और हमारी आकांक्षाएँ हमें धन के सही उपयोग करने से रोकती हैं। उनके अनुसार हमें अपने डर और आकांक्षाओं को अपनी सोच पर हावी नहीं होने देना चाहिए। जिस तरह स्वास्थ्य पाने के लिए शारीरिक व्यायाम की जरुरत है उसी तरह धनवान बनने के लिए मानसिक व्यायाम जरुरी है।
उन्होंने यह सोचने पर मजबूर कर दिया कि नौकरी करना सही है या नहीं ? बहुत सोचने पर मुझे यही लगता है कि जिस काम से आप शांतिपूर्वक जीवन जी सकें वही सही है। पैसा बहुत कुछ है पर सब कुछ नहीं। लेखक का कहना बिलकुल सही है, ‘ Don’t work for money, let money work for you.’
यहाँ उन्होंने सम्पति और दायित्व (जिम्मेदारी ) के अंतर को भी स्पष्ट किया है। इंसान को बहुत सोच विचार कर अपने धन को सही जगह निवेश करना चाहिए।
Today’s movie and short films that we watch, brings me to point where I feel ‘Intuition’ plays a major role in our life while we take small or big decisions. There is no standard way that can be followed by every person to get peace of mind.