Rich Dad Poor Dad

In today's world, people believe in the fallacy that to be

rich, you need to earn a high salary. The book 'Rich Dad,
Poor Dad' belies this myth and challenges you to think
about how you control your financial life. Learn about
personal finance and identify the characteristics common
to wealthy people. Challenge the beliefs that your home is
an asset and that your salary is enough to buy unnecessary
things with your credit card. Teach your children financial
literacy early on to help them become independent and
wealthy adults in the future. The authors of this bestseller
challenge you to think outside the box and change your
mindset about money. Learn from experts and make
money work for you!

Children Need Financial Education

Lack of financial education in schools makes children

lousy financial managers after they grow up. Teens often
receive credit cards, cell phones, and an allowance, but are
rarely taught about excessive spending, saving and
investing money, or avoiding and managing debt. The
children are expected to receive financial education from
their parents, but most of them are ill-equipped to teach
their children about money. They may be poor parents
struggling to pay expenses, or doctors, lawyers, and smart
bankers who - despite their qualifications and high
salaries - face financial challenges. Only a few kids raised
by wealthy and financially savvy parents are prepared to
manage their future finances.

Wealthy and poor parents may have different attitudes

toward money. The rich dad encourages his children to be
entrepreneurs, take on and manage risks, and advocates
financial independence - not dependency on the employer
or the government - for financial protection. The rich dad
believes that by understanding how money works, you can
use it to work on your behalf and consequently
accumulate wealth.

They shape their lives through their thoughts and actions.

Rich parents will encourage their children to find ways to
buy what they want but can not afford. They encourage
their children to think about money and not accept their
financial status and inability to pay for the things they
would like to have. We need to ensure that our children
understand money from the very beginning so that once
they are grown up, they are financially savvy and able to
survive in uncertain environments.

Lose Your Fear And Take Risks

Poor and middle-class people prefer to choose a safer
route, taking jobs and settling into them, so they do not
have to take risks. There are two reasons for this: fear and
greed. The fear that we will stop making money if we leave
our jobs keeps us going, even when we do not like what we
are doing. We live our lives by working, being paid, paying
bills and spending what we earn. What we buy gives us a
temporary joy, so to earn more and buy more expensive
things, we accept jobs with high wages, but the cycle win,
pay and spend continues. Money rules our lives and
controls our emotions. And as we struggle to remove the
emotions of decision-making, fear and greed dominate us,
and we are permanently trapped in this "employee
model." So we blame our bosses for our economic
hardships instead of taking responsibility for our own
financial well-being.

A misrepresented view of money forces us to think in the

short term, how to pay the bills at the end of the month,
for example. And we do not face our weaknesses, needs or
dependencies to understand that there is a better way,
where we do not have to worry about money. The
fundamental truth is that the rich did not become rich just
by working hard, but because they also sought
opportunities everywhere, even if it meant working for
free. We can be rich without being completely dependent
on our jobs to earn an income. For this, we need to put
aside fear and greed, think like a businessman and not as
an employee and explore new ways to make money work
in our favor.

Learning About Finance

With so many economic ups and downs, only financial

knowledge can keep our money safe. If we focus on
making money - hiring accountants or financial managers
to invest our profits for example - there is a good chance
that we will one day lose. Having an open mind for
financial opportunities and investments and asking
questions instead of accepting anything that financial
experts tell us (such as "diversify your investments" or
"your home is an asset") will help us make informed
decisions and protect our wealth. Financial knowledge
enables us to identify rare investment opportunities,
instead of adopting inflexible mindsets in which we
become risk averse and focus only on secure stands.

What matters is not how much you earn, but how much
you save for the future and for the other generations. To
increase your equity for future generations, you need to
have financial knowledge. The most important question
is: how many assets and liabilities do you have? An asset
is anything that yields money and a liability whatever
spends. The wealthy buys assets, while the middle class
often buys liabilities that they believe to be assets.
Financial problems are usually caused when we lose
control of our spending habits, spending more than we
can to keep friends and family (driven by the emotional
decision to fulfill our desires with money), and get stuck
in financial patterns. Making more money is not the
answer to your financial problems but self-knowledge and
financial knowledge. If you believe your home is an asset,
think again. An asset is anything that makes more money,
and in fact, a house spends a lot more money in the
following ways: mortgage debt; expensive taxes; Losses
due to the depreciation of the value of the house; And lost
investment opportunities since your income is tied to your
home.

An asset is, therefore, anything that drives us more

money, such as stocks, bonds, a business that we do not
need to work on, but which help generate more income,
intellectual property royalties, mutual funds, property,
and promissory notes. To be rich, we need to buy assets
since they provide us with a stream of income that we can
use to earn more assets that produce money, pay our
children's expenses, or start a new business without
borrowing.

