{"id":449,"date":"2019-03-04T15:01:50","date_gmt":"2019-03-04T15:01:50","guid":{"rendered":"http:\/\/www.greatideasgreatlife.com\/?p=449"},"modified":"2019-07-02T04:12:27","modified_gmt":"2019-07-02T04:12:27","slug":"rich-dad-poor-dad","status":"publish","type":"post","link":"https:\/\/www.greatideasgreatlife.com\/blog\/rich-dad-poor-dad\/","title":{"rendered":"Rich Dad Poor Dad by Robert Kiyosaki"},"content":{"rendered":"\n<p>Robert Kiyosaki,\nthe author of this book, had two fathers, a well-educated father who had a\nPh.D. yet died broke, he called him poor dad, the other one was not that\nwell-educated but was rich, he called him rich dad, one might wonder, how can\nsomeone have two fathers at the same time, that&#8217;s a small part of what we&#8217;re\ngoing to learn when we proceed in this book, Robert started the dream of being\nrich when he was young, his poor dad always wanted him to study better and have\na safe job at a large company, his other dad, the rich dad, his friend&#8217;s\n-Mike&#8217;s- father, wanted him to take risks, to learn that not all lessons are\ntaught in school, that some lessons have to be taught by actually passing\nthrough them, these kinds of lessons won&#8217;t be acquired by simply going to\nschool and getting good grades, sure it&#8217;s important to have a good education\nbut life is not just about that.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>The rich don\u2019t work for money.<\/strong><\/h2>\n\n\n\n<p>There&#8217;s this old\nstory about a man who owned a donkey, whenever he wanted the donkey to work\nharder, he&#8217;d just put a carrot in front of the donkey&#8217;s eyes, so the donkey got\nmotivated by the carrot, it kept walking and walking hoping to reach that\ncarrot one day, this was good for the man but not that good for the donkey,\nsee? The carrot here is an illusion, just like money, people keep working and\nworking hoping that someday they would become rich, but money here is an\nillusion, you&#8217;ll never reach it if you&#8217;re working only to take that carrot,\ninstead, make the money work for you.<\/p>\n\n\n\n<p>When you first\nstart your journey of making money, don&#8217;t work to gain money, fear and desire\nalways control how we act, first, our fear of not having enough money makes us\nwork harder each day, then our desire takes control and makes us imagine all\nthe beautiful things money can do, our fear and desire put us in a never-ending\ncycle of wanting more, so we work harder to make more money and as a result, we\nspend more, this what rich dad called the Rat Race, instead, avoid that trap,\navoid the trap of fear and desire because that&#8217;s how most people who want to be\nrich fail, you have to make money work for you, when you get a job, don&#8217;t just\ngo there to take your paycheck at the end of the month, barely pay your bills\nand then repeat the cycle all over again, or even work harder at another job,\nstill working only for money, that way you&#8217;re never going to be rich.<\/p>\n\n\n\n<p>Confront\nyourself, tell the truth, you don&#8217;t have to say it to other people, just say it\nbetween you and yourself, are you just looking for security at a safe job? Are\nyou just working to make more money because you think that this is going to\nmake you rich or that this will satisfy you? If the answer is yes then let me\ntell you that unfortunately that way you&#8217;re never going to make it, you&#8217;ll die\nbroke, if your answer is no then this is the first step, never let your fear of\nnot having enough money or the desire to make more make you react without\nthinking, that&#8217;s a big step on the stairway to failure, sure we all have our\ndesires and our fears, but never make them control you and lead you to act\nirrationally, instead, think well, think and put your mind first before your\nemotions.<\/p>\n\n\n\n<p>We have business\nschools, but they do not teach us how to lead a business or start one, all they\nteach us is how to be bean-counters, how to fire people and give orders, they\nhardly ever teach you how to be a leader, that&#8217;s why doctors raise their\nprices, and when they do, people can&#8217;t afford it, and as a result, lawyers\nraise their prices, and the cycle keeps moving until everyone has raised their\nprices leading us to a society full of poverty and sickness which will finally\nlead to chaos.