Stuck In The Rat Race?

Robert Kiyosaki’s New York Times best-selling book, Rich Dad Poor Dad discusses the mindset of financially successful people and the choices they make to generate wealth. It explains that more important than education or socioeconomic background are a set of principals that lead people to either live a wealthy life or get trapped in the struggle of the rat race. Although the book is directed to individuals, the principals are universal and can be applied to businesses as well. Are you stuck in the rat race? Here’s what you need to know:

Understand Financials

Those who are financially successful have studied at least basic financial management and know about assets, income, expenses and liabilities. Income includes wages and salaries. Expenses include taxes and rent. Assets are investments that put money into your pocket while liabilities are anything that take money out of your pocket, including loans, credit card debts, and mortgages.

Those who escape the rat race set goals focus on increasing assets rather than income. The main idea is to keep expenses low, reduce liabilities, and build solid assets. Ideally one will build strong enough investments to cover all expenses each month. Those who are stuck in the rat race are more passive and wait for income increases over time and use the majority of that income to cover expenses. Where do you currently stand?

Work To Build Assets

There are two primary emotions that hinder people from developing wealth: fear and desire. The fear of not being able to afford monthly expenses prevents many from honestly evaluating investments and other potential sources of income. Desire, on the other hand, attempts to maintain appearances with expensive, but unnecessary things that make people prisoners of their own lifestyle. Those who successfully escape the rat race are in control of their emotions, put their ego aside, assess where expenses can be cut and focus on creating residual money—assets that increase even without working. How in control are you of these two emotions?

Take Calculated Risks

With the rate of inflation, saving money in a bank generates virtually no return. Those who want their investments to grow exponentially do their homework, gather courage and overcome the fear to take risks. They’re not afraid to mitigate potential losses by seeking advice from professionals and people who are more knowledgeable than them. They also don’t get caught like deer in the headlights when it’s time to make a move. Those who are stuck in the rat race are too afraid to ever take chances. How successful are you at risk taking?

Work To Learn

Kiyosaki breaks down the three main management skills necessary for success:

1. The management of cash flow: assets and liabilities
2. The management of systems: basic economic theory, political landscape, etc
3. The management of people

If one is able to develop these skill sets their well on their way to success. The rich use their jobs as opportunities to develop necessary skills for success. These people take the long view of life—instead of just working for money, they take classes or second jobs that teach new skills.

Kiyosaki goes on to discuss five main obstacles to success.

1. Fear of losing money: wealthy people use failure as a learning tool and aren’t afraid to fail.
2. Cynicism: those who are too affected by the criticism of others rarely gain the confidence to take risks.
3. Laziness: some people are too lazy because they don’t have the drive. Others know what they need to do, but put it off. Building wealth and financial knowledge takes considerable time and effort. Waiting only amounts to money lost.
4. Bad Habits in spending and investing: not making proper financial choices and assessments result in huge amounts of money wasted.
5. Arrogance: never fail to remember that becoming wealthy is a collaborative effort. Wealthy people recognize their weaknesses and seek out people who can help them to achieve their goals. Those who think they know it all or who think they can do it all on their own rarely make it.

The Bottom Line

So how would you self evaluate? Are you stuck in the rat race? Do you have a solid plan and expert support to get out? At times we’ve all been guilty of bad habits or procrastination; however, without putting effort into learning and growing, we’re doomed to repeat the same mistakes and stay trapped in the same cycle. Are you ready to do something and get out?

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Dr. Roshawnna Novellus is a financial strategist that works with driven, ambitious, forward thinking entrepreneurs in technology, real estate and creative arts. She helps these entrepreneurs attract investment, sustain revenue and profit, and optimize ROI on products and services. For more information, schedule a time to speak with her directly here.