Focus On Building Solid Assets

At a university meeting, McDonald's owner Ray Kroc

asked the students what business they thought he was
involved in. The students responded that he was obviously
involved in selling hamburgers. Correcting them, Kroc
said that he was actually involved in real estate deals.
McDonald's is one of the largest real estate owners in the
world. The real estate assets of the restaurant chain have
made Kroc a multimillionaire.

Our profession is different from our business. Most of us

work - with our profession - to make money that will not
last long and will make business owners rich. In the
process, we ignore our own business. Our business is
about our assets and not our income. The assets that can
make our business grow without us having to work
include stocks, options, real estate, mutual funds,
promissory notes, and royalties. To become rich, we must
focus on our business as well as our profession.

We should focus on the development of solid assets.

Young workers who still live at home with their parents
should be encouraged to strengthen their assets before
they leave home and start living on their own. This will
help them survive future financial crises when they decide
to buy a home, marry, or increase their credit card
purchases.

It is better to select the assets that we love. Again,

financial knowledge can help us choose assets that match
our personality and interests. We must continue to work
on our jobs, but we must also find time to invest in assets.
Finally, we must be careful not to spend money on
superfluous things before we become rich, but wait until
our assets have yielded enough money.

The Rich Can Pay Fewer Taxes

The debate that the rich should pay higher taxes than the
poor has existed for decades. While the story of Robin
Hood - who robbed the rich to feed the poor - is no more
than a novel, in the real world this notion can produce
negative effects for the middle class. To understand this,
we need to study the historical perspective of taxes.

Before 1874, citizens paid no taxes. The government

collected temporary taxes only during times of war. The
income tax laws came later. Most targeted the wealthy,
who could easily pay taxes. However, after the middle and
poor class voted in favor of taxes, believing they would not
be affected by it, the government changed the situation
and charged taxes in all economic classes to increase its
revenues. Tax money was then directed to government
workers and the rich through public contracts with
corporations.

The rich do not suffer from taxes since they can find legal
ways not to pay the full amount they owe. One of the ways
to do this is to create and own a corporation, which is no
more than an existing legal entity to reduce income tax
legally. The rich then pay their taxes as a legal and non-
physical person, and so the rates are lower. Corporate
owners pay for their expenses before paying taxes, while
middle-class employees are first taxed and then pay their
dues. A corporation also keeps the personal and business
money separate. By doing so, it provides legal protection
against legal proceedings by creditors, since the law does
not consider the owner personally liable for business
debts.

If you own a business or accumulate assets over time, you

can form a corporation and use it to pay expenses, save
money on taxes, and protect your personal accounts from
lenders. However, managing the corporation effectively
will require financial knowledge, which we must develop
by learning about accounting, investments, and law.

Value Your Mind And Not Money

Doubt and lack of self-confidence prevent you from

overcoming the limits of your intelligence. If we do not
have the courage, even our technical knowledge is not able
to help us maximize our wealth potential. To avoid being
always conservative and worried about risks, you should
focus on studying and getting to know finances. This
opens up many options and helps you create your own
opportunities instead of waiting for them.
Valuing the mind instead of money has helped many
people to make millions using smart financial strategies.
Our mind is our greatest asset. Using it to increase our
financial knowledge can generate many profit
opportunities, such as buying a property during a crisis in
the real estate market - at a time when everyone is afraid
to invest - and selling it at the right time with substantial
profits. We can also apply our financial knowledge to
efficiently manage risk - which depends on the type of
investment.

The investor who builds his own portfolio is closer to

becoming wealthy than the one who buys investment
packages. To be successful investors, we must identify
opportunities neglected by others; Explore creative
strategies; Work with smarter people than you and choose
your mentors wisely.

Make Smart People Buy Your Idea

The most talented people are not necessarily those who

make the most money. The difference between a talented
writer who has sold a modest number of books and one
who is not so talented and wrote books on the bestseller
list might just be marketing. The key to monetary success
is not just the talent and hard work, but the financial
intelligence and tricks that drive people to buy our
products. Young people should not only work to earn
 money but to learn new skills that they can apply in their
dream professions. Similarly, adults may have a second
job to expand their knowledge and become better
entrepreneurs.

Good communication, marketing, and negotiation skills

can not only help us sell our business successfully but can
also make smart people buy the idea. Those who have
technical skills but are not good communicators should
consider improving their communication skills. More
than specializing in one area, working for a lifetime on a
job and doing the same thing every day, moving from one
job to another that offers better learning opportunities
can expand our skills and increase our earning potential.

