Rich Dad Poor Dad – Robert T. Kiyosaki

Notes and Thoughts after Reading

by Tim Justice

 

Lesson 1: The Rich Don’t Work For Money

‘The poor and the middle class work for money.  The rich have money work for them.’ Pg. 30

Why do people keep working at jobs they hate?  FEAR

• Fear of not paying their bills
• Fear of being fired
• Fear of not having enough money
• Fear of starting over

Will a job be the best solution to this FEAR over the long run?  A job is a short-term solution to a long-term problem.’ Pg 44

‘History proves that great civilizations collapse when the gap between the haves and have-nots is too great’ Pg 48

 

Lesson 2: Why Teach Financial Literacy?

‘Money without financial intelligence is money soon gone.’ Pg 59

Building a building – like the empire state building – you need to dig a deep hole and have a strong foundation.  Get education first.

Rule #1 – You must know the difference between an asset and a liability, and buy assets.

‘If you want to be rich, spend your life buying assets.  If you want to be poor or middle class, spend your life buying liabilities.’ Pg 67

Peoples top expense is taxes.

Japanese powers:  The Sword, The Jewel, and The Mirror

Weapons, Money, and Knowledge

When it comes to money, high emotions tend to lower financial intelligence’ Pg 81

High Income, Low Expenses, High Assets, Low Liabilities = Investor

Risking 20k to make 1 million is not risky for the Financially Literate

 

Lesson 3: Mind Your Own Business

Build and keep your asset column strong.

Once a dollar goes into it, it never comes out.

 

Lesson 4: The history of Taxes and the Power of Corporations

The original corporations were ships going on voyages, if they sank, people only lost the investment in the ship.

An employee with a safe secure job with no financial aptitude has no escape.’ Pg 111

Don’t work your way up the corporate ladder, own the ladder!

Areas that will help you as a business owner:

• Accounting
• Investing
• Market Knowledge
• The Law
• Tax Advantages
• Protection from Lawsuits

Corporations are the ones who benefit from the tax code.

 

Lesson 5: The Rich Invent Money

‘Often, in the real world, it’s not the smart who get ahead, but the bold.’ Pg 123

“’The poor and middle-class work for money.’ He would say ‘The rich make money.  The more real you think money is the harder you will work for it.  If you can grasp the idea that money is not real, you will grow richer faster.’” Pg 130

‘The world is always handing you opportunities of a lifetime, every day of your life, but all too often we fail to see them.’

‘Simple math and common sense are all you need to do well financially.’ Pg 140

‘I have friends who are playing it safe, working hard at their profession, and failing to gain financial wisdom., which does take time to develop.’ Pg 144

Private equity investing

Invest more in financial education than in markets, real estate or bonds.

If he makes money in speculation, he pulls the profits and invests them in real estate.

‘Unfortunately, the main reason most people are not rich is because they are terrified of losing.  Winners are not afraid of losing.  But losers are.  Failure is a part of success.  People who avoid failure, also avoid success.’  Pg 147

3 skills needed to be a great investor:

1. Find an opportunity that everyone else missed.
2. Raise money.
3. Organize smart people.

 

Lesson 6: Work to Learn – Don’t work for Money

Best selling author – not best selling writer

Financial intelligence is a synergy of accounting, marketing, law and investing

Network marketing is a great starting place

Learning something new is hard – but life is much like the gym – the hardest part is deciding to go, once you’re there its easy and you’re glad you went.

Don’t’ build a better hamburger, learn how to replicate a system

‘The world is filled with talented poor people.’ Pg 166

Management skills needed

• Cash flow
• Systems
• People

 

Lesson 7: Overcoming Obstacles

The Primary difference between a rich person and a poor person is how they manage fear.’ Pg 171

Obstacles:

• Fear
• Laziness
• Cynicism
• Bad habits
• Arrogance

Lot’s of poor people have never lost a dime.  The rich don’t like losing, but they understand it.

Manhattan story = Compounding interest $24 @ 8% annually would be worth more than LA, Chicago, and Manhattan

Failure inspires winners and failure defeats losers.’ Pg 176

If you want to be rich, get focused.

Doubt is expensive.’ Pg 182

If more people understood how a stop worked in stock-market investing, there would be more people investing to win instead of investing not to lose.’ Pg 184

The most common form of laziness = laziness by staying busy.’ Pg 186

“What’s in it for Me?” WiiFm

Always pay yourself first

 

Lesson 7: Lessons

1. Find a reason greater than reality. The power of spirit
2. Make daily choices. The power of choice
   1. I choose to be rich

When someone gets robbed, the thieves steal the stuff and leave the books.

3. Choose friends carefully. The power of association.
4. Master a formula and then learn a new one. The power of learning quickly.
5. Pay yourself first. The power of self-discipline.

Income should go to assets first!

Savings is no longer the asset it used to be.

FORT GROWTH = get a strong base in the asset column

‘The rich know that savings are only used to create more money, not to pay bills.’ Pg 213

6. Pay your brokers well. The power of good advice.

People pay 20% on bad service but complain about commissions!

7. Be an Indian giver. The power of getting something for nothing.

Once you get your profits back, take the money you put in out, and then it’s clear sailing.

8. Use assets to buy luxuries. The power of focus.

$ to kids for Assets.

9. Choose heroes. The power of myth.
10. Teach and you shall receive. The power of Giving.

When people aren’t smiling at me, I begin smiling.  It’s magic!~

 

*ACTION ALWAYS BEATS INACTION* pg 233

The Key to Financial Freedom is to convert cash flow and income into assets and growth.

‘A real investor makes money in an up market and a down market.  That is why they make so much money.’  Pg 241

‘Ordinary income is money you work for and passive income is money working for you.’ Pg 243