<\/p>\n\n\n\n<p>Every day when\nyou wake up ask yourself if are you doing all you can, if this is your fullest\npotential, don&#8217;t be like normal people who just go day by day thinking about\nmoney and how to work more to get a better raise, don&#8217;t go around thinking\n&#8220;My boss doesn&#8217;t pay me enough, I deserve a raise, I deserve to earn more\nmoney&#8221;, when you stop blaming other people for your problems, don&#8217;t blame\nyour boss for not giving you a raise, don&#8217;t blame the taxes, when you accept\nthat the problem lies within your way of thinking, then and only then, you&#8217;ll\nbe able to solve it, that was the first lesson that rich dad has taught Robert.<\/p>\n\n\n\n<p>A part of that\nlesson was that the rich dad made them work at a convenience store for free,\nthey kept working, not thinking about money, in their working hours they had a\nfree mind and enough time to get new ideas on how to make money work for them,\nthe convenience store, they saw the store clerk cutting the front page of comic\nbooks in two halves, she kept one half and threw the rest of it away, then a\ndistributor comes at the end of the day to take the top half of the book for\ncredit and give new comics to the store, so they waited for the distributor and\nwhen he arrived, they asked him if they could keep the old comic books and he\nagreed, only if they agree not to sell them, so, they started a business where\nthey allowed kids from different places to read old comic books, 10 cents per\nbook for two hours and then return it after that, so technically they&#8217;re not\nselling them, they didn&#8217;t even have to work at the garage where they rented the\ncomics, they hired Mike&#8217;s sister and payed her just one dollar a week, , they\nmade 9.5 dollars a week, they finally learned how to make money work for them,\nnot the other way around.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p><strong>There is only one rule to become truly rich and that is you MUST Learn the difference between liabilities and assets, and buy assets<\/strong>.<\/p><\/blockquote>\n\n\n\n<figure class=\"wp-block-embed-youtube wp-block-embed is-type-video is-provider-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<iframe title=\"The Book That Changed My Financial Life\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/dQnZO8-s8T0?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">The Only Rule Of Rich!!<\/h2>\n\n\n\n<p>This may sound\nso simple, but it&#8217;s the only rule that you need to become rich, the poor and\nthe middle class buy liabilities that they think are assets, the rich buy\nassets.<\/p>\n\n\n\n<p>Rich dad\nbelieved in the KISS principle, Keep It Simple, Stupid, so he kept it simple\nfor our author and his friend, Mike, that&#8217;s what made them build a strong\nfoundation, the simplicity of the teaching, there&#8217;s a reason why not everyone\nis rich, if it&#8217;s that simple then everyone would have been rich, right? No,\nit&#8217;s the total opposite of that, it&#8217;s simplicity is actually the reason why no\none thinks of it, people think they know the difference between them but they\nonly care about &#8220;literacy&#8221; and not &#8220;financial literacy&#8221;.<\/p>\n\n\n\n<p>These are the\nsimple drawings that rich dad used to explain the difference between assets and\nliabilities.<\/p>\n\n\n\n<p><strong>The cash-flow\npattern of assets is as follows:<\/strong><\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"alignright\"><img fetchpriority=\"high\" decoding=\"async\" width=\"332\" height=\"400\" src=\"http:\/\/www.greatideasgreatlife.com\/wp-content\/uploads\/2019\/03\/cashflow-pattern-of-assets.png\" alt=\"\" class=\"wp-image-451\" srcset=\"https:\/\/www.greatideasgreatlife.com\/blog\/wp-content\/uploads\/2019\/03\/cashflow-pattern-of-assets.png 332w, https:\/\/www.greatideasgreatlife.com\/blog\/wp-content\/uploads\/2019\/03\/cashflow-pattern-of-assets-249x300.png 249w, https:\/\/www.greatideasgreatlife.com\/blog\/wp-content\/uploads\/2019\/03\/cashflow-pattern-of-assets-224x270.png 224w, https:\/\/www.greatideasgreatlife.com\/blog\/wp-content\/uploads\/2019\/03\/cashflow-pattern-of-assets-20x24.png 20w, https:\/\/www.greatideasgreatlife.com\/blog\/wp-content\/uploads\/2019\/03\/cashflow-pattern-of-assets-30x36.png 30w, https:\/\/www.greatideasgreatlife.com\/blog\/wp-content\/uploads\/2019\/03\/cashflow-pattern-of-assets-40x48.png 40w\" sizes=\"(max-width: 332px) 100vw, 332px\" \/><figcaption>Cashflow pattern of assets<\/figcaption><\/figure><\/div>\n\n\n\n<p>The income\nstatement is sometimes known as &#8220;profit and loss statement&#8221;, it\nsimply measures money in and money out.