The difference between the rich and the poor is determined by the advice given by the father to his son/daughter.
People with poor mindset advices us to follow the conventional path, go to school, get a degree, find a job, retire by 50 or 60 voila you are rich now. Just think about that, being rich at 60 is not a dream but being rich at 30s or 40s is.
There is nothing wrong with the above advice. In fact it is a better advice for people who don't know what to do with life. Venturing into the unknown without any experience can be a daunting process.
But if you want to get rich by 30 or 40 instead of 60, the above advice won't do much good to you. So what should you do instead?
This is where we need to listen to the advice of rich dad, not all of us are born into a rich family but if you are determined you can create one.
This article explains everything I learnt from the book Rich dad Poor dad written by Robert Kiyosaki.
Lesson 1: Rich people do not work for money
When you get a job you are working for money. You get paid for every hour you spent at the job. But there is a limit to this, the most anyone can work for a day is 8 to 10 hours (10+ if you are a hard worker)
So the amount of money you can make with this model is limited. Rich people understood this and made their money work for them.
How can you do that?
- Start a business
- Invest in stock market
- Buying real estate
- Create passive income
- Create products that can be mass produced
- Start a YouTube channel
All the above steps requires you to invest considerable amount of time and money but once you did that, your money works for you 24/7
Lesson 2: Financial literacy is more important than a degree
Why do we all go for a college and get degree? To get a job (so simple isn't it), so the primary reason behind all our education is to make money. But how much of it is spent in understanding how money works?
Why no one has taught you about how money works when the primary reason is to make money? A big question that no one has answer to.
Most probably no schools or colleges is going to teach you about money…atleast in the near future, so it’s time for you to take the matter at your own hand.
Lesson 3: The decision we make are based on Fear and Greed
Most people choose to become employee rather than start their own business is because FEAR, they fear that their business will fail, they fear what other people will say about them, they fear that they will stand out from the crowd.
But once they got the job and made their first money, GREED takes over. We buy the latest smartphones, we dine in 5 star hotels, we but extravagant things. And once their money is gone at the end of the month FEAR again takes over.
So now they go to job because they fear that there won't be any money for next month, and again Greed when they recieve their salary.
The cycle goes on and on and on...
Some of the other lessons include
Lesson 4: Pay yourself first
Lesson 5: buy assets not liabilities
Lesson 6: Work to learn, not to earn
No matter which stage you are in right now, there is something to learn from this book and I hope you found something useful in this article too.