WORK TO LEARN — DON’T WORK FOR MONEY – RICH DAD POOR DAD

Posted on August 9, 2020 by Jimit Zaveri under Bibliophile: Rich Dad Poor Dad

When we talk about the mindset of rich and poor people then both have a very reverse mindset. Rich people work for learning and poor work for security. These mindsets help to the rich for becoming richer. And poor to poorer. When we spend time for learning, the time we start creating our fortune.

We all focus on getting specialized knowledge to get promoted at the job. But rich dad suggests learning many in the basic. We should focus on every department and learn about all. When we have at least basic knowledge of every department then we get help while we start any of the ventures.

Rich dad valued learning to lead men out from dangerous situations. “Leadership is what you need to learn next,” he said. “If you’re not a good leader, you’ll get shot in the back, just like they do in business.”

If we are working somewhere then also, we need to focus on learning. Learning only help us to grow well. We try to implement what we have learned and if we got failed before the age of 30s then we have a chance to recover. Fear of failure and rejection stop us from acquiring learning and implementing it. It stops us from thinking about how and from where we get new learning. This mindset turns out to be unsuccessful. Our learning will prove more important in the long run to become richer. If we stop learning then we stop ourselves from growing. Learning can lift us in terms of the wise decision, wise person, better growth potential and become richer.

We need to learn the selling and marketing aspects of the business. If we can sell what we are good then we can earn a good amount of money.

For receiving more money, we need to give money also. It is a law of money, the more we give to the needy, the more we receive. It is also detachment from our wealth. The more we get detached, the more we receive back.

Disclosure – Companies mentioned in the article are just for an example & educational purpose. It is not a buy/sell/ hold recommendation.

Read for more detail: Rich Dad Poor Dad: What the Rich Teach their Kids About Money that the Poor and Middle Class Do Not!

THE RICH INVENT MONEY – RICH DAD POOR DAD

Posted on July 26, 2020 by Jimit Zaveri under Bibliophile: Rich Dad Poor Dad

Often in the real world, it’s not the smart who get ahead, but the bold.

Our financial geniuses require both financial knowledge as well as courage to build wealth. If our fear is so strong then our geniuses also do not work. So that we have to be bold, have to take a calculated risk. We need to convert our fear into power. When our mind is emotionally unstable then we cannot make a wise decision and also, we invite situations which are harmful to us only.

Many of us waiting for the opportunity but we should create an opportunity to get out of the rat race. This thing requires financial intelligence.

We have to understand that money is not real, the important is our mind. If we train it well, then we can defiantly create an enormous fortune.

We can use many available opportunities or can create an opportunity for inventing money. Many of the people save money and invest in the assets from where they get safer interest. But this interest is being taxed. This is a safer option but not a smart option. We have to be financially intelligent to think and make all such wise decisions.

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The problem with “secure” investments is that they are often sanitized, that is, made so safe that the gains are less.

Great opportunities are not seen with our eyes. They are seen with our mind.

Winners do not have a fear of losing in the mind. But losers always have it. This fear stops losers for achieving success.

If we want to become a more professional investor then we need to acquire skills such as –

Find an opportunity which everyone else missed – we have to focus on the opportunities which all others have missed and work on it.
Raise money – we need to identify alternatives for raising money except for bank.
Organize smart people – we need to hire people smarter than us to get advice.

What we know is our greatest wealth and what we do not know is our greatest risk. We need to manage risk, need to learn rather avoid it. More we train our brain; more we acquire knowledge the more we can become opportunistic to acquire more wealth.

Disclosure – Companies mentioned in the article are just for an example & educational purpose. It is not a buy/sell/ hold recommendation.

Read for more detail: Rich Dad Poor Dad: What the Rich Teach their Kids About Money that the Poor and Middle Class Do Not!

MIND YOUR OWN BUSINESS – RICH DAD POOR DAD

Posted on July 12, 2020 by Jimit Zaveri under Bibliophile: Rich Dad Poor Dad

We have seen in the previous chapter that many of us working for the others and lastly that would keep us into the financial struggle. We consider many things as an asset such as a car, wristwatch, expensive products, smartphone etc. But does it have the same value when we going for sold?

Though we are doing a job we need to build an asset which has a real value. This act only can help us to become rich.

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When we earn during our job, we need to focus on buying an asset rather than spending money on luxury items. Rich spend last on luxury items but poor spend it on first. These luxury items will create an impression of a rich person but actually, we stuck into the more debt trapped. We should focus on not to look rich, but to be rich. We need to understand the difference between looking rich and being rich. Looking rich is easy nowadays and anyone can look rich but being rich is difficult. We have to control our emotions, saved ourselves from social traps, not falling into the debt trap, etc. We need to make an arrangement that our assets earn for us and we buy luxury from that income rather buy it on the credit. Credit help us to fulfil our temptation immediately but using that we cannot put our step forward to being rich.

Poor and middle-class people suggest that rich people should get punished through tax but actually, middle-class people get highly punished through taxes. They try to look rich and buy an asset which does not have real value so that they have to pay a tax when they acquire depreciating assets. And rich people buy appreciating assets which don’t have higher taxation compared to depreciating assets and also earn income from it.

