Brief learning from Chapters 4 to 8 of Rich Dad and Poor Dad.
snippets from the above said chapters.
Mind your own business. The clear distinction between a profession and a business . When you become an employee you are not minding your own business rather you are minding someone else’s business. You are making someone else rich . Your sweat , blood and hard work will eventually lead your employers to be more rich . The Income statements and Assets need to be given a hard look. Strengthening the asset column will help you generate more cash flows and hence will help you become more wealthy. Buying luxuries through your income will eventually lead to financial burden and that will mandate you to remain an employee till eternity. The luxuries bought from the cash flows of your asset column will not impose any financial restrictions and burden. Rich pay more heed to their asset column and the middle class and poor enjoy luxury by plunging themselves in debt . Mc donalds owner’s primary profession was salesman , however he owned the business of real estate through the franchises purchasing the land or paying the rent.
For the rich the following series will hold true earn , spend and pay taxes on whatever is left with you. However for the middle class and poor people the series would be earn, pay taxes and then spend whatever is left with you
The four skills that anyone should learn in order to become wealthy
1). Rules of Accounting. 2)Science of Investing 3) Understanding the technical aspects of the market which is emotionally driven by the demand and the supply chain . 4) Knowing the legal loopholes of the taxation system.
Understanding these principles will have a profound impact on your wealth.
The rich invent money. Financial IQ will help you come up with all possible creative financial solutions you can identify when you are stuck in a debt. The income generated asset column should always be greater than your expenses column . Despite having the potential to be Rich the biggest challenge is self doubt with which an individual is embraced. We are living in an information age and the one who gets the quick information and acts on it will be the conqueror .Working with numbers and gaining financial literacy will help us be way ahead of the pack of herds. The investment games and the simulations created by Robert Kioski helped the participants receive a personalized and customized feedback . Only those who are able to creatively identify the financial strategies are able to move quickly on the fast track . They are able to come out of the so-called Proverbial Rat Race.
Educate yourself to learn and not to earn more money. Have a knowledge of little of a lot , his Rich dad exposed them to each and every department and also he emphasized to be there in the meetings with his brokers, bankers and negotiators.
Make an attempt to learn new skills. The best example of being the Best Selling author and the Best writing author. He emphasized the journalist to take the schooling which gives her lessons on being the best salesman. The journalist should have taken the lessons on advertising copyright and knowledge of sales.
Pay yourself first that should be the rule of life. The Additional pressure to pay the creditors and the government bill collectors will force you to take up an extra job or identify an alternate source of income. When the stakeholders are paid before ourselves we experience a temporary state of relaxation but that will eventually broke us in the long run. The colonel Harland sanders made use of his recipe of fried chickens and created a multi billion dollar empire at the age of 66 . He was knocked down 1009 times untill he received a YES.
Overcoming fear shall be an inbuilt attitude as Rich people will eventually incur a loss , however
a poor person will not lose a dime in his entire life.
Overcoming obstacles . One needs to overcome these 5 obstacles in order to become rich:
1) Fear: You should not fear to loose money. Consider failure as an opportunity to ananlyze, learn and progress rather than it being the reason to shun your growth . Rich consider failure as an opportunity and poor perceives failure as permanent defeat.
2)Cynicism: “The sky is falling” we might have heard this phrase many times. This brings the pessimistic thought process inside every individual. Try finding the truth amidst rumors and identify existing market trends by researching more about the technicalities of demand and supply.
3)Laziness: Often busy people are too lazy to step back momentarily and think about an alternative way of generating the Cash flow. When you are lazy try to infuse some greed and desire within that will propel you to push your limits and move an extra mile. Always ask the question what’s in it for me?This question will help you give the sudden spark and will enforce you to take appropriate action.
4)Bad Habits: Our life is a reflection of our inculcated daily habits. We need to alter the habits in order to change our attitude.
5)Arrogance: Arrogance is nothing but ego with ignorance. Often people with partial knowledge behave arrogantly as they believe what they don’t know isn’t that important. Most of the money, investment and finances related professionals are ignorant and are just spouting the sales pitch in pretty much the same way as the sales man of a used up car. Always invest in learning and hire expert services in order to be well versed with an altogether deviant field.
Regards,
Kinjal Morakhia