Money Monday – Lessons from ‘Rich Dad Poor Dad’ by Robert Kiyosaki

“Great opportunities are not seen with your eyes. They are seen with your mind. Most people never get wealthy simply because they are not trained financially to recognize opportunities right in front of them.”

― Robert T. Kiyosaki, Rich Dad, Poor Dad

Not having enough income or no income at all can make becoming wealthy a dream that’s only afforded the elite few. We’ve been taught that only super high income earners and people born into money, can become wealthy. Yes they can get richer, some lose their wealth, but it does not mean that you cannot create your wealth too.

“Rich Dad Poor Dad’ challenges these misleading beliefs about wealth and demonstrates how you can start your way to creating your own riches. He illustrates this with a story about his real father, a teacher who made a good living but struggled to make ends meet, and his friend’s father who had little education but ran multiple businesses. The latter opened up a new world to him by introducing him to financial education outside of school.

Here are the lessons you’ll learn from this book:

Lesson 1: The rich do not work for money but rather it is money that works for them. He explains how greed and fear affect our financial patterns and how they can make us work so hard for so little just for security.

Lesson 2: Teaching financial literacy is of supreme importance and it should start at an early age. It’s not about how much you make but how much you keep (This reminds me of ‘The Richest Man in Babylon’). We have many professionals and highly educated people who are excellent at their jobs but are not so good with personal finances. He stresses that one needs a strong financial foundation and in addition, an education on how to manage money.

Lesson 3: We spend time minding other people’s businesses and less on our own. You could spend a lifetime working for someone, making them money and end up with nothing for yourself. Here he introduces Assets and Liabilities and the importance of acquiring assets, and reducing liabilities and expenses.

Lesson 4: It’s crucial to understand tax and its advantages. Business owners earn, spend and pay taxes, while employees earn, pay taxes and spend what is left. If you want to earn wealth you should make it your business to know as much as you can about your tax legislation.

Lesson 5: Financial IQ allows you to see opportunities where others don’t and to act on them. Wealthy people create their own luck and end up inventing money. Whilst money may seem like the greatest asset you can possess, it’s actually your mind that is your greatest asset.

Lesson 6: He points out how when it comes to money, the only skill that most of us know is to work hard. A lot of people work hard at a secure job and focus on the pay and benefits, which is short-term vision. He suggests learning another skill, one that will help increase your income.

Lesson 7: Robert lists five main reasons financially illiterate people may still not have abundant cash flow: fear, cynicism, laziness, bad habits and arrogance. How these are managed makes a difference between people with wealth and those without.

Lesson 8: How do you start?  Some of the things advises us to do are to find a reason greater than reality. Make a daily choice to be rich, associate yourself with the right people, and be aware of the power of learning quickly. Master your self-discipline and pay yourself first (‘The Richest Man in Babylon).

Lesson 9: Some few more things to do:

  • Take time to assess what’s working and what’s not.
  • Learn from someone who has done it before.
  • READ! Take classes and go to seminars.
  • History has good lessons, learn from there.
  • Take action.

There’s a whole lot more in the book that you can read, the above are merely to show you the kind of knowledge you will gain from it.

Overall, this is an easy book to start on your financial literacy journey. I would recommend that people read it as early in their lives as they can. Give it to a younger person as a gift or someone with little to no financial IQ. You can use it as a tool to gaining financial freedom. I’ve read other books on the same subject and this is one of the easiest to understand.

I hope this helps you on making a financial difference in your life. Enjoy!

Don’t Let The Festive Season Leave Thy Purse Lean

Remembering ‘The 7 Cures For A Lean Purse’ from The Richest Man in Babylon by George S. Clason

‘Tis the season to be jolly, buying gifts, going on holiday, drinking, eating and being merry. Let there be joy but try not to go into the New Year with broke beginnings. To avoid turning that jolly into gloom, here’s a reminder from The Richest Man in Babylon to keep your finances in check.

If you want to read the book review, it’s here.

“The reason why we have never found measure of wealth. We never sought it.”
― George Clason, The Richest Man in Babylon

The 7 Cures For A Lean Purse’

  1. Start thy purse to fattening.
  2. Control thy expenditure. LOUDER: CONTROL THY EXPENDITURE!
  3. Make thy gold multiply.
  4. Guard thy treasures from loss.
  5. Make of thy dwelling a profitable investment.
  6. Insure a future income.
  7. Increase the ability to learn.

Don’t wait for January and the ever fruitless Ney Year’s resolutions. How many years have you been doing that but failing to follow through? You still have some days in December, you still have NOW, so make use of it so that January is not the worst month of the year, where you’re counting the days to payday.

Happy Holidays!