
Knowing Robert Kiyosaki was a life-changing experience, his teachings changed my mindset and made me a better person financially and emotionaly. Here, I highlighted excerpts from his book RICH DAD POOR DAD, that might also change your mindset.
FINANCIAL LITERACY
If you want to be rich you need to develop financial literacy. Even the difference between an asset and a liability is often confused. An asset earns you money and a liability burns your money. When you put money into assets such as stocks, bonds and investment properties you can earn money or income from them. Poor dad saw them as liabilities.
Liabilities are things that cost you money. A car loses 25% of its value the day you drive it off the lot. In addition, you have many other expenses such as loan repayments, insurance, registration, running and maintenance costs.
The rule is that if you want to get rich, put your money into income earning
assets. This doesn't mean not to buy a home or car - just think don't think of them as assets.
Lets look at the cash flow of the rich, middle class and poor. The poor tend to spend all of their money on living expenses, (food, clothes taxes etc) regardless of what their income is. Everyone has living expenses but the poor spend all of their money on them. The middle class tend to spend most of their money on liabilities such as credit card debt, personal loans and mortgage repayments. While the rich also have living expenses and liabilities they focus their money on purchasing income-producing assets.
MIND YOUR OWN BUSINESS
Most people who continue to struggle financially rely on their weekly paycheque. Job security is now a thing of the past and shouldn't be relied on. You have to start minding your own business. By this I don't mean throwing in your day job, but start building assets.
In my early days I worked on a commission basis at Xerox selling photocopiers. I used the money I made to purchase real estate. Within 3 years the income I was earning from real estate was greater than what I could earn selling photocopiers
The rich focus on increasing their assets while everyone else focuses on increasing their income. But when your income increases so do your expenses and liabilities. Most people rush out and purchase expensive consumer goods, home entertainment systems, cars, clothes, holidays� as soon as they can. The rich deliberately delay doing this until they have a good portfolio of assets bringing in a steady income.
THE RICH INVENT MONEY
Self confidence is one of the biggest things that hold us back in life. Boldness is the thing that gets us ahead, financially and otherwise. And we all possess at least some of it. If you want to succeed to financially we need courage to take risks and not cling to what we think is secure.
The more we develop our financial IQ the more options we have available to us. For example, in the early 1990s the economy in Phoenix was terrible. People were going bankrupt. Houses that were once $100,000 were going for $75,000. In the bankruptcy courts I was able to pick up these same houses for $20,000 or less. I would quickly resell these properties for $60,000 making a $40,000 profit. I did this 6 times and made $190,000 in profit and the total amount of time it took was only about 30 hours.
Think about how long it would take to save $190,000 out of your income and how much it would cost you in taxes to save it. This proves that no matter what the economic climate you can always succeed if you have good financial intelligence. This is just one example of the many different transactions I made on the way to financial success.
GETTING STARTED
These are the steps I suggest you follow to awaken your financial genius
1.
You need a big dream. Some thing that is strong and will drive you to success.
2.
Use the power of choice. For example, you could sit at home and watch TV all day or you could take a course in financial planning. The choice is yours
3.
Choose your friends carefully. Choose people who have great personal characteristics that you admire.
4.
Keep learning. The world is changing rapidly. What may have worked yesterday might not work today.
5.
Pay yourself first. Spend money on assets before you do anything else with your pay cheque.
*****Hoping that i was able to give you a nice food for thought***