We are in chapter 8 of Rich Dad, Poor Dad. It seems it was last week when I began posting lessons from this classic book. One more chapter to go and this book will be finished.
This is the chapter which summarizes everything written in the prior chapters. It continues the theme of creating a mindset for wealth supported by independent commitment to learning and taking financial risks.
One chapter to go and this book will be complete. Which means it is time to consider the next title for the next read with me. Should we continue the theme of financial literacy or navigate towards mindset changes? Entrepreneurship or sales are other topics covered in Rich Dad, Poor Dad. Let’s think on this for a little while. Now to this week’s chapter.
Chapter 8 – Getting Started includes Robert Kiyosaki’s 10 step process for advancing your financial literacy.
1. Find your why. When you know the reason why you want to improvement and what you don’t want to deal with anymore, you will make the necessary sacrifices to succeed.
“A reason or a purpose is a combination of “wants” and “don’t wants.”
“When people ask me what my reason for wanting to be rich is, I tell them that it is a combination of deep emotional “wants” and “don’t wants.”
“I’ve learned that, without a strong reason or purpose, anything in life is hard.”
2. Make decisions which align to your why. Start with how you will spend your money then advance to how you make your money work for you.
“Having no money should not be an excuse to not learn. But that is a choice we all make daily: the choice of what we do with our time, our money, and what we put in our heads.”
3. Bird of a feather flock together. Seek out a diverse group of friends who can teach you something.
“If you’re smart, you listen to both. Keep your mind open, because both have valid points.”
“The reason you want to have rich friends is because that is where the money is made. It’s made on information. You want to hear about the next boom, get in, and get out before the next bust.”
4. Learn quickly and learn often. Make a commitment to learn everything you can about the path to your goal.
“I have a different slant. I say, “You become what you study.” In other words, be careful what you learn, because your mind is so powerful that you become what you put in your head.”
5. No matter what, pay yourself first. This action will give you the strength to find the solution to paying your other debtors.
“Although I pay my bills last, I am financially astute enough to not get into a tough financial situation.”
“So rule number one in paying yourself first is: Don’t get into consumer debt in the first place.”
“Use the pressure to inspire your financial genius to come up with new ways of making more money, and then pay your bills.”
6. Find and use experts to help you succeed. Don’t hesitate to pay their worth – the price you pay for them is based on the revenue you will generate from their advice.
“A good broker should provide you with information, as well as take the time to educate you.”
“What I pay a broker is tiny in comparison with what kind of money I can make because of the information they provide.”
“A good broker saves me time, in addition to making me money..”
7. Be an Indian giver. In some circumstances, give because the receiver is in need. In other circumstances, consider how will you get your investment back.
“In the world of the asset column, being an Indian giver is vital to wealth. The sophisticated investor’s first question is: “How fast do I get my money back?”
8. You can have luxuries but pay for them with your assets.
“As I said earlier, if a person cannot master the power of self-discipline, it is best not to try to get rich. I say this because, although the process of developing cash flow from an asset column is easy in theory, what’s hard is the mental fortitude to direct money to the correct use.”
“Too often today, we focus on borrowing money to get the things we want instead of focusing on creating money.”
“To be the master of money, you need to be smarter than it. Then money will do as it is told. It will obey you. Instead of being a slave to it, you will be the master of it.”
9. Choose realistic heroes and learn from them.
“By having heroes, we tap into a tremendous source of raw genius.”
“But heroes do more than simply inspire us. Heroes make things look easy. Making it look easy convinces us to want to be just like them.”
“I follow what Warren Buffett invests in, and I read anything I can about his point of view on the market and how he chooses stocks.”
10. Give and it will be given back to you. Give your knowledge, time and money. Teach and you will learn.
“If you want something, you first need to give,” he would always say. When he was short of money, he gave money to his church or to his favorite charity.”
“So that’s why I say, “Teach, and you shall receive.” I have found that the more I teach those who want to learn, the more I learn.”
“If you want to learn about money, teach it to someone else. A torrent of new ideas and finer distinctions will come in.
Til next time,
“Smart investors don’t time the markets. If they miss a wave, they search for the next one and get themselves in position.” – Robert Kiyosaki