Be Familiar with the Rich Dad & Poor Dad Theory
Rich Dad Poor Dad, a book written in 2000 by Robert Kiyosaki and Sharon Lechter, is an introduction to the financial concepts that have made him one of the world's most well-known and respected financial gurus.
The book's goal is to show readers how to create wealth by telling stories about his own personal experiences and lessons learned from his father.
The Rich Don’t Work for Money-The Poor and Middle Class Work for Money
The title of the book is a reference to Kiyosaki's childhood, when he had two fathers: his biological father and a friend of his father who taught him about money. He writes that as a child, he thought both men meant the same thing when they said "rich people." As he grew older, he realized they were not. His biological father had a low-paying job working for someone else; his friend was self-employed and made more money in a lifetime than most people could dream of.
This book is about the distinction between these two types of wealthy people: The distinction between those who work for a living and those who generate passive income through investments such as stocks or real estate.
Learn to Use Leverage
The next lesson in the Rich Dad Poor Dad series is to learn how to use leverage. To put it another way, borrowing money to purchase an asset. This can be an excellent wealth-building strategy because it allows you to make investments that would otherwise be prohibitively expensive on your own. For example, suppose you wanted to invest in real estate but didn't have any cash and no wealthy friends willing to lend it to you (and we all know how hard those are). If this were the case, using leverage would give you access to more than one property without requiring a large sum of money—which means more profit when you sell it later!
However, there are risks to using leverage, such as debt, which can have a significant impact on people's lives if they don't know how much they're spending each month or year—or even whether their investments will ever pay off! This is why knowing not only how much money comes in each month, but also where every single dollar goes, is essential.
Maximize Your Potential
Making the most of your abilities is what it means to maximize your potential. Don't be afraid to seek assistance, receive training, or take risks.
If you want to be wealthy and successful, you must work smart as well as hard. To advance in life, you must go above and beyond what others expect of you and maximize your resources by learning new skills and taking on new challenges.
The Power of Money
Money is a powerful tool that, when used wisely, can help you achieve financial freedom, security, and independence. The key to accumulating wealth is to invest in assets that generate passive income. Once you've established a stable income stream and built up your asset base, you'll be able to live off the proceeds of these assets as they grow over time.
Understanding Financial Statements
The three most important financial statements are:
Income statement
Balance sheet
Cash flow statement
Secrets of the Millionaire Mind
The author discusses the distinction between being rich and being wealthy in this section. He claims that wealth is not necessarily defined by how much money you have, but by your ability to maintain your lifestyle without working. According to him, wealth is attained through careful planning, big thinking, and faith in oneself.
The author then discusses how important it is for you as an individual to think big about what you want out of life and how hard work will get you there (if it's worth pursuing). "If what I'm doing now doesn't make me more money tomorrow than it did today (or even yesterday), then I need a new plan," he says.
Learn about how to make money for yourself instead of for your employer
If you want to make more money than your employer, you should learn how to invest in stocks, bonds, real estate, and other types of investments. You can even start a business or blog to earn money.
Source: Rich Dad Poor Dad by Robert Kiyosaki with Sharon Lechter (2000)