Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money--That the Poor and Middle Class Do...

Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money--That the Poor and Middle Class Do Not! | Robert T. Kiyosaki, Sharon L. Lechter | The lack of money is the root of all evil

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Rich Dad, Poor Dad...

	Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money--That the Poor and Middle Class Do Not! Robert T. Kiyosaki, Sharon L. Lechter Business Plus, 2000 - 207 pages average customer review:based on 2186 reviews view larger image
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highly recommended

This guy knows what he's talking about

I wont go into the details of this book since Im sure class="textlinks">that by reading the thousands of reviews on here your either by now interested or not. With that said, Robert Kiyosaki has predicted everything that is happening right now many many years ago with the financial crisis from Wall St to Real Estate crashes, everything. This guy knows what he is talking about.
Now he is on a mad crusade speaking in cities on how you can benefit in this type of market.

The lack of money is the root of all evil

This book tells the story of Kiyosaki and a friend who were taunted about being class="textlinks">poor which motivated them to learn how to be rich from their "rich dad". Two dads are presented in the book: one is socialist and poor; the other is capitalist and rich. Their thinking creates their wealth or lack of it.

This is a book that explains simply how the three classes handle and think about money. By learning how the rich create money, a reader may be able to leave the rat race. It really depends on the reader whether he can overcome his fear of taking risks so he can have a chance of becoming rich. For instance, L and K mention that one would be wise to get used to what one hates doing, rather than solely doing what you love to do. So you should do sales to learn how to overcome your fear of rejection and learn how to communicate better. You should learn many different fields of business to become more successful in general. Don't get stuck solely doing a job you like for limited income.

One should learn to invest in real estate and high risk/high reward investments to become rich. You need to put more effort in making money than just doing a job and saving money every month. You need to learn to take risks and learn how to keep failing until you succeed. You should read about investing voraciously to become financially literate.

Schools don't teach you how to make money. They teach you how to be an employee of an employer that you are making rich. Employees are soft-core slaves with the mentality of servants or slaves. This book teaches you the mentality of the master of money, the king of pentacles. It shows the mindset of the poor and middle class that keep them in their places.

I particularly liked the idea of asking the question "How can I afford what I want?" instead of saying "I can't afford it." The question unleashes the creative power of the mind that creates wealth, the other statement shuts it down. Or you should ask yourself, "How can I get out of the rat race?

There is an interesting explanation about how businesses are different from governments. Business owners consider employees liabilities since they increase labor costs and investors do not like to see increased costs on the balance sheet of the business owner. The strategy is to hire as a few employees as possible at the lowest cost so that the business can make a profit. The system is one of employees working just enough not to get fired and employers paying just enough to employees so they will not quit. Government does the opposite. Agencies spend all their budget and hire more employees to keep the agency growing. Taxpayers foot the bill for the expansion of government. That is why the cost of government tends to rise as time goes by.

At one time, there was no income tax in America, but the tax was implemented by using class envy against the rich. Eventually the income tax reached into the pockets of poorer citizens to pay for the cost of expanding government. The rich use corporations to reduce their income tax burden, the poorer citizens do not. Taxes are our biggest expense nowadays. We work from January to May to pay off our tax burden. L and K do not like the immoral story of Robin Hood who steals from the rich to give to the poor. It is wrong to forcibly take money from anyone, no matter how rich they are. This book advocates a republican view of economics. Everyone is ultimately responsible for making their own money and no one should be taxed to give to someone else.

The authors remind us of our cruel capitalist system by mentioning a pension planner's response about what employees who are not at the top will get for a pension plan. The smiling reply was a "silver bullet" that they could kill themselves with once their money was gone. In other words, people cannot depend on the government or business to take care of them, especially after the unstable dollar is no longer linked to the gold standard and only has "fiat" value, which will lead us to financial disaster. They do not care and they may not have the money available to take care of you. You will have to increase your financial intelligence to get money for retirement in the future.

There is more on investment strategy. One needs to buy assets such as stocks, bonds, tax liens, and real estate for investment to get rich. It is a good idea to ask attorneys and banks whether they have any foreclosure deals. Houses that you live in are considered a liability because of taxes, maintenance costs, and insurance costs. This is a good book for getting someone to think differently about money. It does not go into detail about buying real estate, stocks, foreclosure deals, tax liens, or bonds. One can go slow and safe and put money in a 401k but you better start at 20 because it will take a long time to become well off. This book is for those who want to take greater risks to possibly reap more rewards and riches.

Like most of these money gurus, they offer their knowledge for a price to cure the world's poverty problems and the increasing gap between rich and poor. Lest you think that the authors are solely vulture capitalists, they do emphasize the idea of giving to receive without expecting return. The book gives good advice as long as you are strong enough to change and follow it. Not many will be able to. Like most self-help gurus, they believe people can change.

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Think Assets, Newly Defined

I've never come across a better definition of an ASSET and LIABILITY than the one Robert Kiyosaki gives : An asset is any item (tangible or otherwise) which generates income and a liability is one which creates expenses.

class="textlinks">That's it.

So whatever it is you own, regardless of what it's labelled in an accounting textbook, if it is not generating income, it's not an asset. Worse still, if it's leading you to spend more, then it's a liability.

E.g. your car. Tradtionally, one would call it an 'asset'. But RK'd slot it under a 'liability' because it's taking up fuel costs, insurance fees, road taxes, maintenance, etc. (RK also spends lots of pages trying to convince his readers that their houses are also liabilities, given the amount of debt one gets into via the purchase).

The message of Rich Dad, Poor Dad, if I could cull it all into one sentence, is : Spend your money buying things which generate income i.e. buy assets.

The more assets you have, the more income you'll get, leading to even more assets, more income, ad infinitum. That, according to RK, is what the rich do and teach their kids. The opposite - i.e. spending on liabilities and getting stuck with ever-growing expenses - is what the 'middle-class and poor' folks do (ouch).

So when you get that bonus, instead of blowing it all on clothes or a new watch (all liabilities because they don't generate income), think about putting it into any one of the following:

a) Your Own Business (this could be anything from a worldwide conglomerate to a personal Web-page)

b) Stocks, Equities and Bonds (high-risk so do diversify, hedge, read more, get advice, etc.)

c) Mutual Funds and Unit Trusts (less aggressive but over the long-term the amounts can be substantial)

d) I.Ps', Patents and Copyrights (for the inventor/author types, or if you can afford it, buy one)

e) Rental Income (which tends to pay for and exceed the purchasing loan in the first place)

Money put into these items end up 'working for you' because time brings about the 'compounding effect'. Until one day you can quit your job because the income generated from your assets can pay for all your expenses and liabilities.

And thus, thou art truly wealthy. When your (newly defined) assets run the show for you even after you leave your 9 to 5.

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