Disclosure – Companies mentioned in the article are just for an example & educational purpose. It is not a buy/sell/ hold recommendation.

Read for more detail: Rich Dad Poor Dad: What the Rich Teach their Kids About Money that the Poor and Middle Class Do Not!

WHY TEACH FINANCIAL LITERACY? – RICH DAD POOR DAD

Posted on June 28, 2020 by Jimit Zaveri under Bibliophile: Rich Dad Poor Dad

If we see many of the richest people have failed and died in a poorer life. What happened to them? What can be the true reason?

If we have a Money without proper financial intelligence then it will sooner or later find a way to go away from us. It is not always important to make huge money but important is to learn how to keep money with us. If we make huge money and does not able to keep it with us then that is of no use.

“Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets,” said rich dad.

We must have to understand the difference between assets and liability for getting rich.

What we need to understand for understanding assets and liability are – An asset puts money in my pocket. A liability takes money out of my pocket.

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As our income increases, similarly, our expense increases or might be increased higher than income. This will further increase our liability side such as mortgages, credit cards payments, etc. We go for the shopping, we make shopping with full of credit card, we extend our loan for 30 years to make yearly lower payments. And these all keep pushing us to the rat race. These liabilities make us helpless to continue with the rate race. But when we look for the cash flow pattern of a rich person then the rich person has many assets which help to manage all the expenses and also has multiple income streams. Creating multiple assets only help a person to become a rich person.

A person can be highly educated, professionally successful, and financially illiterate.

We keep on repeating the same mistakes again and again – get a secured job, work hard to get a good paycheck, diversify, our house is an asset, our house is our biggest investment, don’t make a mistake, don’t take a risk etc.

Fear of sports, relationships, getting socialize, career, business, money and all these attract us to play in the safe. We start evolving ourselves, outlook our fear and look inside to find out our wisdom. Our education system is designed in such a way that we get trapped into many of the fears. Schools teach us to study well, get good grades, get a good job. Does it solve our actual problems? When I look back and think then I got an answer that they produce me as a good employee but where are the good money handling skills, skill to engage money to work for myself, skill to become an employer? I have to build all these by myself and if we think calmly then similar has happened with the majority of us.

The mindset of the majority of us in the society is led us towards a safer zone which creates a distance. This mindset creates distance between rich mindset people and poor mindset people, between us and the majority of society. The same I have observed in my life. I always remain a bright student during my studies because I always taught in a way that I have to get a good grade and get a good, secure job. Though many of my family members are engaged in the business. I never have forced to do what everyone else said, I have a freedom of decision but I cannot get escape from the mindset of everyone and engage into the biggest mistake with accepting that common mindset. I have always told to my professor that one day I will become a successful businessman but my mindset was not suitable for that decision. My mindset is of getting safer and secure, fear of losing paycheck due to struggle in past. I experience that struggle with the proper mindset can build us stronger but struggle with a poor mindset builds us weaker. So that as I keep on achieving my different dreams but get distance from original dreams of becoming independent, freedom of time and getting financial freedom. I am telling this from my experience that, it is much difficult for us to change our mindset. It took a tremendous time for me. I suggest it to everyone that we should get out of the trapped from such fears in our early life, else we have to suffer a lot and have to do a tough fight with ourselves to get proper mindset.

I have discussed in the previous chapter that we should use emotion to favour our financial decision. But we get much emotional when it comes to making a financial decision. Especially house, I have a personal experience regarding it. All of my relatives forced to sell off my old house and moved to the bigger house by taking a huge loan for 20 years. In our society, the house is our status symbol, good big house for welcoming society people, proof of getting more wealthier (as we get wealthier, we have to move from old smaller house to new bigger house), proof that we are working with a good paycheck, getting lots of hate & humiliation if not upgrading your house, vehicles, lifestyle with an upgraded paycheck. But no one guides an investment, how to make extra money which can support cash outflows, they advise how to stay with rat race only.

We should buy a house but first, we need to create an asset which supports the cash outflows due to purchase of a new house.

Why rich get richer? The answer is into the above image. Rich having a more asset than liabilities which generates enough cash flow to support all expenses and left with huge for reinvesting it for an asset. This process helps them to grows their assets and income from assets. Such activities led to make them richer.

Opposite activities performed by the poor and middle-class people. And that brings them down more and more. Also, keep them into the rat race. This class only has one source of income and that is salary. So, for increasing their income they have to be strongly performed into the rat race. Poor and middle-class people are taking the major risk by playing safer and not taking a risk.

People attract towards the products which seem to be safer to them. If we want to sell any of the products to the people then show it as a safer product, everyone stands into the queue to purchase it.

Mr Fuller has defined wealth – Wealth is a person’s ability to survive so many numbers of days forward—or, if I stopped working today, how long could I survive?

When we have a lesser expense, lesser liabilities compared to the income and assets then obviously we will survive for a longer period. Else, we will go out of the game soon. Similarly, we can compare with the companies in which we want to invest.

Disclosure – Companies mentioned in the article are just for an example & educational purpose. It is not a buy/sell/ hold recommendation.

Read for more detail: Rich Dad Poor Dad: What the Rich Teach their Kids About Money that the Poor and Middle Class Do Not!