Profits are made when you buy, not when you sell. Some people are terrified of losing money. The younger you are, the easier it is to become rich. Most people, in their drive to get rich, are trying to build an Empire State Building on a six-inch slab.”. When Robert asked this artist if he’d be interested in taking a course, he said, “I don’t have the time, and I don’t want to waste my money.” Most people focus on improving their product rather than learning how to sell it. And so the first lesson was learned: After a couple of weeks doing excruciatingly boring work, Robert told Mike that, Company: Making the owners and shareholders rich, Government: Possibly 100% of the work you do from January until May goes towards taxes, Bank: Your biggest expenses are your mortgage and credit card debt, The middle class buy liabilities they think are assets.”. That’s what governments told the poor and middle class to help get them on board with the idea. Instead of buying a huge yacht. He then ran an ad promoting the house for $60,000. As of this moment, 35 million people have lost their jobs, and finding new ones is going to be a hassle. Everything changed in 1997 when he published Rich Dad Poor Dad.This is one of the most famous finance books in the world, and has been translated into 51 languages.. Are you as pumped as I am? They lack a fear of loss. When Robert Kiyosaki wanted to buy a small condominium in foreclosure, he submitted a bid $10,000 less than asking. Being rich and being wealthy are two separate concepts when someone thinks about it. Excess cash flow generated by your assets should be invested again to acquire more assets. Not the real rich. And the job of a poor person pays you an income that then covers your expenses. Choose friends carefully: the power of association. You’ll find some of the best real estate investments by driving around. The two of them identified a two-bedroom townhouse for only $42,000. For rich people, assets and investments are their income. The second key takeaway is that it doesn’t matter how much money you make but how much you can keep. I own them, but they are not managed or run by other people. Robert Kiyosaki recommends taking on jobs where you can learn new skills instead of jobs that pay the most. It’s important to learn how to invest before investing. They decided to cast nickels out of lead to make money– literally. The loan committee saw that he owned a lot of real estate properties. He realized she was a great writer and that she should pursue that. His whole literary expertise is based upon spend years in school and learn nothing about money or investments. However, he knew this was the time to buy. Read: The 16 Percent Solution by Joel Moskowitz. Poor dad: ordinary earned, get a safe and secure job, Rich dad: portfolio and passive, make money work for you, “The key to financial freedom and great wealth is a person’s ability to convert earned income into passive and/or portfolio income.”, Warren Buffett advises that “Risk comes from not knowing what you’re doing.”, Rich dad would often say, “If you want to be rich, you must know what kind of income to work hard for, how to keep it, and how to protect it from loss. When asked why, she responded, “I do it for myself and the people I love. This response is what Mike’s dad was hoping for. Financial hardship comes from spending your life putting money into someone else’s pocket instead of your own. In this story, there is a boy named Robert who considered himself a father. “Often in the real world, it’s not the smart who get ahead, but … Most people learn but fail the most crucial step: action. It becomes a motivator – especially when debt collectors start calling. Jog, walk, or drive a certain area once a month for ten minutes. People with money often report that their friends without money never ask them how they did it. Hire yourself and start calling the shots. In one instance, Robert Kiyosaki tried to get a loan. The book states practical steps that teach you financial freedom at a very early age. Learning meant everything to my rich dad.”. Most people are more afraid of the pain of losing money than the happiness of becoming rich. You don’t have to choose friends based on their financial statements. Poor people often get angry when they learn rich people pay less in taxes. And the expenses from their personal income statement can go into the expenses for the corporation. However, not a single person reached out. People who pay themselves last, lose all their money with expenses. Teach and you shall receive: the power of giving. The poor dad emphasized on education as a way of achieving financial success. Today with Summary #4, we continue the series on a book called Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! Bitcoin jumps over $23K and shows no signs of slowing down. Hisham Sarwar This skill is called financial aptitude. Twitter | Facebook You’d be surprised at how many people would say yes to an offer. Losers are defeated by loss. … “Rich people acquire assets. Neither had found success yet. For the next three weeks, Robert and Mike worked for their rich dad for free. Part autobiography and part finance masterclass, Rich Dad Poor Dad gives you the tips to start thinking and acting like a rich dad. As teenagers, Mike and Robert would work with their rich dad. After three months, he was making $1,000 a month that he put into the college fund. Robert advised him to sell it using a 1031 tax-deferred exchange. The book correlation a simple concept that most people will work for money but rich people make money work for them. As a result, he never makes it financially despite working hard while the rich dad, who was financially intelligent, invested in assets, undertook risks, and achieved great financial success. He proposed that the two boys work for him so that he can teach them faster. You don’t know what you’re talking about.’”. Some economists in California even noticed that about 95% of income gains between 2009-2012 went to the wealthiest people in the world– the one percent. These views aren’t meant to make you hopeless or miserable but to give an insight. Define your own direction. A corporation can spend everything it can and be taxed only on everything left over. It is rare that the asking price is lower than something is worth. Pay your brokers well: the power of good advice. When you add up health costs and long-term nursing home care, it’s quite likely that the average American will run out of money during their retirement. Rich Dad said it was very important to learn how not … His rich dad noticed that Robert had sounded like his employees after only one month. Rich Dad Poor Dad is about Robert Kiyosaki and his two dads—his real father (poor dad) and the father of his best friend (rich dad)—and the ways in which both men shaped his thoughts about money and investing. You can still hate losing without being afraid of it. This Rich Dad Poor Dad summary is going to provide a breakdown of the book and the teachings given by Kiyosaki. It’s not what you know but how fast you learn. Robert shares the story of an artist in Hawaii who inherited $35,000. When Robert Kiyosaki first published Rich Dad, Poor Dad in 1997, every publisher who had rejected his book had criticized the lesson regarding a person’s house not being an asset. “The most important specialized skills are sales and marketing.”, Robert Kiyosaki’s friend Blair Singer shares, “Sales = Income. Making money and many new ventures to generate a steady income at some times is easy as well as complicated. Some consider to be a myth, Not possible but in these isolated times this is as true as the 14 commandments. Your ability to sell– to communicate and position your strengths– directly impacts your success.”