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Your First Step towards getting Rich

In this article, I will tell you the most important lessons from Rich Dad Poor Dad by Robert Kiyosaki. It will enlighten you the way you think.

Do you want to know to get rich? Rich dad, poor dad is the story of Robert Kiyosaki. He has 2 dads. One has PhD while the other has finished only 8th grade. All though both dads turned a significant amount of money.

Rich Dad Poor Dad
Rich Dad Poor Dad

Poor dad always struggled while the rich dad was on his way to becoming one of the richest men in Hawaii. If you are not born with rich parents you can learn from Kiyosaki. To become wealthy you use his principles from his books.

1. The rich don’t work for money

Let’s consider two people. The first one is John. He spends every hour of every day working for money. He is really mad at life and doesn’t know why he can’t get ahead.

On the other side, we have Ben. He makes the same amount of money as John. Ben spends most of his time looking for assets to add to his collection. Both of these guys make the same amount of money but while John works for money but Ben gets his money from assets.

Rich Don't work for Money
Rich Don’t work for Money

The lesson here is that the rich don’t trade their time for money instead they acquire assets that make money for them. If you want to become wealthy you should know that the people ‘s lives are controlled by two emotions fear and greed.

There are a lot of people that say that they are not interested in money .but yet they work 8 hours a day to get more money. If you do not control properly fear and desire can lead to life’s biggest trap.

2. Financial literacy

If you want to become rich, it’s not about how much money you make, but how much money you keep. “Intelligence solves problems and produces money, but money without intelligence is soon gone.”

Financial Literacy
Financial Literacy

Rich people acquire assets while the poor and the middle class acquire liabilities that they think are assets. To become wealthy you must understand the difference. All you have to understand is that assets put money into the pocket and liabilities take money out of it. The lack of financial knowledge is the reason why the rich gets richer and poor gets poorer.

3. Mind your own business

Mind your own Business
Mind your own Business

It means that the rich focus on their assets while everyone else focuses on their income statements. So you have to build a strong group of assets. An asset may be a piece of real estate, a website or anything that produces a positive cash flow in your pocket every month.

4. Power of corporations

The corporation is one of the biggest secrets of the rich. They serve as a smarter way to play the game of life. The rich use cooperation to take the advantage of legal tax loopholes and protect their money. If you own a business and make a decent amount of money you need to consider setting up the corporation.

Power of Corportation
Power of Corporation

To get rich, the book says that you need to train your financial I.Q. Which is comprises of your knowledge of several broad subjects. To increase your financial IQ you must increase your knowledge in accounting, investing, increasing understanding markets and the law. Accounting is for understanding numbers. Investing is for using your money to make more money.Understanding market is the science of supply-demand and law is understanding tax laws and how to keep more of your own money.

Train your financial I.Q.
Train your financial I.Q.

The corporation is one of the biggest tax loopholes used by the rich to make and keep more of their money. Your financial I.Q. is the synergy of all the 4 topics combined.

5. The rich seizes opportunities to invest money

This principle can be summed as the rich see the opportunities to invest money. Remember that great opportunities are not seen with your eyes, they are seen with your mind.

Invest Money
Invest Money

The single most powerful asset you have is your mind and if trained well it can create an enormous amount of money for you.

Another important point from the book is, In the real world it is not the smart who get ahead, but the bold. It means that that the bold are risk-takers tend to make the most financial progress even though they are not as smart as others.

6. Work to learn, don’t work for money

Work to Learn
Work to Learn

Rich people work to learn but not for job security. If you want to get rich you should know a little bit about a lot of subjects. One of my favourite quotes is J.O.B. is an acronym for Just Over Broke. It means that focusing only on the job will prevent you from becoming truly wealthy.

7. Overcoming obstacles

“The primary difference between the rich and poor person is how they manage fear”. There are a few obstacles that hold you back from becoming rich. Obstacles are fear, cynicism, laziness, bad habits, arrogance.

Overcoming Obstacles
Overcoming Obstacles

Some people are so afraid of losing, that they lose. Cynicism is another word for self-doubt. It’s a major obstacle. Laziness is another obstacle that we all struggle with. The same laziness that prevents you from studying or going to the gym can hold you back from becoming rich. Bad habits can have the same effect. Stop watching so much television and go out and work  The final obstacle that everyone must face is arrogance. Robert Kiyosaki said, “Every time I have been arrogant, I lost money because I believed that what I Didn’t know wasn’t important”. Don’t get arrogance block your mind.

 

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