by Happy Today!
This week we delve into Chapter 5 of Rich Dad, Poor Dad by Robert Kiyosaki. In a few short weeks we have been introduced to minding our own business and understanding values of corporations. There are a few common themes throughout each chapter including the value of buying assets and self-education.
This chapter encourages the reader to consider the motivation behind the desire to increase one’s financial intelligence. Mr. Kiyosaki provides his reasons for pursuing a higher financial IQ and the power of examples to impart wisdom.
“Another case for developing your financial intelligence over a lifetime is simply that more opportunities are presented to you. And the greater your financial intelligence, the easier it is to tell whether a deal is good. It’s your intelligence that can spot a bad deal, or make a bad deal good.” – Robert Kiyosaki
The early investors of companies like Facebook, Twitter, Amazon, Apple, and Zoom were students of the market. They were financially intelligent and if they maintained their financial strategy with these businesses in their portfolios, they are reaping financial rewards. These are real examples of the benefits of a strong financial education.
Here are a few lessons from Chapter 5:
Lessons From Chapter 5: Rich Dad, Poor Dad
1. Are you letting self-doubt hold you back?
“Yet the one thing that holds all of us back is some degree of self-doubt. It is not so much the lack of technical information that holds us back, but more the lack of self-confidence.”
2. Financial expertise requires courage.
“Yet as a teacher, I recognized that it was excessive fear and self-doubt that were the greatest detractors of personal genius.”
“….your financial genius requires both technical knowledge as well as courage.”
“If fear is too strong, the genius is suppressed.”
3. Look at the history of wealth to identify the direction you want to pursue now.
Land was wealth 300 years ago. So the person who owned the land owned the wealth. Later, wealth was in factories and production, and America rose to dominance. The industrialist owned the wealth. Today, wealth is in information. And the person who has the most timely information owns the wealth.”
4. You have to know what to do with your money.
“There are a lot of people who have a lot of money and do not get ahead financially.”
“They have the money, the time is right, they have the card, but they can’t see the opportunity staring them in the face. They fail to see how it fits into their financial plan for escaping the Rat Race.”
5. You have what you need to increase your financial intelligence.
“The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth seemingly instantaneously.”
6. Don’t be afraid to learn from games.
“Games reflect behavior. They are instant feedback systems. Instead of the teacher lecturing you, the game is giving you a personalized lecture, one that is custom-made just for you.”
7. Terms to learn more about:
- Financial statements
- Investment strategies
- Laws
- The market
- Speculative stocks
- Capital gains tax
- How to raise capital
Ending this post with terminology which can be incorporated into your financial education journey seemed fitting in light of the many times financial intelligence has been mentioned through five chapter. In addition, there were numerous examples dispersed throughout the chapter regarding benefits of a strong financial foundation. As Robert Kiyosaki says:
“…That is the primary reason I constantly encourage people to invest more in their financial education than in stocks, real estate, or other markets. The smarter you are, the better chance you have of beating the odds.”
Til next time,
“Often in the real world, it’s not the smart who get ahead, but the bold.” – Robert Kiyosaki
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