Becoming a rich person is everyone’s dream. But most of them don’t know how to become rich. If you get a job you will buy an iPhone or expensive products or a car or a bike or a house. If the money is not enough then you will go for a bank loan and start paying the monthly installment for some years. Most of them follow the same logic.
Do you think this will leads you to become rich the answer is not at all? It won’t lead you to become rich if you follow these methods you should pay monthly installments for most of your life span because you should have one or other monthly installment at every time.
To avoid these things or to become financially free you need to follow certain methods. These methods will help you to become rich. In this article, we are going to understand the formula of the great book “RICH DAD POOR DAD”.
What is the summary of “RICH DAD POOR DAD?”
“RICH DAD POOR DAD” is a book written by Robert T Kiyosaki in 1997. In this book, he explained the importance of financial education (financial literacy). How you can enjoy financial freedom. Making money from investing in assets, real estate, from starting own business.
There are two fathers in this book one father is highly educated and has a good job and another father is uneducated. A highly educated person is Robert’s father and the other person is his friend Mike’s father. When Robert observed these two people, he noticed that his father is well-educated and has a good job but struggling to live. But his friend’s father doesn’t have a good job not educated but gradually grew and become the richest person in that city
Robert realized that both people have different views on spending and saving cash. Poor dad always said that money is the issue for everything but rich dad says that not having money is the issue for everything, from here itself we can see the different views of the two people
When a poor dad sees a costly product he will say we can’t afford that. But when it comes to rich dad first he will think it’s necessary or not, if it is needed then he will think the way how he can afford that.
Poor dad always says to study well, get admission to a good college, get a good job and settle. But rich dad says that study well and get admission to a good college but you should learn how to manage money and how to give jobs to other people and how to grow independent.
Here Robert follows rich dad’s method. This is one of the reasons for his successful life. Few methods you need to follow to become rich
According to Robert T Kiyosaki Assets are:
- Stocks
- Bonds and debentures
- Real estate
- Royalties from music or patents
How to manage money
It does not matter how much you are getting, the matter is how you are spending that money. Below I have included a chart flow of money in a different classes of people.
There are 4 things that poor people follow
- Arrogance
- Bad habits
- Fear
- Laziness
Conclusion
Rich people always buy assets. Poor people always buy liabilities, and they think those are assets.
The asset is something that gives money into your pocket. Liabilities are something that takes money from your pocket
Stop focusing on your income focus on assets
Don’t diversify with too little money. Focus on a small portion of the income in small investments
Educate yourself in personal finance