<\/p>\n\n\n\n<p>The balance\nsheet balances the assets against liabilities, most educated accountants do not\nknow how to relate between the income statements and the balance sheet.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>The cash flow of a liability on the other hand is as follows:<\/strong><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"alignright\"><img decoding=\"async\" width=\"324\" height=\"414\" src=\"http:\/\/www.greatideasgreatlife.com\/wp-content\/uploads\/2019\/03\/liability.png\" alt=\"\" class=\"wp-image-452\" srcset=\"https:\/\/www.greatideasgreatlife.com\/blog\/wp-content\/uploads\/2019\/03\/liability.png 324w, https:\/\/www.greatideasgreatlife.com\/blog\/wp-content\/uploads\/2019\/03\/liability-235x300.png 235w, https:\/\/www.greatideasgreatlife.com\/blog\/wp-content\/uploads\/2019\/03\/liability-211x270.png 211w, https:\/\/www.greatideasgreatlife.com\/blog\/wp-content\/uploads\/2019\/03\/liability-19x24.png 19w, https:\/\/www.greatideasgreatlife.com\/blog\/wp-content\/uploads\/2019\/03\/liability-28x36.png 28w, https:\/\/www.greatideasgreatlife.com\/blog\/wp-content\/uploads\/2019\/03\/liability-38x48.png 38w\" sizes=\"(max-width: 324px) 100vw, 324px\" \/><figcaption>Cashflow of liability<\/figcaption><\/figure><\/div>\n\n\n\n<p>Now that the\ndrawings made it easy for people to understand, it&#8217;s now easy to put them in\nwords, assets are things that puts money in your pockets without even having to\nwork on it, like if you buy a house and rent it for others, then that rent\ncould pay for the house loan and still put money in your pocket, while\nliabilities are things that take money out of them, for example, buying a house\nand living in it without renting it, that way you&#8217;re only spending money\nwithout gaining any, to be rich, simply buy assets, to be poor, buy\nliabilities.<\/p>\n\n\n\n<p>The rich people\nhave more money because they understand this principle correctly, the poor have\nless money because there is something in that principle that they don&#8217;t quite\nunderstand, that&#8217;s why it&#8217;s so important to be financially literate, not just\nliterate.<\/p>\n\n\n\n<p>Numbers alone do\nnot mean anything, the story is what makes the difference, in most families who\nwork hard, their cash flow pattern shows their hard work but it&#8217;s mostly for\nnothing since most of it is spent of liabilities rather than assets.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>This is a cash\nflow of middle-class:<\/strong><\/h2>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"alignright\"><img decoding=\"async\" width=\"332\" height=\"450\" src=\"http:\/\/www.greatideasgreatlife.com\/wp-content\/uploads\/2019\/03\/middle-class.png\" alt=\"\" class=\"wp-image-450\" srcset=\"https:\/\/www.greatideasgreatlife.com\/blog\/wp-content\/uploads\/2019\/03\/middle-class.png 332w, https:\/\/www.greatideasgreatlife.com\/blog\/wp-content\/uploads\/2019\/03\/middle-class-221x300.png 221w, https:\/\/www.greatideasgreatlife.com\/blog\/wp-content\/uploads\/2019\/03\/middle-class-199x270.png 199w, https:\/\/www.greatideasgreatlife.com\/blog\/wp-content\/uploads\/2019\/03\/middle-class-18x24.png 18w, https:\/\/www.greatideasgreatlife.com\/blog\/wp-content\/uploads\/2019\/03\/middle-class-27x36.png 27w, https:\/\/www.greatideasgreatlife.com\/blog\/wp-content\/uploads\/2019\/03\/middle-class-35x48.png 35w\" sizes=\"(max-width: 332px) 100vw, 332px\" \/><figcaption>How Middle Class Spend their Money<\/figcaption><\/figure><\/div>\n\n\n\n<p>That&#8217;s how the\nmiddle-class spend their money, and if they continue to do so, they&#8217;ll forever\nstay middle-class or even get poor, because they&#8217;re spending their money on\nliabilities, as mortgage, car loans, house loans &amp; credit card fees, that&#8217;s\nwhy most of their money is wasted.<\/p>\n\n\n\n<p>Poor people, on\nthe other hand, do not buy liabilities, but they don&#8217;t buy assets also, they\nonly earn money from their income being their salary and they spend it on daily\nlife expenses, as an example, a man in the poor class, makes a thousand dollars\nout of his work, he pays 300 dollars for his small house rent, 200 dollars for\ntransportation, 200 dollars as taxes, and 200 dollars for food and clothes,\nthey are left with nothing, and even sometimes they may have to borrow extra\nmoney making them even poorer.