This is an interesting review by YouTuber Kelvin of the famous book, “Rich Dad Poor Dad”, written by Robert Kiyosak. In this review, Kelvin shared 4 lessons he learnt from this book. If you do not have time to watch this video, here’s a quick summary on the essence of the video:
Lesson 1: The rich don’t work for money
In Rich Dad Poor Dad, there’s a chart called ESBI. Employed and self employed folks fall in the active income quadrant where they exchange their time for money. Big business and investor folks fall in the passive income quadrant where money comes in passively. Our goal is to level up to become a big business owner or investor, that way we no longer need to depend on how much time we can sell for money.
Lesson 2: Pay yourself first
To become rich, you need to pay yourself first. The moment we receive our pay, most of us would pay everyone else first, so it’s time to stop that. Instead once you receive your pay, put aside some of the money. As to how much, it depends on your situation. The general advice is to save 20% of your income, but I feel that you should aim higher, at least 50% if your goal is to become rich. And instead of putting your money in the bank, learn how to invest your money, because otherwise your money will be eaten up by inflation.
Lesson 3: The rich acquires assets, the poor acquires liabilities
In this book Rich Dad Poor Dad, Robert Kiyosaki shared that all of us have assets and liabilities. Assets bring in money while liabilities take away money. The rich have a lot of assets and little liabilities, while the poor have a ton of liabilities and little to no assets.
The rich will acquire assets first, then use it to pay for their expenses. That’s because assets can help you make more money, so technically you will never run out of money. So, focus on building more assets, like investing into stocks or rental property so that they can help you earn more money.
As long as the assets bring in more passive income than your expense, you will be financially free. Which means you no longer have to go to work to earn money, you can quit your job and do all the things that you enjoy.
Lesson 4: How you think will affect your future
Our parents and teachers will tell us to study hard, get good grades so that we can find a good job. But this advice is outdated. If we just follow this advice, we will be stuck in a rat race, where we work and spend till we retire in our 60s. Many of the dying regretted working so hard or living a life that’s not true to themselves.
To change that, you need to change how you think. Instead of thinking that you can’t achieve anything in life, think of how you can improve your situation. If you can think that way, you will be able to work towards it.