You probably heard of Robert Kiyosaki, best-selling book Rich Dad, Poor Dad.Kiyosaki grew up with two father figures: “poor dad” his real father who died with bills to pay and “rich dad,” who started with little before becoming one of the richest men in Hawaii. Both of his “dads” were successful. His poor dad worked for the government and was highly paid each month while his rich dad, who dropped out of school at 13, became the richest man in Hawaii. While both dads presented characteristics that should guarantee a successful life, there was a major difference: Their way of thinking.
His poor dad, even though was gaining a significant amount of money, did not have the mindset that would guarantee him long term success. To make it short, he worked for money and did not allow money to work for him! While his poor dad, had the mentality that, true success was measured by the position/job you had and the amount of money on your paycheck. He also believed that money was “not important” and that working hard to make a living was where true value really resided.
Robert Kiyosaki is now a successful business owner and author who strives to share his experience with the world.
What are the main lessons we can learn from this book? And how can you, as an entrepreneur can apply it to your daily life?
It is not how much money you make but how much money you keep
Oftentimes, we focus on the wrong things. Yes, it is very nice to see multiple digits on your bank statement but how well do you manage this money? Robert Kiyosaki tries to make us understand that true wealth is not about the amount of money that comes in your pocket but about the amount that is left after your expenses. If your cash-flow only goes downhill after your paycheck comes on, then it is a sign you need to rethink the way you manage your money.
Related: 5 reasons you are still poor in 2017
Debt is not always our enemy
In this day and age, getting out of debt seems like it should be our main focus. However, it is important to know that there is bad debt and healthy debt. One of the best ways to truly identify the nature of your debt is to know your debt-to-income ratio. The debt-to-income ratio is calculated by dividing your monthly debt (loans, credit cards etc.…) by your gross monthly income (the amount you earn each month before taxes and other deductions are taken out).
The lower your debt to income ratio, the healthier your debt is. Whereas a high debt to income ratio signals that you might have too much debt compared to the amount of money you are making.
This is a relief for people who have spent their lives thinking that they should immediately get rid of credit cards and any kind of debt. Remember that knowledge is key. If you have the right information and learn how to manage your money properly, you will take wiser decisions when it comes to getting out of debt.
Related: 4 ways to be debt-free in 2017
Your money is supposed to work for you
If you do not learn the difference between assets and liability, you will always have to work for money.
“An asset puts money in my pocket. A liability takes money out of my pocket.”
The key to success is to invest in things that will generate more cash in the long run:
- Putting a part of your home up for rent
- Owning lands
In order to reach financial freedom, you must ABSOLUTELY make your money work for you! Your assets are what will help you get there.
Surround yourself with smart people
If you know how to do a task well, you will always have a job. If you can come up with ideas and find the right people to execute them, you will always be the boss. There is a famous quote that says:
“If you are the smartest person in the room, then you are in the wrong room.”
It is not about being the smartest but being able to surround ourselves with smart people who will be able to make our ideas come to life.
Patience and motivation are key
Success is not made overnight. Robert Kiyosaki spent a few years of his life sleping in a car with his wife…You must learn to fail in order to get better and stronger. Failure is an important part of the process. It is in the way that you get up after a failure that your true strength lies.
Related: 3 things to do when nobody believes in you
Do not be afraid of wealth
Depending on the way we were raised, it can be easier to see money as something evil that will cause us to lose our principles and values. However, this way of thinking will only keep us poor, settling and probably unhappy. Money has power and is necessary to survive here on earth. It is important that you do not become a slave to money but it is also crucial that you recognize that money is important and that it is more than OK to desire it.
Your mindset is your strongest weapon. The second your way of thinking shift, you will be able to accomplish things you never thought possible.
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Ann-Sophie Ovile, Writer, ShortStints