Thursday, 8 March 2018

RICH DAD POOR DAD : Book Summary (How To Become A Millionaire)

Hey friends today I am going to tell you a key for getting rich which deals with the fact why only few people get really rich and why most of the people die living poor or a middle class life.

…Lets begin with a story of Robert who had two fathers . One had PhD degree and the other never finished his eighth grade. BOTH were very smart and hard working but had very different point of views regarding success and they gave different teachings to Robert.

One said that money is the root of all evil while other said lack of money is the root of evil , one always said we can’t afford expensive things while the other told Robert to find ways that how can he afford it . as that exercises the brain to come up with ideas . one told him to study hard and try to get a job in a big company while the other told him to study hard and try to open his own company and create jobs,

Robert had An advantage as he had  dads and saw both of them grew from his childhood . He used his logic and followed his second dads advices who later became the richest man in Miami. And With his teaching Robert kiosk himself became multi millionaire, while his st dad kept on struggling financially throughout his life.

One of the most important key for success which Robert got from his rich dad was financial
literacy Which is knowing the difference between assets and liabilities Now listen carefully he gave a really simple definition for them i.e.

Assets are anything which makes money for you and liabilities are things which take money away from you...

The reason rich people are rich because they acquire assets while the middle class just buys liabilities.

E.g. there were two friends bob and bill both working on a same post with same salary.. As soon as they got their salary bob used to go and buy stuffs like the latest cell phone, cool gadgets, branded cloths, shoes bike , or things like that which would make him feel good and rich but he failed to think that these were just liabilities...As they took his money away from him not just while buying it but also in the future for maintenance etc even kept losing its value with time and did not returned any profit...

But bill did not bought all that things unless it was really necessary. he used to save money and spend it on assets like bonds stock real estate or In developing his own skills etc which could generate income for him in future and make money.

After  years bill became millionaire while bob kept on struggling financially and blamed his low salary for the reason of his struggle.

The cash flow of poor people goes something like this they get income and then they have expenses which eats all their income For the middle class the income goes into expenditure and liabilities which they think are assets.

Example: Most of the middle class people think that the house they own is their asset but that is not true as the house does not put money In their pocket or make money for them, it is just a liability unless they give it for rent. the rich class on the other hand spends their income to make assets which in return make money for them and then they mostly spend expenditures from that income.

So by doing this they continuously grow and keep getting their sources of income increases . .if you really want to get rich let this simple idea fit in your mind. It’s not the amount you earn but the amount you keep...

You have to shift from a consumer mentality to an investor mentality. People keep on complaining that they should get better income which would improve their life but the problem is even if their income increases It will just increase their expenditure as high income will make them desire to have a better house better car etc ..which again are just liabilities that will keep them away from getting rich and struggle financially.

So to conclude its not how much money you earn but how you spend it will make all the difference.

These concepts are taken from Robert kiosaki the aurthor of rich dad poor dad . this was 1st book that I read which changed my perspective towards various aspects of life I think you should definitely read it once , ..


Thanks for Reading.

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