Earlier this year I read the book Rich Dad Poor Dad by Robert Kiyosaki. The book has been a best-seller for over 15 years, so some would say I’m a little late, but it’s better late than never anyway as it was a good read.
First of all, I think the book should come with a warning that “this book will make you hate your job!” I read it. Then I convinced my husband to read it. We both felt like we’ve been wasting time working hard on our careers for over a decade … but then we realized that’s not true and all is not lost … and I’ll explain why.
The main points made in the book are that the rich find ways to make their money work for them, rather than the other way around (working for money). Kiyosaki also looks at how ‘financial education’ and understanding of money does not take place in the formal education system, it takes place at home, and that is why the rich remain rich and the poor remain poor, because that’s all it takes. they know.
Make your money work for you
The book explains that the conventional route for most people is to study hard in school, with the goal of landing a “good job,” and then spend a lifetime working hard for pay raises. We become dependent on our employers as we build our lives and spend most of our income on consumption and debt (mortgages, etc.). The poor and the middle class trade their time for money in this way, they get caught up in the ‘rat race’ because as their income increases, so does their consumption (more beautiful cars, clothes and vacations) and they go into more debt (bigger house, bigger mortgage).
Isn’t that what we all do, I hear you ask? No. The rich send their money out into the world and expect more money back! Obviously, there is a catch to this. Kiyosaki says that, fundamentally, it is about understanding a liability and an asset. The difference that is defined as an asset is something that generates cash for you. Take property, for example. If you invest in a rental property and the monthly rent is higher than the monthly costs, you are making a good profit. You are not trading your time to achieve this monthly income so this is an income generating asset. There are many other ways to invest in income-generating assets, for example, business investments, stocks … the goal is to accumulate assets, while minimizing liabilities (a liability includes, you may be surprised to know, the mortgage on the house in which lives in)
He argues that we should educate ourselves (and, in turn, educate our children) about financial literacy; he refers to this as “minding our own business.” This does not mean that we all start studying accounting degrees or that we quit our jobs and become freelancers. It is about knowing the options and opportunities to manage our money. We don’t need to be impatient on our journey to riches, but we must learn to build foundations and those foundations will ultimately allow us to have multiple sources of income, without depending on our paycheck. We must invest in ourselves, whether it is reading books, attending seminars, training courses, memberships to training communities or professionals … if it is true that ‘we are what we learn’, we must think about that!
Overall, the book got me thinking. A lot of. It made me think about work, money and the decisions that are made in life. It made me realize that I should think more in the long term when it comes to money and investments. It made me think about stopping looking for our next, slightly bigger house, when we can afford it … or our next newer car (and if my husband has the floor, sportier!), Because that’s what we really want . we should spend our money on … the answer is no. We should seek to invest in assets that return an income to us and use that income to pamper ourselves from time to time.
It also made me realize the importance of looking beyond employment to generate income. In fact, it was reading this book that encouraged me to become a member of the SFM / Digital Experts Academy. I decided to invest in myself and my learning outside of work … not something I’ve done since college. I decided to learn how to start my own business, no longer working for ‘the man’ but working for myself, and most importantly (since I still had my full-time job), I learned how to generate a relatively passive income. of my business. I hope Kiyosaki is proud!
Perhaps one downside to the book is that there is a huge focus on real estate investing. These are not necessarily easy investments for beginners. Also, while there is a lot of general negativity towards traditional employment, we all need to earn our money somewhere in order to make investments in the first place!
Rich Dad Poor Dad is not a quick recipe for getting rich; is a great book for you to think about financial education and a way to challenge your thinking about work and money.