I will be doing a series of icon lessons (see others here), highlighting some of the great business and financial leaders of our time. First up on that list is Robert Kiyosaki, and specifically his book Rich Dad, Poor Dad.
Rich Dad, Poor Dad is one of the staple personal finance books, and is a must read for anybody with a middle class mindset. The book was the first to really open my eyes to this world of money that I never knew existed.
Below are 6 key lessons that Robert talks about in the book, and I highlight these lessons in this solo edition of the YoPro Wealth podcast.
1. The Rich Don’t Work for Money
The poor and middle class work for money, while the rich have money work for them.
|Buy things.||Buys liabilities (they think are assets).||Buy assets.|
2. Why Teach Financial Literacy
If you don’t know how to manage what you’ve got, how are you supposed to manage more? Learning the fundamentals and right habits is absolutely critical to eventually building a skyscraper on your foundation.
One of the other great lessons from this section is that it does not matter how much you make; it only matters how much you keep that matters.
3. Mind Your Own Business
You have to take control of your own financial future. Robert argues that you should be more conscious of minding your own business, and not killing yourself for someone else.
You can get rich working for someone else, no doubt, but it takes really building that asset column on the side.
4. The History of Taxes & the Power of Corporations
The wealthy take advantage of loopholes that are offered to them. One of those benefits is the tax advantages that a corporation has.
Individuals pay taxes on what they earn and then live on whatever is left, but corporations are taxed much differently.
Corporations earn money, then pay their expenses… and then pay taxes on whatever is left. So, the amount they pay taxes on is much less than what a comparable individual would pay.
Taxes are the largest expense that any of us will face, so if you want to separate yourself from the pack, take advantage of any tax benefits you can.
5. The Rich Invent Money
What this means to me is that the rich create wealth, as opposed to waiting for it to happen. They build teams of people smarter than them, and create the mindset that moves them toward success. They take calculated risks and aren’t afraid to get outside of their comfort zone.
6. Work to Learn, Don’t Work for Money
To be all that you can be, you must learn the skills that are necessary for success in essentially any business. Robert talks about the essential management skills being those in cash flow, systems and people.
In addition, sales and communication are vital skills that you need to focus on. Regardless, focus on the process and use every role as a stepping stone, learning along the way.
These are essential and foundational money habits that can make you very wealthy. If you haven’t already, read the book… but most importantly take action on what you learn.