Also, cultivating communication skills can help us manage

people, systems, and money more competently.

Attitudes That Prevent Us From Getting Rich

The five reasons that prevent financially intelligent people

from building assets are fear, cynicism, laziness, bad
habits, and arrogance.

 Rich people have already lost money at some point. The

best way to face the fear of losing money is to start early
and plan. Our failures should inspire us and not afflict us.
 We must stop suspecting all investment opportunities as
we are risking losing great opportunities.
 We can eliminate laziness and greed by asking ourselves
what we gain by investing.
 Rich people pay themselves first because it forces them to
find creative ways to earn additional income and pay their
bills. This is a better habit than paying your creditors first.
 Many finance and investment professionals may not know
much about money. They use arrogance to mask
ignorance. It's best to be humble and learn about money
instead of pretending to know everything.

Maximize Your Profit

These are ten steps to waking up the financial genius

within you:

 Identify the reasons why you want to become rich and

what you no longer want to do - such as not wanting to be
an employee of someone, for example - and use those
reasons to motivate you to keep trying.
 Choose how you want to use every penny you earn. You
have the power to spend it or invest it - the choices you
make will determine whether you will be rich, poor or
middle class. Time and education are two important
assets for you to use. Each day is a new opportunity to
have more financial knowledge, so make a productive use
of your time to find new opportunities to earn money or
acquire financial skills.
 Keep friends with people who can teach you valuable
lessons about money. This does not mean that you should
only have rich friends, but rather that you should seek the
knowledge by interacting with people who have
successfully dealt with your wealth.
 Make sure your financial education has a
multidisciplinary approach. Do not try to learn a formula:
you should look for strategies to get your job done faster
or help you make quick adjustments when the rules of the
game change.
 To build good assets, give yourself the priority and not the
creditors or the government. This does not mean that you
should be financially irresponsible, but rather that you
need to cultivate self-discipline to avoid huge debts. If you
get into debt, you should not pay off your investments or
savings, but face them as a challenge to generate even
more money.
 Research brokers and make thoughtful decisions. Find out
if they are investors too; If they are not, avoid hiring them,
as they may not have enough experience to guide you. A
smart broker will help you to be rich, so pay him/her
fairly.
 When you are considering investing in an asset, ask
yourself how long it will take to get your money back.
Whether you are investing in the stock market or real
estate, you can get your money back and then wait while
 your stock/property gives a return. If you can do this, you
will have bought an asset that produces income for free.
 Use your want to buy luxurious items as a motivation to
find new ways to buy assets. If you are in the habit of
relying on credit cards to buy luxurious items, it will
indebt you at one time or another.
 Find great investors like Warren Buffet or Peter Lynch to
inspire you and to understand what they've done to make
millions.
 Be generous with your time, wealth and love. The law of
reciprocity will ensure that anyone you help will help you
when you need it.

Be Bold And Start Immediately

In addition to the 10 habits, there are also some steps you

can take right away.

 Examine your life to see what is working or not.

 Look for new ideas; Find a new book to read; Learn new
formulas.
 Find someone who is successful in your area of interest.
Invite him to lunch or ask for tips and ideas.
 Invest in lessons and videos.
 If you are looking to invest in real estate, make lots of
offers - someone can increase them. Walk through the
new neighborhood, ask yourself and look for clues to find
out whether or not it's a good place to invest.
 Think big, invest in big opportunities instead of going
after the small opportunities.
 Act quickly when you identify opportunities.

Final Notes:

We are dependent on our profession to have income,

using it to pay the bills, to buy a house or to spend on
superfluous things from time to time. No wonder most of
us are not rich. The rich focus on building assets and
continuing to generate money, which they use to create
more assets. You should aim at having more assets and
not simply a higher salary.

To accumulate assets, we need to invest wisely. Before

doing this, you need to be financially savvy, which can be
very complicated since schools do not have financial
education and even the most intelligent professionals
know little about money. So you should begin to
understand the basics - the difference between assets and
liabilities and whether mutual funds are as safe as they
say - while also updating your financial knowledge
through books, lessons and interactions with people who
have made money work for them . Investing requires both
emotional control and technical knowledge.

Direct your cravings to generate extra money, accept that

some flaws are inevitable, be open to learning new things
and improve your marketing skills and surround yourself
with smart people.

Pay yourself first to feel inspired and find new ways to

generate extra money. Do not hesitate to try and take
quick action not to miss opportunities.

12min tip: If you liked this book, how about you start
organizing your personal finances? There are several free
apps for this that help you a lot when ordering your
money. Here at 12min, we recommend Mint.