Rich Dad Says…

Robert Kiyosaki, a fourth generation Japanese-American, a well know tycoon in financial education of this generation, a renowned author of the best selling book Rich Dad Poor Dad and the series of books that followed, has touched a delicate aspect of human life where one attempts for the better financial achievement along with health and peace. In his uniquely simple, yet professional technique, he has put forward the very essence of ones life. For him preaching financial intelligence amongst the masses is as important as providing the basic education. He also criticizes the schools for averting our society from such teachings. Following are few note-worthy tips advocated by him.

…a person may generate income by being an Employee, or by being Self-Employed, or by starting his own Business, or by operating as an Investor. He represents this in a diagram made up of four quadrants. While all four quadrants have its merits and limitations, none is better than another. The person may operate in either of them to make a better living. Each has its own measures of success and failures. An individual’s decision to work-out in either of the quadrant depends mainly on the core values he possesses. The strength of dream and the will to sacrifice plays an important role in success of a being. In his book Rich Dad Poor Dad, Robert throws light on the reason for people choosing the comfort quadrant and grounds for their success and failure. The Employees and the Self-Employed earn their income from their jobs and spend it over expenses while the Businessmen and Investors generate it though asset holdings.

…the phrase “Go to school, get good grades, and find a safe, secure job” is absurd in today’s fast growing and ever-evolving world. The advice stood good during the industrial age. But the changing times of Information age has proved otherwise. Schools do not teach the vital subject of money as the teachers could barely preach them to students. Hence, the students are deprived from the financial freedom. Robert tutors the financial aspect through books, seminars and board games.

…Robert entices people to know the difference between an Asset and a Liability. He explains an Asset as the holding that puts money in your pocket and the Liability as that take it out. Contrary to the general belief Robert argues that a person’s house is his Liability, as it burns his money with the day-to-day expenses.

…it is quintessential to make it a habit of paying yourself first. This means to treat your investments as top priority expenses and habitually pay them first. The monthly bills and other intrinsic expenses must give way for them. Robert challenges to have about 30% of your income get into investments on a monthly basis. His noble advice is to keep the expenses down until the investments reap results.

…to gain financial education means to gain understanding of one’s cash flow statement. The Cash flow statement portrays the sources from which the income is generated and the various ways it is taken out. It states whether the income is passive (generated through investments) or generated from the four quadrants. More passive the sources, better is the financial understanding and near is the financial freedom. An investment may be done for generation in cash flow or for the capital gains. Robert recommends to be sure of the rationale behind it.

…in the game of money, says Robert, to find a mentor. If the monetary figures terrorize you, find an expert who is wholeheartedly willing to scale up your knowledge and investment. He persuades to gain knowledge by reading financial journals and attending seminars. In the times of Information age, one has access to tremendous stock of knowledge. Only the appropriate source has to be found. Robert also cautions against the agents who are always on hunt of your money.

…by following the simple steps one may climb up the financial ladder. Money is something that can be your supervisor and also can it be your subordinate. Today the education system has made plenty of subordinates. But if one gains knowledge and becomes smarter, he can be the supervisor and make money work for him. Wealth, describes Robert, as the time your money can help you survive if at all you stop working for it.

Although, this is a glimpse of a floating iceberg, I urge you to gather more information about Robert Kiyosaki and his teachings by reading his books. His books namely ‘Rich Dad Poor Dad’, ‘Cashflow Quadarant’ and ‘Increase your Financial IQ’ are a must seen over your bookshelf.