Robert
had two fathers one biological father(poor dad) and the father of his friend
mike, the true father who is named poor dad was educator and PhD holder who had
a well-paying job, He was not typically poor but according to his mind set
and financial intelligence he was poor, He
used to encourage his son to go to school, study hard, acquire great marks in
order to be a nice employee who works best company in their city, while rich dad
who had left school at Grade eight encouraged him to study harder In order to
be a business owner who has big company hiring a lot of employees. Both fathers
were inspiring education but they had two distinctive mind sets and opposite attitudes.
The Subject of money is taught at
home not in school
Robert
said having two dads offered me the choice of contrasting point of views, the
reason that rich people get richer and poor people get poorer and the middle
class always struggle in debts are not their school background or grades they
scored, it is how they were taught subject of money at home. parents are fundamental
source to our worldview and way of thinking, my father was highly educated but he
was struggling with bills and trying to save few dollars, he was always
thinking about if he would get salary increase he would do such things, he
taught me how to write an impressive resume to be hired for higher paying companies,
while my rich dad taught me how to write an effective business and financial strategies.
My poor dad believes that studying hard and getting new courses can remedy the poorness and the reason most people are poverty is because of lower education, my poor dad encouraged me to study harder to work for money while the rich dad who is the true father of my friend mike encouraged me to study hard in order to make money work for me, the mantra “Go to school, study hard, and get a good job is the rat race which is The endless routine of working for everyone but yourself.” This means you do all the work, while others – the government, bill collectors and your bosses – take the majority of the reward.” my rich dad had a belief that jobs are short tern solutions for a long term problems, so we should go to work to acquire experience but not our entire life, after few years of experience prepare your own business.
Rich dad used to consult me and mike to have passive income where you own a job that doesn’t require your presence like owning real estates and investments, the problem my poor father didn’t comprehend was that money are not taught in schools because schools only offer scholastic and professional skills ,schools produce well trained employees who can work more than eight hours effectively with no more entrepreneurs and innovation ,a person can be highly educated ,professionally successful but financially illiterate.
The concept of Assets and liability
Rich
dad illustrated the difference between Asset and liability which most people
have misunderstood ,most people think about that their houses are among their
assets while my rich dad had an opposite
idea about assets, he stated that assets are something work for you and
generate income even if you are not working, Assets are what putts money in
your pocket and liability is what takes money out of your pocket including
large house that you bought for personal use which is not putting any money in
your pocket.
My
Poor dad emphasised me to study hard and get more degrees in order to get
higher paying job and that is what poor and middle class believe to work for
money for the rest of their lives, while my rich dad who had no higher degree
but was one of the richest man in Huawei encourages me to learn hard to create
my own business in order to make money work for me, the problem is; poor and
middle class always work for money and they always work hard to make their boss
more richer ,they also pay to the government because they receive disposable
income ,also they pay to the bank
because of mortgages and debts in bank, so they reward themselves last and that
is why employees are always in a rat
race they work harder they are quite happy at the beginning of the
month and screaming at the middle of the month while rich people always own their business and
reward themselves before government and banks
Poor people Rich People
Earn Earn
Pay
tax Spend
Spend pay tax
Robert who is now multimillionaire actually says that my rich dad who gave me these lessons practically was back my current financial success, he said if I would take advices from my poor dad I would now suffer with debts.
The
author suggests these Kind of Assets:
- Business that don’t require my presence
- Stocks
- Bonds
- Income generating real estates
Robert
had also suggests that financial IQ is made up of Knowledge from
- Accounting : Ability to read and understand financial statements which allow you to identify the strengths and weakness of your business
- Investment: the science of money which is learning how money makes money
- Understanding markets: the power of demand and supply and market mechanisms
- The law: knowing tax and financial policies
In
conclusion, the author manifests that generally schools don’t teach financial
literacy, we learn it from our homes that is why rich parents tell their children
differently, The truth is that you
can study hard, get into a good school and graduate into a high-paying job
without ever seeing financial growth, because you’re still stuck in the “rat
race.” Your bosses – not you – are getting rich from all your hard work so
if
you want to reach financial independence you have to change your mind-set and
the concept you have from the subject of money then you have to learn skills required
to navigate and boost your financial intelligence and finally follow principles
and formulas which were intended to let your energy drives to your destination
in the mean of time.
thanks dear readers, this was short brief summary from the book "Rich Dad poor Dad", I am strongly recommending you to read the book completely, because it is opening your financial sight; it is the best personal finance book.
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