The Lesson from Rich Dad, Poor Dad

“Many people work very hard, but they never seem to earn enough. In Rich Dad, Poor Dad, Robert Kiyosaki explains how to escape this “rat race” and achieve financial independence.”

When you are trying to aim for financial independence, people would think that going to school getting high grades and getting a good job would be the answer to all your financial problems right? Well, if you think that’s the way to go, then you probably shouldn’t be reading this. Just kidding! It’s just a sarcastic comment. According to Rich Dad, Poor Dad, Robert Kiyosaki claims that the education system is the number one cause of why so many people struggle financially. Schools teach people how to work for money, but they do not teach them how money can work for them. For example, Orange County is one of the richest counties in United States and yet many people within that county are not really good at handling their money to a certain extent, that is why they look for Orange County CPA firms and depend on them to manage their money. Although Orange County CPA firms are very useful and helpful, the lack of financial skills taught in school for these people means that even highly educated people generally do not know how to handle their money. The results are that the majority of people are trapped in work to pay their bills and are chasing paychecks all their life.

Unfortunately, Robert Kiyosaki claims this as his sad conclusion. Luckily, he also offers a way out of this loop. The essential element with working for money is that a job is a short term solution to a long term problem. People strongly believe that if they get a promotion or a raise, or get a new job, they will finally have enough to live financially. However, if you do not know how money works, you can never have enough money alone will not solve anything. It will even get most people into more debt. So what is the secret to financial independence?

The secret is actually quite simple: “Know what an asset is, acquire them and become rich.” (Kiyosaki) Sounds easy right? Heres the hard part though, most people are not appropriately taught how to spend their money. Many do you not know the difference between an asset, which is something that puts money in your pocket, and a liability, which is something that takes money out of your pocket. Kyosaki’s main point is that the only way to become financially independent is to accumulate income generating assets which can pay for your expenses. Unfortunately, many people would rather buy a new car or a phone instead of investing their money in stocks or real estate.

If you do not want money to control you like it does most people, then you will have to do things differently from the crowd.

We would highly recommend reading Robert Kiyosaki’s book Rich Dad, Poor Dad, it is very interesting, gives you a different perspective in life, and it is very educational.

***ARTICLE BASED ON VALUESPREADSHEET.COM WRITTEN BY NICK KRAAKMAN***