Generally speaking, a Rich Dad is someone who has financial literacy and is a good investor. A Poor Dad, on the other hand, may be someone who does not have these skills, but has money that is working for him. If you are looking to be rich, you should definitely focus on learning financial literacy and how to invest in assets.
Focus on education
Almost all people believe that a good education is the key to success. Those with high educations are often better at handling their finances than those who have less. Moreover, those who have less knowledge are often viewed as a waste of time. In fact, there are many smart students who struggle to handle their finances.
However, a better education is not about knowing all the things. Instead, it’s about learning the important things. The focus of education is on learning a few specific things that will help you get a good job, or to keep you employed. Often, the best education is not in a textbook, but rather through real life experiences.
Financial literacy is the key to wealth
Having financial literacy means having confidence in your financial decisions. It also means that you know what to expect, which will help you to avoid making costly mistakes.
Financial literacy is a skill that can be developed at any age. It can help you set goals, save money, and avoid debt. It also can help you understand how investments work and understand the impact they can have on your credit score. It can also help you prepare for emergencies and protect your finances.
It is estimated that about 40% of Americans spend up to half of their monthly income on debt payments. These unsustainable debt burdens can be caused by poor spending decisions and lack of long-term planning.
Wealthy people have money that works for them
Unlike the middle-income Americans, the wealthy understand how to make their money work for them. In fact, they have a completely different attitude toward money. They don’t chase get-rich-quick schemes, but rather they follow a plan that works for them.
The self-made wealthy take time each day to think about what they want out of life. They spend 30 minutes in a quiet space and think about their career goals and relationships. This critical thinking time is crucial to staying ahead of the market and anticipating change.
Another way that the wealthy make their money work for them is to make sure they have enough liquidity. This means a savings account and an emergency fund. These two accounts should be able to cover six to nine months of expenses. This way, they can enjoy small splurges without having to worry about not being able to pay their bills.
Assets are different
Historically, the biggest financial investment you can make is your home. However, the fact that it is an asset doesn’t mean that it is going to increase in value. This is the same reason it’s important to know the difference between an asset and a liability.
Kiyosaki’s book Rich Dad Poor Dad is a motivational guide that explains how you can become rich without spending all your money. In the book, Kiyosaki explains how to invest your money in a way that it will generate more money for you in the future.
He says that the most important thing to learn is how to identify assets and liabilities. This is important because it’s easy to lose track of what you own and what you owe.
Robert T. Kiyosaki
Having a rich dad is not a prerequisite for being rich. The difference between the rich and the poor comes down to mindset. Basically, rich dads are the ones who take charge of their financial lives and poor dads are the ones who depend on their employers for their financial well being.
Rich dads invest in income-generating assets. They buy real estate and small-cap stocks. These are investments that help them build their wealth. The poor, on the other hand, spend money on liabilities.
Rich dads also have a higher education. One father earned a Ph.D., and another completed an undergraduate degree in two years. Regardless of their educational qualifications, both fathers suffered financial difficulties early in their careers.