It has been 22 years almost, since the book Rich Dad Poor Dad, got published. The all-time classic from Robert T. Kiyosaki not just taught me about financial literacy but also explained to me about how to build a mind-set which could help me accumulate huge wealth in my life.
Being born in the 21st century, I’ve experienced life as a rat race. A race filled with chaos, competition and jealousy. From high school, right at the outset of our formal education, where everyone is trying to score stellar grades, to be like that topper, forgetting there is uniqueness in them, to college where we do the exact same thing, this time in a way that is a bit fierce yet not fruitful.
The first time I read the book, on the second page the author stated: “Poor dad said that the love of money is the root of all evil and the rich dad always emphasised on the fact that the lack of money is the root of all evil!”
Boom! It hits right where it needs to. Doesn’t that line prove to be true? We all are always taught that money is not the most important. Yet, we’re deprived of the fact that money is one of the most important resources, it gives power! Lack of money has resulted in daylight terror in many African countries, where people are suffering from serious issues due to unavailability of resources that can’t be bought without money.
This is the reason why I love the rich dad’s sayings. He lays out the practicality of life in front of us—about our desires, fear, emotions and poor dad’s mentality. Following are the crucial aspects of wealth accumulation that I learnt from him. So, if you’re in your 20s or in your 40s, this article is for you.
1. Don’t work for money, let your money work for you
Money is an illusion. The inner desire and fear of not making enough money for that car or apartment lead us to run after money. Recall that example from the book, the donkey keeps dragging a cart while the owner is dangling a carrot just in front of its nose. The donkey’s owner might reach his destination, but the donkey is never going to get that carrot. The donkey is chasing an illusion!
Moral: Don’t let money run your life. Always learn to use your emotions to think, not the other way. A person who chases money never grabs opportunities as he’s too busy running after an illusion.
2. Job is not the only way to earn money
Many of us today come from backgrounds with zero financial literacy. Typically, we’re always told to get good grades, study in a prestigious college, and then settle for a decent job. A job nice enough to pay the mortgage loan of the home you and your girlfriend dreamt about, nice enough to pay bills at the end of every month, and nice enough to pay the price of the ticket of that ball game your soul mate wanted to see a fortnight ago!
Moral: Here comes the learning from the rich dad. He tells us: “A job is only a short-term solution to a long-term problem. One needs to side-track emotions and use head to really make wise decisions. If you acquire assets which generate income, that is passive incomes, then you’ll never be in the deep shit of debt and crisis. Think of other sources of income; don’t stick to the most usual one: a job!”
3. Don’t try to build an Empire State Building on a six-inch slab
One of the best sayings of rich dad goes like this: “Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets.” The rich dad has developed a principle named Rich Dad KISS Principle! Wait, this isn’t the usual kiss which you’re thinking. It is: Keep It Simple Stupid or Keep It, Super Simple.
Maybe the GAAP or ICAI define assets in some other way but the rich dad has a very simple definition of assets: Assets put money in your pocket, while liabilities take money out of your pocket.
Moral: To be rich, you must get yourself well versed with the real-life asset-liability concept. Every time when you are going to put up your own money in some superficial or hypothetical asset, think once more, is that really an asset? Is it going to give you some returns, not just returns but some monetary returns! Think about the time when your father paid the down payment of his dream apartment and since then has been paying equated monthly instalments. It has been 15 years and that apartment, which he thought was an asset, has only got him off his money making map.
4. Make mistakes
Oops, did the headline say 3 lessons that I learnt from the rich dad? Most crucial learning which I inherited from the rich dad is to commit mistakes and learn from them. Come one, that doesn’t mean you should intentionally bowl too wide from the wickets to Virat Kohli, just to see where the ball goes off. I am sure it’ll be off to the stands!
Sundar Pichai, Bill Gates, Lloyd Blankfein, Eminem, Cristiano Ronaldo, all those big shots have made mistakes throughout their evident career. Guess, what sets them apart from under-achievers? Their long-sighted vision of learning from their mistakes.
Moral: So, if you are still a young entrepreneur, or a woman looking up the Midtown Manhattan view from the top of the rock, learn more, generate ideas, live freely. Don’t just think about money, make a mindset which will eventually bring you truck full of money!