For this review, I look at another great book on financial education. Robert Kiyosaki’s first book, Rich Dad Poor Dad, presents simple yet powerful lessons on managing personal financial affairs using simple stories and easy-to-follow concepts.
Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That The Poor And The Middle Class Don’t!
This book does the wonderful job of explaining these dry accounting concepts of income statements and balance sheets in a very readable and understandable format. It shows the cash flow patterns of poor people, middle class people, and rich people. It also shows how, from a strictly financial point of view, the cash flow pattern of the middle class is the worst you can have.
But more than accounting concepts, it analyzes that the rich simply think differently about money, how to use it, its powers and its virtues. I have long observed that America is a country that yearns for success, but hates successful people. Too often, I have seen people vilified whose only crime is working hard and achieving success and wealth. When I was younger, I also shared many of these views.
Of course, there are some people who act like leeches and make a living sucking the financial marrow out of other people’s lives (people with payday loans and many financial product sellers come to mind), but generally speaking, Most of the people who have achieved wealth have done so through hard work and service to others.
One of the most powerful concepts is the fact that you will only earn a limited amount working for a paycheck. It is possible to get rich working for others if you start early and manage your cash flow well. However, if you open your own business in parallel, the reward potential is much higher as a business owner. Additionally, as an employee, you serve the employer in a designated role. This means that the role was most likely not designed specifically for you, and therefore was not designed to take advantage of your unique gifts and talents. Only when you have the opportunity to create a role just for yourself will you have the best chance of success. Finally, when you are working for paycheck rather than profit and can count on a steady and secure income stream, you often unconsciously turn off some of your brain’s creative centers. When your financial well-being is linked to the generation of new ideas, you will be surprised how much more you can dream and give life. Unless you are trained to look for opportunities, you will pass them up.
The most important learning that can be learned from this book is to realize that the mindset of employees is limiting. The employee, as it is largely understood today, is a relic of the industrial age and factory culture. Before the industrial age, farmers and merchants generally made money by buying and selling the fruits of their labor. Indeed, everyone was self-employed. In the 1800s and much of the 1900s, roles were designed so that people acted as cogs in the manufacturing process. Managers developed tasks into established procedures, and the last thing managers wanted was for an employee to use their brain to redesign the system or come up with ways to change things. In exchange for doing things exactly the way the managers told him to do them, the employee was paid a salary. The belief in the infallibility of management decision making has thankfully Gone in most workplaces, modern management thinking is moving much more into the employee-designed workplace that is paid based on performance and production. But the factory / employee mentality is still alive and well. It is very dangerous to have it in the economic climate of the 2000s. To remain competitive in a global economy, you need to be able to harness the talent and creativity of your people and the mindset of employees is a real hurdle that companies must overcome.
By rejecting the employee mindset and adopting a self-employed mindset (even if you are an employee), you will not only distinguish yourself from your employer, but also continue to exercise and grow your creative muscles and identification skills. and capitalize on the opportunities.
Rich Dad, Poor Dad is a great book that gives you several great lessons.
If I’ve inspired you to choose Rich Dad Poor Dad, I encourage you to click on the links in this post or on my page. YouthFinancialEducation.com is not only a great place to learn how to be financially successful, it is also a place where I constantly leverage my creativity and skills to bring you value. By clicking the links from here, you help me reward myself for bringing you that value.