BOOK NAME: RICH DAD POOR DAD what the rich teach their kids about money- that the poor and middle class do not
AUTHOR: ROBERT T. KIYOSAKI
PUBLICATION: PLATA PUBLISHING
THERE are plenty of books about financial literacy but very few of them are much easy to understand by the common people like us. With layman's approach everyone of us should be guided regarding financial literacy. Every one of us should know and understand the concept of investing and way to implement those concepts in order to gain proper results through it.
I think the author has been successful in convincing what ever he wanted to deliver to us. Simplicity and to the point approach makes this book even more interesting. Chapter by chapter Robert T. Kiyosaki teaches us the ways we can make money and the way by which we end us loosing money and the ways how we can avoid it.
Though this book has many key points that should be taken note of. Some of them I liked can be summarized below
1)Rich people understand the concept of asset and liability and are capable of differentiate between them. Most of the time poor people end up purchasing liability and consider it as an asset. Rich people are very smart at understanding asset and liability. Rich accumulate assets and reduces liability. In order to gain financial independence one should focus on increasing assets and reducing liability.
2) There are three types of income
a) Hard earned money
b) Portfolio
c) Passive income
Now most of the people get income from their job. This is their hard earned money which is highly taxed and moreover this is the money they work for so this will merely makes any difference in their life.
Portfolio income is income generated by stocks, bonds etc.
And the third income is passive income which is mostly generated by real estates etc. Author wants us to focus on later two types of incomes.
3)Income generated from portfolio and passive income has money work for them. This is the beauty of this income. This is the money which work for you. As per the author rich don't work for money,rather they have money which work for them.
4) Money is made when buying and not while selling.
5) Rich always try to find other ways for income. They do not have one source of income. Possibly they may have one income from profession and another from business. Author says profession and business are two different things.
6) Rich buy luxury from their return of money got through investments. They first invest,earn and spend but the poor people mostly earn through primary income which is mostly job, they spend and if possible they invest the leftover.
7) Rich first pay to themselves ,meaning they focus on investments first and later they focus on other spending.
8) Rich focus on learning new things over time. They invest their time and money learning new things which yields them good return in future.
9) Try to analyse, understand and capture opportunity. Disaster for one can be opportunity to another. Try to figure out which is on your side. In real instate or in stock market crash is a disaster but for investor this can be an opportunity.
10) Work and stay with people who are rich with great ideas and also keep in touch with the failure peoples. Both are beneficial. Former help to plan and understand future and opens up new set of opportunity if seen carefully. Later may guide you what not to do to avoid failure.
Reading this book i came to know about my financial mistakes. I wished I would have read this book earlier. But its fine. Its better late then never. I think as a beginner in financial planning one should look at this book at least once. I know reading books takes much efforts and time but trust me this will bring good results over a long time.
Thanks,
Guru Bargaje
www.gurusreads.blogspot.com
AUTHOR: ROBERT T. KIYOSAKI
PUBLICATION: PLATA PUBLISHING
THERE are plenty of books about financial literacy but very few of them are much easy to understand by the common people like us. With layman's approach everyone of us should be guided regarding financial literacy. Every one of us should know and understand the concept of investing and way to implement those concepts in order to gain proper results through it.
I think the author has been successful in convincing what ever he wanted to deliver to us. Simplicity and to the point approach makes this book even more interesting. Chapter by chapter Robert T. Kiyosaki teaches us the ways we can make money and the way by which we end us loosing money and the ways how we can avoid it.
Though this book has many key points that should be taken note of. Some of them I liked can be summarized below
1)Rich people understand the concept of asset and liability and are capable of differentiate between them. Most of the time poor people end up purchasing liability and consider it as an asset. Rich people are very smart at understanding asset and liability. Rich accumulate assets and reduces liability. In order to gain financial independence one should focus on increasing assets and reducing liability.
2) There are three types of income
a) Hard earned money
b) Portfolio
c) Passive income
Now most of the people get income from their job. This is their hard earned money which is highly taxed and moreover this is the money they work for so this will merely makes any difference in their life.
Portfolio income is income generated by stocks, bonds etc.
And the third income is passive income which is mostly generated by real estates etc. Author wants us to focus on later two types of incomes.
3)Income generated from portfolio and passive income has money work for them. This is the beauty of this income. This is the money which work for you. As per the author rich don't work for money,rather they have money which work for them.
4) Money is made when buying and not while selling.
5) Rich always try to find other ways for income. They do not have one source of income. Possibly they may have one income from profession and another from business. Author says profession and business are two different things.
6) Rich buy luxury from their return of money got through investments. They first invest,earn and spend but the poor people mostly earn through primary income which is mostly job, they spend and if possible they invest the leftover.
7) Rich first pay to themselves ,meaning they focus on investments first and later they focus on other spending.
8) Rich focus on learning new things over time. They invest their time and money learning new things which yields them good return in future.
9) Try to analyse, understand and capture opportunity. Disaster for one can be opportunity to another. Try to figure out which is on your side. In real instate or in stock market crash is a disaster but for investor this can be an opportunity.
10) Work and stay with people who are rich with great ideas and also keep in touch with the failure peoples. Both are beneficial. Former help to plan and understand future and opens up new set of opportunity if seen carefully. Later may guide you what not to do to avoid failure.
Reading this book i came to know about my financial mistakes. I wished I would have read this book earlier. But its fine. Its better late then never. I think as a beginner in financial planning one should look at this book at least once. I know reading books takes much efforts and time but trust me this will bring good results over a long time.
Thanks,
Guru Bargaje
www.gurusreads.blogspot.com
