Rich Dad, Poor Dad...Book Review

Book Review

1. Rich Dad, Poor Dad.
   Kiyosaki introduces his two dads and their different views about money. The main point I got from this chapter is "Be aware of your thoughts and how you express yourself."
2. Lesson One--The Rich Don't Work For Money.
   What really drives our money attitudes and decisions is EMOTION! The biggies are fear, passion (anger + love), greed or desire.
   A huge part of learning how to handle money is to learn how to handle your emotions, especially fear.
3. Lesson Two--Why Teach Financial Literacy?
   It's not how much money you make...it's how much money you keep.
   Becoming rich requires becoming financially literate
   You have to see the diagrams designed by Rich Dad...brilliantly simple! You must learn the difference between an asset and a liability. You also need to be able to read & comprehend numbers.
   Important point: Understand the cash flow pattern in your head to understand where your riches go.
4. Lesson Three--Mind Your Own Business
   This translates to "mind your asset column".
   Whether you work at a job or are self employed--whether you work as a hotel maid, a garbage collector, a teacher, a dentist, a lawyer, an accountant, a butcher, a baker, a candlestick maker--your asset column is how you make your money your employee.
5. Lesson Four--The History of Taxes and the Power of Corporations
   He uses The Robin Hood Mentality to describe the difference in how the Rich pay taxes and how the Poor & Middle class pay taxes.
   He explains how the Rich use Corporations to protect their assets from the government.
   He gives a simple list of what financial IQ is and tells exactly what areas of finance you need to study.
6. Lesson Five--The Rich Invent Money
   Chapter Six is a big one for me...I took a page & a half of notes!
   What holds us back from becoming Rich is self-doubt. Page 110 is a must read about how fear affects our ability to succeed.
   Why a person needs a high financial IQ is that the financial world is constantly changing. You have to be able to be creative, to recognize oportunities when most others don't, and to create financial solutions. Waiting for the "right" opportunity can leave you sitting on the street corner the rest of your life.
   The more financially sophisticated you get, the more opportunities will come your way.
   In closing, he says to always remember to have fun...it's just a game.
   Sometimes you win, sometimes you LEARN.
   Most of us are so afraid of losing we don't act.
   We need to approach our finances the way we approach learning how to ride a bike...when you fall down, you keep getting up until you master it.
   Failure is part of getting Rich.
   There is always risk, so you need to learn how to manage risk instead of avoid it.
7. Lesson Six--Work To Learn--Don't Work For Money
   This statement goes against what most of us are taught that you must go to work for money, benefits, raises, retirement, more money, etc.
   Most people are one skill away from great wealth.
   So when we work to learn, we need to focus on taking wealth building skills away from our jobs and employers.
   Focus on learning how to manage cash flow, systems (including yourself and time with your family), and people.
   Get good at communicating, negotiating, and handling the fear of rejection.
   The last important point he makes is to live by the creedo "Give and you shall receive" not "Receive and then you give."
   You don't have to give with money. You can give back of your time, mentoring, and teaching.
8. Overcoming Obstacles
   In the last part of the book, Beginnings, Kiyosaki lists and explains five reasons why we fail to build an asset column:
   1. Fear (of losing money, of taking risks). Fear is not the real problem. It is how you handle fear and how you handle losing.
   2. Cynicism. Everyone gets like "Chicken Little" when faced with fear..."the sky is falling!" This is just noise. Everyone hears it. We have to learn to tune it out.
   3. Laziness. Busy people are the most lazy...it's a way of avoiding something they do not want to face. The cure is a little greed.
   4. Bad Habits. Habits control behavior. Rich people pay themselves first (their asset column) then pay their bills.
   If they're coming up short on money they are more motivated to figure out ways to make the extra money.
   5. Arrogance. Ego + Ignorance. Causes us not to learn about what we don't know. What we don't know about money costs us money (we lose).
9. Getting Started
   Creating wealth is easy. It's like learning how to walk. A baby wobbles and totters and falls. But sure enough, that baby keeps getting up until she gets walking down to an art. It's easy...and then she starts running and climbing.
   Why does a baby try to sit up, crawl, walk and run? She sees everyone else doing it & she wants to do it too.
   When learning to create wealth, you need determination...just like that baby learning to walk...to get you through the wobbly stage.
   Make a habit of watching successful people and use your determination to do what they are doing.
   Everyone has a financial genius.
   You have to get over the belief of "Money is the root of all evil."
10. Still Want More?
    For those of us who insist on having a specific to do list:
    * stop doing what you're doing
    * look for new ideas
    * take action
    * know what you're looking for and go look for it
    * ACTION ALWAYS BEATS INACTION