If you were to stop working, imagine this
to yourself. How long can you survive on your remaining savings? What I just asked
you was a definition of wealth. Here is a man named Robert Kiyosaki, an American
investor, businessman, author, motivational speaker, and financial commentator who
became well-known in the recent years who has an estimated net worth of 80
million dollars! Want to know something interesting? “Oh?” He wasn’t raised in a
wealthy background. In fact his family was like most people who work but didn’t
have the best financial education and often times struggled with money. So then
how did Robert become rich today? Let’s take a look as he explains in one of
his bestsellers called Rich Dad Poor Dad Robert Kiyosaki was born in Hilo Hawaii
in April 1947 in 1957 at age nine years old, little Robert was attending the same
public school where the rich people sent their children for his town had lots of
doctors, business owners, and bankers Robert saw that the rich kids would
separate themselves from him for his family wasn’t able to afford the newest
collections of toys and bikes like them. So one day Robert asked his father who
had a PhD and completed multiple universities with excellent degrees, “Dad,
can you tell me how to get rich?” Unfortunately, his dad didn’t know the
right answer because he was a rich himself, so he responded with, “Well, use
your head, son.” “Stay in school, get good grades so you could find a safe and
secured job. His real dad is what he’ll be referred as poor dad. He wasn’t poor at
this time, in fact, he was making lots of money, but in the end, this man’s
financial life takes a turn for the worse. Now little Robert has a friend
named Mike and which Mike’s father would be referred as rich dad. Who started
mentoring Robert and his son Mike about how to really become rich. At this point
in time, rich dad wasn’t really rich yet but soon became to be one of the
wealthiest men in Hawaii. So then, what did rich dad teach Robert? Rich dad poured a strong financial foundation into these kids minds of many important
principles. To start off, the first lesson you need to know is you must know the
difference between an asset and a liability and that you need to buy
assets. If you want to be rich this is all you really need to know and
understand the most! You see, the rich acquire assets and the poor and middle
class acquire liabilities but sometimes they think they are assets. The primary
cause of financial struggle is simply not knowing the difference between an
asset and a liability. “?” OH! Right! You don’t even know what an asset or liability is don’t
you? An asset is something that puts money in my pocket.
A liability is something that takes money out of my pocket. For instance
let’s try cash flow pattern of a normal individual. This person right here
earns his income from a job and as expenses are things like food, clothes,
entertainment, and transportation Unfortunately he doesn’t have assets but
sure does have liabilities that constantly takes money out of his pocket
because things like mortgages, taxes credit cards, loans and believe it or not
the house. Now let’s take a look how to cash flow pattern really works for the
rich. Instead of looking to earn more money from their normal job as the only
source of income, they buy and own assets that brings money into their pockets as
a form of passive income. Passive income is something that earns money that
doesn’t require you to trade your time for it, so in other words you would be
earning money even as you’re sleeping. Examples of assets are businesses that
doesn’t require your presence such as stocks bonds, mutual funds, income generating
real estate, royalties, notes, and anything else that has value that produces income.
As mentioned before, poor dad was making quite a lot of money from his job but
his expenses seemed to always keep up with his income, never allowing him to
invest in assets. As a result his liabilities such as his mortgages and
credit card debts grew greater over time and this is the fault of having income
equals expense and assets is less than liabilities and sadly this is what drove
poor dad into debt even after he passed away. On the other hand, rich dad’s
personal financial statement reflects the result of a life dedicated to
investing and minimizing liabilities so he has income that is greater than the
expense because of assets is greater than liabilities. This is practically why
the rich are getting richer! Their assets generate more than enough income to
cover expenses with the balance reinvested into the asset column. The
asset column continues to grow and therefore the income grows with it. You
see, both dads worked hard, but they have opposing attitudes and thoughts. One dad
recommended study hard so you can find a good company to work for. The other
recommended study hard so you can find a good company to buy. One dad said the reason
I’m not rich is because I have kids. The other said the reason I must be rich is
because I have you kids. One said when it comes to money play it safe and don’t
take risk. The other said learn to manage your risk. One said I can’t afford that.
The other said how can I afford that? Although both men had tremendous respect
for education and learning they disagreed on what they thought was
important to learn. Robert learned from rich dad that the
truth about the general population, their lives are run forever by two emotions,
fear and greed, that keeps you stuck in a pattern of get up, go to work, pay bill.
Get up, go to work, and pay bills. Fear has them in this trap of working, earning
money, working, earning money and hoping fear will go away of not having money.
Instead of confronting the fear they react emotionally instead of using their
heads. The other emotion which is desire, some call it greed, is a second reason
why people also work for money. They desire money for the joy that they think
it could buy. But the joy that the money brings is often short-lived and
soon needs more money for more joy, more pleasure, more comfort, and more security.
You see that same fear and desire is what makes a lot of people be so
fanatical about going to school for a better chance of a high paying job, but
don’t be discouraged an education and a job are important, but it won’t exactly
handle that fear. To handle that fear, you need to learn the power of money, not be
afraid of it. Unfortunately most schools don’t teach
about this and if you don’t learn it, you’ll become a slave to money. Ignorance
of money can cause so much greed and so much fear that can lead you into life’s
biggest trap of constantly working. Rich Dad said learn to use your emotions to
think not think with your emotions. Examples of emotional thinking are like
I need to get another job! I deserve a raise! I want this job because
it is secured! Instead of clearly thinking like is there something I’m
missing here? This is our reality for most people your profession is your
income. The rich, your assets is your income. Apply these lessons to your life
for if I were to ask you about the definition of your wealth if you would
stop working today, how long can you survive? You might laugh at me and say I
no longer work for money, money works for me. Thank you guys for watching! Click
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