The Right Price

Rich Dad, Poor DadWhat the Rich Teach Their Kids About Money– That the Poor and Middle Class Do Not!-Robert Kiyosaki   Lowest new price:  $6.25 USD Lowest used price: $3.54 USD

Robert Kiyosaki makes the reader want to learn more about their finances.Rich Dad Poor Dad has been around long enough now so that everyone should know the true story of Robert Kiyosaki’s 2 fathers; one rich, one poor and how he developed financial literacy.This book will tell you some things that you don’t want to hear like: 

• a house is not an asset (no cash flow).
• financial literacy is different from educational literacy.  
• your income is not your wealth (it can be lost).  
• investors are different from savers.
• 401 (k) plans are savings plans not investments (no cash flow).

Investors get in and get out and understand the risk. Investors also make money whether the market goes up or goes down.  Savers since March 2000 look at their 401 (k) and mutual fund statements, which they misinterpret as investments and all they see is red.

It is easy to understand why some people fail to understand the concepts taught by Robert Kiyosaki.  ”Assets feed you, liabilities bleed you.”  Too many people have too many liabilities and too few assets.  Unfortunately, many people feel this is normal because everyone else does it as well.

It is cash flow that determines your wealth.  If you spend all you make, then some, you are in a negative cash flow.  You can live in a big house, have 3 cars, a nice job and a big income, but if you are living on 125% of your income, you are a poor person.  

Kiyosaki also enlightens on income vs expense ratio.  The role that taxes plays on slowing wealth accumulation. “It’s not what you make, it’s what you keep.”

Throughout the book, Robert Kiyosaki stresses the importance of ‘income producing assets’. These are assets that give you a passive income over and over again.  The idea is that once your ‘income producing assets’ give you enough residual income to meet your expenses, you become ‘financially free’.

All of our money-related activities are investments we make in our future, whether it be an investment in terms of money or time.  After reading ‘Rich Dad, Poor Dad’ it became quite clear to me that all my money-related activities should be targeted at generating a recurring or residual income.

The idea is to create a passive income, to create ‘assets’ that pay you every month – without you doing any additional work on it.  And once this residual income outgrows your expenses, you become financially free.  That means no chasing somebody else’s dream or lining someone else’s pocket with money.

Rich Dad Poor Dad teaches you to act like, be like and think like a Rich person instead of a poor person.  It makes sense out of concepts like spending less than they earn, saving, and making wise investments.

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