RICH DAD POOR DAD

Rich Dad Poor Dad is written by Robert Kiyosaki & was one of my very 1st books which I read at the beginning of the lockdown of 2020. This book revolves around financial independence and the importance of investing at an early stage in your life. This article will take you through a summary of the book Rich Dad Poor Dad and identifies important lessons for everyone. I have summarized the book into 19 lessons for your quick and better understanding. Let’s take a look at what lessons we can extract from this amazing book.

• For most people, their profession and job are their single means of income and they live through their work to survive and meet basic requirements. For rich people, their profession is the main flowing stream of income but besides that what they possess are assets and investments which grow their income exponentially.
• If you want to buy something, you must first generate enough cash flow from your assets and make equal amounts of investment returns to cover the expenses for everything you want to buy and not the other way round. The emphasis is to buy luxuries last and start investing.
• The profits accruing out of your investments should not be directly used up. Rather, excess cash flow generated by your assets should be invested again to acquire more assets and should be placed in place from where you earn while you sleep.
• Do not simply aim for more income, aim for more valuable assets, keep repeating the circle. First, try to construct a permanent income flow and parallel to that start acquiring assets, not liabilities.
• Reduce your expenses low and cut your liabilities. Expenses and liabilities beyond means are not good. Keep a simple formula in mind: Your Income should always be > Expenses. Try to cut down on your credits.
• Create a corporation to protect your assets and reduce tax expenses. An employee earns, gets taxed, and then spends what is left. But a business owner spends what he makes.
• Know a little about everything. Learn something about accounting, investing, markets, law, sales, marketing, leadership, writing, speaking, and communication. Know little about anything you can. Bill Gates has also talked about the same point in his various interviews that don't stick with just one thing rather, learn new soft and hard skills constantly.
• Work to learn, don’t work to earn. Find a job where you can learn skills. Alibaba’s CEO Jack Ma often emphasizes the importance of learning skills over making money in his interviews.
• Do not simply buy investments. First, learn how to invest as no one else can do it better than you. Make your investments based on your consciences and not someone else's
• You become what you study, so choose your study materials carefully. Start reading and consuming something which adds to the idea of you overspending time on something which just is a waste of time and does not add value.
• Every rich person has lost money at some point, but many poor people have never lost a penny. Playing not to lose money means you will never make money. “Winning means being unafraid to lose.“
• Failure inspires winners and defeats losers. Do not be afraid of losing and be bold enough to admit and learn from your failures. Start experimenting and tapping different areas. Don't fear from fear of losing.
• Be in control of your emotions. Do not let fear or the opinion of anyone dictate your actions. People will constantly try to pull you back and trust me you will get affected, that's human nature. But, do not allow it to harness your mental state & decisions.
• There is a popular saying, "If you hang around with 3 millionaires, you will be the next." Surround yourself with winners and not loosers.Sit with people who are smarter than you and you can learn a lot by surrounding yourself in their company.
• Saying “I can’t afford it” shuts down your brain. Asking “How can I afford it?” opens up your brain. Whenever you want something but you can't afford it try and ask how the hell can I buy it. Change your questions to change your life.
• Pay yourself first. Each month, first invest a certain amount of money into income-generating assets before you pay your bills. Short of money, use this pressure to keep yourself on your toes to generate more cash.
• Dream big, have a clear game plan in your mind. Always seek answers to important questions such as “why do you want to earn more passive income?”
• Develop a skill to listen. Listening is more important than talking. Do not constantly argue, instead listen and observe. Ask questions and try to gather as much knowledge as you can from others. You buy People from the way you talk.
• Another key takeaway that the book keeps reminding us is born rich and made rich concept. People who are born rich meaning they have big factories are less financially sound than people who are made rich. Made rich people are those individuals whom that understand if their income or turnover is down they need to find new ventures to generate cash flow whereas born rich have to find whole new ways. On the contrary, Made rich invest in assets that generate income whereas born rich invest in asses of value. Born rich will invest in houses cars and luxury items whereas Made rich will invest in an ad agency or investment portfolios to keep on generating income.
• On the market: do not follow the crowd, and do not try to time the market. Try doing that what you love but not at the cost of your finances. Profits are made when you buy, not when you sell. Remember that!

Hope you gained some knowledge and liked my first kind of book summary. If you did, don't forget to like and spread this with your friends!