<\/p>\n\n\n\n<p>The rich,\nhowever, buy assets, not liabilities, their assets work for them and generate\nmoney without even having to work on them, as an example, the rich buy a house\non loan and then rent it for other people, say they pay 1 dollar for the loan\ninstallment per month, so they rent it for two dollars, that way when they get\nthe money from the rent, they can pay the 1 dollar for the loan installment and\nstill make a profit of another one dollar, without having to move a single\nfinger, their assets work for them.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>So, the real difference between poor dad and rich dad is their mentality, it&#8217;s how they decide to handle their money, nothing more.<\/p><\/blockquote>\n\n\n\n<p>Back in the\n1960s, when you asked kids what they wanted to be, all would answer that they\nwanted to be doctors or to have good grades, everyone thought that getting good\ngrades necessarily means that this person is going to make a lot of money,\nhowever, when you look at these kids after they grew up and became doctors,\nmost probably you&#8217;ll see them struggling financially, because they&#8217;ve always\nthought that more money could solve their problems, today, kids want to be\nfamous athletes, CEOs, movie stars or rock stars, they now know that academic\nsuccess and getting good grades is not the only thing that can make them\nsuccessful, career-wise.<\/p>\n\n\n\n<p>The financial\nnightmare is now common, newly married happy couples who start their life in a\nsmall home, thinking that because they got married now their salaries are\njoined together and doubled by two, so they decide to save to buy a bigger\nhouse, so they focus more on their careers and their incomes begins to\nincrease, and as a result, their expenses go up as well, when you make more\nmoney without being financially literate or without knowing how to use them,\nyou spend more, it&#8217;s a cycle that never ends, the new couple now saved enough\nmoney to buy a new house, thinking that they&#8217;re somehow getting richer, but the\ntruth is, they now added more liabilities to their cash-flow, property tax, and\nthen they go and buy a new care, new furniture, new everything, their\nliabilities are growing and growing, so as income increases, expenses increase,\nand liabilities increase too, they suddenly wake up and find themselves trapped\nin the Rat race, they keep repeating it all over again.<\/p>\n\n\n\n<p>They always come\nto Robert, our author, asking him how to make more money, the problem is that\nthey think that more money will solve the problem which is completely wrong,\nthe problem is not that the money is not enough, the problem is that they can&#8217;t\nhandle what they already have, there&#8217;s a saying that perfectly describes this\nsituation, it goes like, &#8220;when you find yourself in a deep hole, stop\ndigging.&#8221;<\/p>\n\n\n\n<p>Why do most\npeople fear public speaking? According to psychiatrists, people fear public\nspeaking because they&#8217;re afraid of rejection, afraid to be different, to be\njudged and to be an outcast, that&#8217;s the exact same reason why most people\ndecide to do what everyone does, to go with the crowd, &#8220;your house is your\nbiggest asset&#8221;, &#8220;take that loan&#8221;, &#8220;that&#8217;s a\npromotion&#8221;, &#8220;buy a new house when you get a raise&#8221;, we often\nhear people say those stuff, and we believe them, it must be right because\neveryone is doing them right? Well, no, rich dad said that the Japanese were\naware of three powers, the sword, the jewel and the mirror, the sword resembles\nthe power strength, the jewel resembling the power of money which is a strong\none and the mirror resembling the power of self-knowledge, and that&#8217;s the\ngreatest power of them all, when you have the power of self-knowledge, when\nyou&#8217;re able to look yourself in the mirror and ask yourself if what you&#8217;re\ndoing is the right thing to do, if you should follow the crowd, this is the\ngreatest power you can ever have.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>The poor and the middle-class leave themselves to be controlled by the power of money, that&#8217;s why they don&#8217;t become rich.