About The Book
Rich Dad Poor Dad will....
-Explore the myth that you need to earn a high income to become rich
-Challenge the belief that your house is an asset
-Show parents why they can't rely on the school system to teach their kids about money
-Define once and for all an asset and a liability
-Teach you what to teach your kids about money for their future financial success
What follows is the story of Robert's two dads, a rich one and a poor one, that expounds on the skills he's developed over a lifetime. The contrast between two dads provides an important perspective.
For any accountants who read this book, suspend your academic book knowledge and open your mind to the theories Robert presents.
Although many of them challenge the very fundamentals of generally accepted accounting principles, they provide a valuable insight into the way true investors analyze their investment decisions.
About The Authors
Robert T. Kiyosaki
"The main reason people struggle financially is because they spent years in school but learned nothing about money. The result is, people learn to work for money...but never learn to have money work for them," says Robert
Born and raised in Hawaii, Robert is fourth-generation Japanese American. His father was the head of education for the state of Hawaii. After high school, Robert was educated in New York and upon graduation, he joined the U.S. Marine Corps and went to Vietnam as an officer and a helicopter gunship pilot.
Returning from the war, Robert's business career began. In 1977 he founded a company that brought to the market the first nylon and Velcro "surfer" wallets, which grew into a multimillion-dollar worldwide product.
Leaving the business world, he co-founded, in 1985, an international education company that operated in seven countries, teaching business and investing to tens of thousands of graduates.
Retiring at age 47, Robert does what he enjoys most...investing. Concerned about the growing gap between the haves and have nots, Robert created the board game CASHFLOW, which teaches the game of money, here before only known by the rich.
Although Robert's business is real estate and developing small cap companies, his true love and passion is teaching.
Robert Kiyosaki's message is clear, "Take responsibility for your finances or take orders all your life. You're either a master of money or a slave to it."
Robert has one solid earth-shaking message and that message is - Awaken the Financial Genius that lies within you. Your genius is waiting to come out.
Sharon L. Lechter
CPA, consultant to the toy and publishing industries and business owner, Sharon Lechter has dedicated her professional efforts to the field of education.
She graduated with honors from Florida State University with a degree in accounting. She joined the ranks of what was then one of the big eight accounting firms, and went on to become the CFO of a turnaround company in the computer industry, tax director for a national insurance company and founder and Associate Publisher of the first regional woman's magazine in
Wisconsin, all while maintaining her professional credentials as a CPA.
Her focus quickly changed to education as she watched her own three children grow. It was a struggle to get them to read. They would rather watch TV.
So she was delighted to join forces with the inventor of the first electronic "talking book" and help expand the electronic book industry to a multimillion-dollar international market. Today, she remains a pioneer in developing new technologies to bring the book back into children's lives.
The best lines or teachings from the book
The love of money is the root of all evil OR The lack of money is the root of all evil.
Lesson #1 The Rich Don't Work for Money
Lesson #2 Why Teach Financial Literacy
Lesson #3 Mind Your Own Business
Lesson #4 The History of Taxes and the Power of Corporations
Lesson #5 The Rich Invent Money
Lesson #6 Work to Learn - Don't Work for Money
Money often makes obvious our tragic human flaws. Money often puts a spotlight on what we do not know. That is why, all too often, a person who comes into a sudden windfall of cash - let's say an inheritance, a pay raise or lottery winnings - soon returns to the same financial mess,if not worse than the mess they were in before they received the money. Money only accentuates the cash-flow pattern running in your head. If your pattern is to spend everything you get, most likely an increase in cash will just result in an increase in spending. Thus, the saying, "A fool and his money is one big party."
As an employee who is also a homeowner, your working efforts are generally as follows:
1. You work for someone else. Most people, working for a paycheck, are making the owner, or the shareholders, richer. Your efforts and success will help provide for the owner's success and retirement.
2. You work for the government. The government takes its share from your paycheck before you even see it. By working harder, you simply increase the amount of taxes taken by the government-most people work from January to May just for the government.
3. You work for the bank. After taxes, your next largest expense is usually your mortgage and credit card debt. The problem with simply working harder is that each of these three levels takes a greater share of your increased efforts.
You need to learn how to have your increased efforts benefit you and your family directly.
Once you have decided to concentrate on minding your own business, how do you set your goals?
For most people, they must keep their profession and rely on their wages to fund their acquisition of assets. As their assets grow, how do they measure the extent of their success? When does someone realize that they are rich, that they have wealth?..........
Check the below definition :-
Definition of Wealth borrowed from Buckminster Fuller: Wealth is a person's ability to survive so many number of days forward...or if I stopped working today, how long could I survive?
List of assets to be acquired -
1. Businesses that do not require my presence. I own them, but they are managed or run by other people. If I have to work there, it's not a business. It becomes my job.
2. Stocks
3. Bonds
4. Mutual Funds
5. Income-generating real estate
6. Notes (IOUs)
7. Royalties from intellectual property such as music, scripts, patents
8. And anything else that has value, producers income or appreciates and has a ready market.
"Be smart and you won't be pushed around as much."
Financial IQ is made up of knowledge from four broad areas of expertise
No. 1 is Accounting
No. 2 is Investing
No. 3 is Understanding Markets
No. 4 is the Law
The Rich with Corporations
1. Earn 2. Spend 3. Pay Taxes
People Who Work for corporations
1. Earn 2. Pay Taxes 3. Spend
Excessive fear and self-doubt are the greatest detractors of personal genius.
