Robert Kiyosaki Toru is an American investor and businessman. He is a human development author, motivational speaker, and financial commentator. The article is compiled from the book "Rich Dad Poor Dad", in which Robert Kiyosaki Toru shares ideas and lessons from rich people.
Robert Kiyosaki Toru has two fathers. One biological father and one adoptive father. His adoptive father was the father of Mike, a close friend of his.
Both fathers are successful in their respective fields. They have strong personalities and affect others. But both are completely different about what money is involved.
While the biological father believes that “the love of money is the source of evil things” and does not care about money, the adoptive father thinks that “lack of money is the source of bad things” and thinks that Money is power.
His biological father's main source of income is work. After paying taxes and paying bills on time, he was saving to accumulate.
The adoptive father makes a lot of money from his investments and always pays the bills last.
His biological father's mantra was "I can't afford this", while rich dad asked himself, "How can I afford this?"
The biological father - who is a good student and has a doctorate - always advises the author to try to study well, get a law degree, accounting or a master's in business administration to be able to get a good, high-paying job.
The adoptive father – who hasn't finished 8th grade yet – encourages the author to learn to be financially smarter, to know how money works, to know how to make money work for you, and to become rich.
The author calls the biological father the poor father, the adoptive father the rich father.
At the age of 9, the author decided to learn about money, learning ways to get rich from a rich dad. And here are the lessons he learned from the process: That is also the business lesson that GenZ should learn.
Rich people don't work for money, they make money work for them
Rich dad taught the author a lesson about the poor and money. Poor people work all their lives for money without knowing what they are working for. And when the poor make more money, they have more debt.
The poor are controlled by two emotions, fear, and longing. The fear of not having money forces them to work and when they get paid they want what they can buy, and then their life is "trapped" into a vicious circle: push, go to work, pay the bills, then get up, go to work and pay the bills. Thus the vicious circle binds the time and mind of the poor.
In contrast, the rich do not work for money but make money work for them.
A valuable lesson the author learned from rich dad: always think and observe to find money-making opportunities that are always present around us. However, many poor people do not see these opportunities because they are busy and interested in making money, and job security.
Why do rich people have to learn about finance?
To get rich, we must learn about finance to have the financial knowledge and know-how to take care of and grow our money tree.
Many practical lessons show us that how much money we make is not as important as how much money we keep and make it proliferate.
The first rule of rich people's finances is to buy assets, not liabilities. Assets are defined by rich dad as things that make money for him. Liabilities are things that take your money.
For example, if a house is purchased for a rental business, it is an asset. If the same house is bought to live in, it is a liability, because the buyer has to pay the first time, and pay many installments later.
The costs of living, plus the debt generated by liabilities, put a real burden on middle-class people. As wages rise, so doof their costs and liabilities. They fall into a vicious cycle: going to work, getting a salary, and paying off debt.
During their working life, middle-class people not only support themselves and their families, but are also "backward" to fulfill their tax obligations for the state, feed the bank through profits, and enrich the rich.
The rich have almost no salary income. Instead, they have a source of income from the assets they have invested in: profits from the business, rentals, dividends, dividends, interest from the resale of the property.
The sum of these earnings is much higher than their expenses. The difference they invested in assets, the assets they just invested in continued to generate money for them, and so on, their assets multiplied.
Rich people only buy liabilities, the last “luxury” items when their cash flow has grown. When they feel they are rich enough and have the right to enjoy. However, the amount of money they spend to buy liabilities – the rewards for achievements – is a very small part of the money they invest in the asset.
Rich people care about their businesses
Many people confuse a professional career with a business.
Ray Kroc - the owner of the McDonald's restaurant chain - made a very clear distinction: selling hamburger franchises is just his specialty, and his business is real estate. He launched promotional strategies, discount codes, coupons to attract customers to McDonald's, most of which he chooses to open is "perfect" locations and have prices that increase over time.
The poor and middle class are doing professional work, not doing business. They are specialized in the business of the owner and contribute to the richness of the owner.
Rich dad's third lesson: Rich people have to mind their businesses. That is to build and always keep the asset column solid. Any dollar put into the property must become an employee working for the rich.
Assets that rich dad and other rich people often own: businesses that can be managed by someone else to make a profit without rich dad being present (if management is necessary, the business becomes success), stocks, bonds, fund certificates, income-generating real estate, anything that has value, can appreciate, and is already on the market.
Rich people are smart financially and start their businesses
Rich people do not need to be highly educated, but need to be financially intelligent, understanding the following 4 areas:
+ Knowledge of accounting and finance. It is the ability to read and understand financial statements. This ability helps the rich to recognize the strengths and weaknesses of any company after reading its financial statements.
Mastering investment strategies. It is the ability to choose profitable assets, to make wise investment decisions.
+ Understand the market, about marketing. The rich know the laws of supply and demand to identify business opportunities. Rich people need to master skills in marketing and sales. For example, Amazon corporation, thanks to effective marketing strategies such as launching discount codes, coupons, sale-off, has attracted a lot of customers to buy.
+ Knowledge of the law. Rich people start companies to gain tax advantages and protect their assets. The poor and middle-class earn money, pay taxes, and then use the money. Rich people – owning companies – make money, use it, and then pay taxes.
Above are the lessons learned from the book Rich Dad, Poor Dad By Robert Kiyosaki. GenZ should read carefully and study to gain business insights as well as future development.