<\/p><\/blockquote>\n\n\n\n<p>At the age of\n16, Robert and Mike used to spend hours with his rich dad at meetings that he\nheld with accountants, managers, investors and employees, here he was, rich\ndad, the uneducated man who left school when he was 13 years old, conducting a\nmeeting and ordering other educated people and teaching them about business\nstuff, a man who did not go with the crowd, who took risks and didn&#8217;t fear\nbeing judged and considered an outcast, as a result of attending those\nmeetings, our author and his friend couldn&#8217;t bear school, whenever teachers\nordered them to follow a set of rules and never deviate from them, they saw how\nschool discouraged creativity, how they were molding student into a certain shape\nthat&#8217;s acceptable by society, when the teachers said that being successful and\nrich is dependent on getting good grades, they disapproved, one day, Robert had\nan argument with his poor dad when his poor dad told him that he considered his\nhouse the best investment, he was caught in the Rat race, his income matched\nhis expenses never giving him a break, Robert tried to explain to him that the\nhouse was a liability and not an asset, explaining to him how the house is just\ntaking money out of his pocket, that was the difference between poor dad and\nrich dad, rich dad considered the house as a liability, while poor dad thought\nof it as an asset.<\/p>\n\n\n\n<p>The argument\nwent over to explain to his poor dad that most people work hard to pay for a\nhouse that they will never own, because they take a 30-year loan to pay for the\nhouse but they never stay in it, they just move into a bigger house renewing\nthat 30-year loan, also, houses do not necessarily go up in price, there are\nsome people that owe a huge amount of money for a house that&#8217;s now worth much\nless, the biggest loss that people suffer from is not being able to take other\nopportunities for other investments, because all their money is tied to that\nhouse, they never get to learn about investment, they lose precious time that\ncould have been used to buy assets, if people would just start buying assets\nearly in their life, their future life would be so much easier on them.<\/p>\n\n\n\n<p>As an example,\nRobert&#8217;s wife&#8217;s parents moved into a bigger house and thought it was good and\nrefreshing to own a new house, thinking it&#8217;s an asset, however, they were\nsurprised when they learned that the property taxes went as high as 1000\ndollars, they were also retired which put a huge strain on their retirement\nbudget.<\/p>\n\n\n\n<p>Of course, this\nis not an encouragement to not buy a house, but instead, when you want to move\nto a bigger house, buy an asset instead of buying that house, make that asset\nwork for you generating enough money to be able to pay for that house.\n\nThere&#8217;s a reason why the rich get richer and why\nthe middle class continues to struggle, the rich buy assets that generate more\nthan enough money to pay for the expenses, then the rest of that money are\ninvested again on assets generating more money, while the middle class rely\nmainly on their salary which pays for their expenses, and as their salary gets\nbigger, they get bigger taxes and their expenses grow too, forever stuck in the\nRat race.\n\n\n\n<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Robert Kiyosaki, the author of this book, had two fathers, a well-educated father who had a Ph.D. yet died broke, he called him poor dad, the other one was not that well-educated but was rich, he called him rich dad, one might wonder, how can someone have two fathers at the same time, that&#8217;s a small part of what we&#8217;re going to learn when we proceed in this book, Robert started the dream of being rich when he was young,&#8230;<\/p>\n<p class=\"read-more\"><a class=\"btn btn-default\" href=\"https:\/\/www.greatideasgreatlife.com\/blog\/rich-dad-poor-dad\/\"> Read More<span class=\"screen-reader-text\">  Read More<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":453,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[12],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Rich Dad Poor Dad by Robert Kiyosaki - GIGL<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.greatideasgreatlife.com\/blog\/rich-dad-poor-dad\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Rich Dad Poor Dad by Robert Kiyosaki - GIGL\" 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