Rich Dad, Poor Dad: 7 Things You Should Know!

• Wealthy people don't have to work hard to get their money. They make it happen by spending the money.
• Financial literacy is a valuable skill
• Taking control over your affairs also known as "Minding Your Own Business"
• Corporations and Taxes
• The wealthy create wealth.
• Don't work for money
• Poor dad, rich dad

Many people mistakenly believe that the title of this chapter implies that only wealthy people work.

Actually, the reverse is true.

Kiyosaki meant that the chapter title "The Rich Don't Work to Make Money" was not what it seemed. "

It is worth noting that this section emphasizes the word "money", in a completely different way.

It's a known fact that wealthy people work harder than the majority of people.

People who are rich and want to become wealthy work hard and discover every day how money works for them.

Rich Dad once said that the middle and poor work for their money. "The wealthy have the money to work for their advantage.

Kiyosaki noted that a job does not solve the long-term problem (or challenge) of creating wealth or financial freedom.

Rich Dad, Poor Dad Chapter 2 illustrates how assets and liabilities are distinguished.

Chapter 2 will show you how much money you're losing and how much you have left.

Assets are assets that have a value that generates income or appreciates. They can easily be bought and sold in an established market.

• Assets generate Income
• Assets appreciated

Liabilities may also drain your bank accounts as you must pay the associated costs.

This phrase was controversial when it was first introduced by Rich Dad Poor Dad in 1997.

A residential home is not an asset until its value increases enough to cover the ownership costs.

A good investment is renting property. It can provide enough passive income to cover operating and financing costs.

This chapter focuses on two major points.

• Pay your financial obligations (aka debts) and then invest in income-worthy assets immediately.
• Maintain financial strength by investing as much of your money in assets

Kiyosaki explained that many people mistake their occupation for business.

They work all their life for another company and make more.

Many people realize this only after it is too late. It can be hard to change your mindset.

I love this quote:

"The main reason the majority of middle- and poor people are financially conservative is that they don't have a solid financial foundation. "

Rich Dad Poor Dad is an inspirational book. This is Kiyosaki’s main intention. He doesn't offer financial advice.

Kiyosaki, a former employee, recalls how he purchased a Porsche with pre-tax dollars. He considered it a business expense.

An IRS audit might be required if an investor purchases a high-end luxury automobile.

However, the arguments in this chapter are not about Porsche. These chapters are about how to play the game well.

The wealthy understands the power and importance of tax codes and company structure and use every legal avenue to reduce their tax burden.

Compare tax payments made by corporations and investors (e.g. C Corps or S Corps), to those of the majority.

Corporate-structured business owners:

1. Earn
2. Spend
3. Pay taxes

Employers:

1. Earn
2. Pay taxes
3. Spend

It's important to remember that employees for other companies spend after taxes while owners spend and make before taxes are paid.

According to Kiyosaki, Chapter 4 consists of four components. These are accounting, investment strategy, and market law.

Rich Dad Poor Dad teaches that tax and legal benefits are an important part of establishing long-term wealth.

A corporation might pay expenses before it pays taxes. An employee, however, is subject to tax first and must then pay any remaining expenses. The wealthy person often discovers that they don't have any ownership in their name.

Inventing money is about creating new ways and transactions that other people are not able to.

Chapter 5 - Rich Dad, Poor Dad identifies two types of investors

1. People who can allow developers and fund managers to manage money can buy investment packages. This is the most common method of purchasing ETF shares or investing in crowdfunding companies to purchase the property.
2. Professional investors manage their investments and search for deals on the market. They also employ specialists to monitor their investments daily.

• Recognizing the potential that others have overlooked
• Raising investment funding
• Collaboration with intelligent people

This is The closing statement of this chapter that will be remembered the most:

Many people think that real estate deals don't exist where they are. However, there are plenty of prime opportunities that go unnoticed. "Most people don't have financial skills to see the potential. "

The father of was bright and well-educated. He wanted to be able to work for his family's security.

The Rich Dad is exactly the opposite. He made a fortune by learning.

Kiyosaki's words:

It is important that young people look for work that will give them the skills they need to succeed in life.

Kiyosaki actually did that. Kiyosaki joined the Marines after completing his undergraduate degree to learn the business skills necessary for leadership management.

His fear of rejection did not stop him from serving his Marines. He applied for Xerox and was one of the top five salespeople in the company. Then he left to start his business.

Rich Dad's Chapter 6 Poor Dad outlines the combination of managerial skills required for company success.

• Cash flow management
• System management
• People management

The poor dad starts by emphasizing that fear management is what makes the difference between rich and poor people.

This is the fifth major obstacle to financial independence.

• Fear
• Cynicism
• Laziness
• Bad habits
• Arrogance

Many people struggle to create large cash flows despite being financially educated.

They were too far away.