Financial intelligence is made up of four main technical skills :-
1. Financial literacy - The ability to read numbers
2. Investment strategies - The science of money making money
3. The market - Supply and demand. Alexander Graham Bell gave the market what it wanted. So did Bill Gates. A $75,000 house offered for $60,000 that cost $20,000 was also the result of seizing an opportunity created by the market. Somebody was buying, and someone was selling.
4. The law - The awareness of accounting, corporate, state and national rules and regulations.
Financial Intelligence is a synergy of accounting, investing, marketing and law.
The classic example of a synergy of skills was that young writer for the newspaper. If she diligently learned the skills of sales and marketing, her income would jump dramatically. Take some courses in advertising copywriting as well as sales. Then, instead of working at the newspaper, seek a job at an advertising agency. Even if it were a cut in pay, she would learn how
to communicate in "short cuts" that are used in successful advertising. She also would spend time learning public relations, an important skill. She would learn how to get millions in free publicity. Then, at night and on weekends, she could be writing her great novel. When it was finished, she would be better able to sell her book. Then, in a short while, she could
be a "best-selling author."
"You want to know a little about a lot."
"Job is an acronym for 'Just Over Broke'."
"Workers work hard enough to not be fired, and owners pay just enough so that workers won't quit."
The main management skills needed for success are -
1. The management of cash flow
2. The management of systems (including yourself and time with family)
3. The management of people
The better you are at communicating, negotiating and handling your fear of rejection, the easier life is.
Five main reasons why financially literate people may still not develop abundant asset columns -
1. Fear
2. Cynicism
3. Laziness
4. Bad Habits
5. Arrogance
"Do what you feel in your heart to be right-for you'll be criticized anyway. You'll be damned if you do, and damned if you don't."
Arrogance is ego plus ignorance.
Getting Started
1. I NEED A REASON GREATER THAN REALITY
The power of spirit. If you ask most people if they would like to be rich or financially free, they would say "yes." But then reality sets in. The road seems too long with too many hills to climb. It's easier to just work for money and hand the excess over to your broker.
2. I CHOOSE DAILY
The power of choice. That is the main reason people want to live in a free country. We want the power to choose.
3. CHOOSE FRIENDS CAREFULLY
The power of association. First of all, do not choose friends by their financial statements. Have friends who have actually taken the vow of poverty as well as friends who earn millions every year. The point is you learn from all of them, and also consciously make the effort to learn from them.
A WARNING: Don't listen to poor or frightened people. They are the "Chicken Littles" of life. When it comes to money, especially investments, "The sky is always falling." They can always tell you why something won't work. The problem is, people listen to them, but people who blindly accept doom-and-gloom information are also "Chicken Littles." As that old
saying goes, "Chickens of a feather agree together."
4. MASTER A FORMULA AND THEN LEARN A NEW ONEThe power of learning quickly. In order to make bread, every baker follows a recipe, even if it's only held in their head.
The same is true for making money. That's why money is often called "dough".
5. PAY YOURSELF FIRSTThe power of self-discipline. If you cannot get control of yourself, do not try to get rich.The Richest Man in Babylon, by George Classen, is where the statement "pay yourself first" comes from.(a) Don't get into large debt positions that you have to pay for. Keep your expenses low. Build up assets first. Then, buy the big house or nice car. Being stuck in the rat race is not intelligent.(b) When you come up short, let the pressure build and don't dip into your savings or investments. Use the pressure to inspire your financial genius to come up with new ways of making more money and then pay your bills. You will have increased
your ability to make more money as well as your financial intelligence.
6. PAY YOUR BROKERS WELL
The power of good advice.
7. BE AN "INDIAN GIVER"
This is the power of getting something for nothing. When the first white settlers came to America, they were taken aback by a cultural practice some American Indians had. For example, if a settler was cold, the Indian would give the person a blanket.
Mistaking it for a gift, the settler was often offended when the Indian asked for it back.
The Indians also got upset when they realized the settlers did not want to give it back. That is where the term "Indian giver" came from. A simple cultural misunderstanding.
8. ASSETS BUY LUXURIES
The power of focus.
9. THE NEED FOR HEROES
The power of myth. When it comes to investing, too many people make it sound hard. Instead find heroes who make it look easy.
Have heroes such as Donald Trump, Warren Buffet, Peter Lynch, George Soros and Jim Rogers.
10. TEACH AND YOU SHALL RECEIVE
The power of giving.
ROBERT KIYOSAKI'S EDUMERCIAL
An Educational Commercial
THE THREE INCOMES
In the world of accounting, there are three different types of income. They are -
1. Earned Income
2. Passive Income
3. Portfolio Income
When my real dad said to me, "Go to school, get good grades, and find a safe secure job," he was recommending I work for earned income. When my rich dad said, "The rich don't work for money, they have their money work for them," he was talking about passive income and portfolio income. Passive income, in most cases, is income derived from real estate investments.
Portfolio income is income derived from paper assets...paper assets such as stocks, bonds, and mutual funds. Portfolio income is the income that makes Bill Gates the richest man in the world, not earned income.
Rich dad used to say, "The key to becoming wealthy is the ability to convert earned income into passive income and/or portfolio income as quickly as possible."
To download audio report regarding author's deeper thoughts and insights into 6 basic lessons "What My Rich Dad Taught Me About Money", register on the following site -
http://www.richdadbook1.com/
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