Rich Dad, Poor Dad

I am watch a big fuss about the book "Rich Dad, Poor Dad" Robert Kiyosaki. Many people are attracted to the word "rich" in it. The book offers a different perspective on how the money work in the modern Western world, but it, in itself is not a universal key to wealth. Many real action are needed. The specific business described in the book may not work on absolutely everywhere. But, unless you live in the woods, in the countryside, in remote locations, if you produce everything you consume and you are self-sufficient, this book is likely to be for you and bring you valuable knowledge and a different way of thinking.

What is a wealth for you? Perhaps the figure in the bank account? Or the iPhone, the sophisticated clothes, expensive car, house, yacht? Or maybe freedom, leisure, the ability to do whatever you want - to be lazy, to travel? Or a large loving family and domesticity? Depending on the state in which everyone is of his life, would give a different definition.

The book explores mostly the financial type of wealth. The crucial question that it asks is, "How long can you live, if today you stop working?". This generates a lot of thoughts and reflections. Think independently, without taking into account neither my opinion nor the opinion of those around you.

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The scheme, which is shown and explained in many places in the book is the following:
  • Assets - things that bring money. Many people, including myself, had a distorted view about the asset. The house or the apartment or say the home insulation can save you money in the future - in form of rent, energy etc, but are not assets while you live in them. Unless you rent them, they will only bring you Expenses. The car can save time, expenses for taxis and buses, but brings repair and fuel expenses. Unless you use it as a taxi or for transporting goods, it remains in the column liability. I will examine several types of assets:
  1. Assets - time for money - ie salary. Their size depends apart from yourself - how well you "sell" yourself, largely from one person or group of people to whom you sell your skills and your time for money. Time and freedom are the smallest here and even doing your job well, there is no certainty that revenues will increase due to the presence of an intermediary (the employer). This does not mean to not work well. There is a principle characteristic not only for the money and work - if you want to get more, you have to give more.

    If you are currently sure that you give more value than you receive, the next step is to request it. Ask and you shall be given. This principle is taken from the Bible. The result of this action may be:
    • Your own judgment is wrong and it is necessary to give more value - it is something that happens to everyone, including me;
    • To get the desired promotion;
    • To not get the promotion. In this case you may think about changing the employer.
    Whatever you do, however, You will exit victorious. Or will you get the desired, or you will know what exactly to do.
  2. Assets of trade and business - buying something at one price and selling it to another another. Investing money in manufacture or cultivation of a product and selling the fruits of labor, so the balance is at plus. This is the second type of asset that still, in most cases, requires much time and effort to operate.
  3. The third type of asset is rental income, advertising, stocks, interest from deposits, a business that does not require your presence and others. This kind of assets may seem, at first site to generate the least, but they are the most sweet, because in most cases they do not need our personal time to work. And time is a resource for which we do not think about as much;
  • Liabilities - things that take money from us, one time or multiple times - housing, energy, automobiles, telephones, loans and so on;
  • Revenue - Positive financial flow;
  • Expenses - Negative financial flow.
Some things do not belong only to one of the two columns and can be an asset or a liability, depending on how we use them. If you chase only external wealth - the shiny car, modern gadgets and luxury properties, and do not care about the asset column, it is likely to be mainly a holder of liabilities and will have to pay for them over time, with a lot of work.

The book offers few tips that may be helpful to reach the desired wealth.
  • Pay yourself first - savings - if at the end of the month you do not set aside even a small amount of money to invest in the future, reaching financial independence is close to impossible.

This is achieved through an analysis of what a person really needs. Food and water are vital expenses, but it is possible to save money from them too. Do you think does your body gets the necessary substances from the food on your plate or it receives mainly calories. You can save by eating out in a restaurant less. Do you really need a car? I personally go on foot for distances under 4 km. Do you really need the latest iPhone or iPad. The the older generations do much of the useful work new devices do, and the difference in the price is 4-5 times.

Once you have set aside a sufficient amount of money the next step is to invest it.
  1. The first and most important thing is to invest in knowledge:
  2. The value of the book Rich Dad Poor Dad is under $ 10, but it provides theoretical knowledge and seeing how the flow of money in the modern world, and if you take the necessary actions, you have the opportunity to become financially independent.
  3. Second type of knowledge is knowledge in a more specialized field - if it is your area, it will raise the quality of your work and your pay accordingly in the future. if the field is other - it will expand your personal horizons and way of thinking.
  4. The other thing in which you can invest is some kind of asset. This can be, a house you will rent, a car that you will use as a taxi, share or stock exchange if you have knowledge of Finance and Trade, if you are a cooker this may be a cooking appliance if you are a programmer - specialized software that can raise your efficiency and save you time and money so on.

The book analyzes the taxes, their occurrence and how they work. If you work as employee, even before the salary has entered into your personal account, the state has taken its taxes. When you run a business and work for yourself, once you get the value of your work, you will have to pay the taxes but you will have the opportunity to do this at the end of the month- after first you have paid to yourself.

The next point is - is there any sense to work for others. And the findings are there - it may be OK if your goal is to learn something that you would like to do in life:
  • If you love to cook, look for a job as a cooker;
  • If you love to help or teach - learn and then work as a doctor or teacher;
  • if you love working with people, find an area in which you can communicate with others, and so on.

The book is concerned with the psychology of man, because it can be both engine and brake. The actions, the motivation, the thoughts, love, fear, ego... All these things are related to each other in a positive or negative direction and the sooner we begin to realize and recognize them in the world and ourselves, so our psychology will become more engine for our personal progress than a brake.

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