Rich Dad, Poor Dad

Lessons From Rich Dad, Poor Dad – Chapter 2

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Chapter 2 of Rich Dad, Poor Dad is entitled Why Teach Financial Literacy? It included pictorial examples of of financial financial concepts such as cash flow as well as scenarios which are relatable.

Here are eight lessons from Chapter 2:

1. The importance of financial literacy

“It’s not how much money you make. It’s how much money you keep.”

“Money without financial intelligence is money soon gone.”

2. Retirement doesn’t mean not working

“…it means that, barring unforeseen cataclysmic changes, we can work or not work, and our wealth grows automatically, staying ahead of inflation.”

3. Understand the difference between assets & liabilities

“Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets.”

“Once you understand the difference, concentrate your efforts on buying income-generating assets.”

4. Always KISS – Keep it super simple

“An asset puts money in my pocket. A liability takes money out of my pocket.”

5. Recognize what your cash flow pattern is

“It is the cash flow that tells the story of how a person handles their money.”

“If your pattern is to spend everything you get, most likely an increase in cash will just result in an increase in spending.”

6. Learn how to manage your money

“It’s called financial aptitude—what you do with the money once you make it, how to keep people from taking it from you, how to keep it longer, and how to make that money work hard for you.”

7. Don’t be afraid to be different. Remember the power of the mirror.

“The fear of being different prevents most people from seeking new ways to solve their problems.”

“Many financial problems are caused by trying to keep up with the Joneses. Occasionally, we all need to look in the mirror and be true to our inner wisdom rather than our fears.”

8. Be goal specific by developing your definition of wealth.

“Wealth is a person’s ability to survive so many number of days forward—or, if I stopped working today, how long could I survive?” – R. Buckminster Fuller

“…wealth measures how much money your money is making and, therefore, your financial survivability.”

Til next time,

““An intelligent person hires people who are more intelligent than he is.” – Robert Kiyosaki

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