. I personally hold the archaic education system primarily responsible for this growing gap.”, “The primary difference between a rich person and a poor person is how they manage fear.”. The boys had to pay for college on their own. They feel a sense of pride when they win, but they still brag even if they lose. … In today’s world, there’s never been a more significant divide between the rich and all other income classes. Without a financial foundation, you’ll be stuck to your job and its security for the rest of your life. Thus, by consistently trading up, he delays getting taxed until the time comes to liquidate. After a couple of weeks doing excruciatingly boring work, Robert told Mike that he wanted to quit. Many people have stopped working their daily jobs knowing how much the embarrassment it has become to be laid off or furloughed. Those who earn promotions tend to be specialists. When you look at the data visually, you can see how big of an impact the crashes were. Something to remember about the government is that if they don’t spend their allotted funds, they’ll risk losing money when the next budget is announced. Employees often feel disappointed looking at their paychecks– especially after tax and deductions. In this section of Rich Dad Poor Dad, Robert Kiyosaki shares that many people view their home as an asset. It’s also good to note that as you sell your assets, the government taxes you on the gains. It’s how much money you keep.”. Find a job where you can learn skills. However, for a rich person, their assets pay them an income. This period is a great era to be building assets. Rich dad also shared how happy he was that Robert Kiyosaki got angry. He said he could find about four to five excellent properties a day, whereas others may look and find none. Another key takeaway that the book keeps reminding us is born rich and made rich. Robert Kiyosaki arrived at 8 o’clock sharp for his meeting with Mike’s dad. Learn to Sell. When presidents promise to raise taxes on the rich, they typically mean the middle class. The fundamental trouble with working for money is that a job is a short term solution to a long term problem. Notably, after each stock market crash, the American government and the Federal Reserve Bank started “printing money.”. The reality is a job is merely a short-term solution to a long-term problem. LESSON # 4 A BRIEF HISTORY OF TAXES. If a person spends all they have, the pattern will continue every time they make money. With over 32 million copies sold worldwide, Rich Dad Poor Dad is translated in more than 50 languages across 100 countries and many bloggers have written the book’s summary in different languages on their websites. One was highly educated with a Ph.D. and so intelligent he completed his undergraduate degree in only two years. He did this by offering to pay them twenty-five cents an hour. “You’re only poor if you give up. There’s a section called 1031 in the Internal Revenue Code that allows a seller to delay the payment of taxes in w when they sell real estate provided that they buy a more expensive piece of real estate. Most people learned how to work hard instead of how to make money work hard for them. It’s vital to learn the subject of accounting if your long-term goal is to be rich – no matter how boring you think the topic is. “Don’t get into large debt positions that you have to pay for. Freelancing is the key here. This newfound motivation made him work harder at selling Xerox machines at work. His poor dad taught him to give away his time and knowledge, but not money. The secret to knowing how to make money is simply about creating assets instead of liabilities. Then, the company goes public, and whether it’s $2 each or if it flies to $20, you can sometimes make a million dollars in less than a year. When the overqualified father dies, he … They decided to cast nickels out of lead to make money– literally. If you want to buy something, you must first generate enough cash flow from your assets to cover the expenses. Failure inspires winners and defeats losers. Do not be afraid of losing and be bold enough to admit and learn from your failures. McDonald’s founder, Ray Kroc, wanted the land underneath every McDonald’s location for free with every franchise he opened, Use assets to buy luxuries: the power of focus. Approach risk like a Texan. Protection from lawsuits: The rich use corporations to protect their assets from creditors, whereas the poor and middle class try to own everything themselves. Robert’s father holds a PhD degree and goes to a 9-5 job. However, they are not owners of the company they work for. Still have a choice to make something worthwhile. However, it wasn’t until 2007 when “subprime borrowers began to default on their subprime mortgages,” that people realized that a house wasn’t an asset. The average American only has less than $400 in savings, with an astounding 34% with none at all. Lesson 5: The Rich Invent Money. That is the key to great wealth… If you do not understand the differences in those three incomes and do not learn the skills on how to acquire and protect those incomes, you will probably spend your life earning less than you could and working harder than you should.”. But by working for others, they’ll be dependent on pay raises, getting second jobs, or working overtime. He and his wife had about a million dollars to invest in some amazing deals. You set your time as well as your goals. That’s why he carefully chose every location for his franchises. It’s essential to not give in to your emotions, such as fear, so that you can prevent any quick reactions and think objectively about a situation. The biggest fear for aging Americans is running out of money before they die. ‘How can I afford it?’ opens up possibilities, excitement, and dreams.” Instead of buying his kids everything they wanted, rich dad asked them to think about how they can afford it. Most of Robert Kiyosaki’s millions started with as little as $5,000 or $10,000 investments. Growing up, poor dad recommended that Robert read books while rich dad recommended that Robert master financial literacy. 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