Rich Dad, Poor Dad: Do You Have Financial Freedom?

Rich Dad, Poor Dad. You have probably either heard of this book, read the book or scanned through it, depending on where you were in life when you found it. The copy I read is a very old one. You know, one of those books that are browned with age, with some other weird spots that tell you the book has been through several shelves to get to your hands? That one. It even had an old American Library Association bookmark. I told a friend I had decided to read it and she immediately remarked that the author is a scammer. Uh-oh.

So it’s with that attitude that I dug deeper into the book. One thing this book does very well is to tell you how the school system does not teach us about money. And if you think about it, it’s true. What were we taught about money in school anyway? How to count it? How to balance it on a ledger? How to borrow? Interest rates nini nini. Money orders? Lol. But who ever taught me about stocks and bonds? Investing? Saving? Credit cards? Credit scores? No one in school. These are some of the things we will be talking about in this blog.  

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And even beyond that, you grow up knowing that your only way out is education and employment. And education is just books. But really. Is education just books? One thing is very clear, education is more than books and exams. We’re learning everyday out here. And it’s never too late to break out of a cycle that is not helping you exploit your potential — jump out of the cocoon. I think one thing undergraduates take for granted when graduating is the phrase “power to read”. If you think about it, it could very well mean that all you have learnt is how to critically think and how to read going forward. You are starting from 0 as you transition into the next phase of life. Learning never stops. It just gets enhanced. 

Here are some of the thought-provoking statements that Robert Kiyosaki tables for us.

Let money work for you, don’t work for money. 

Easier said than done. Good to know for a start, because, let’s face it, you need to work for money first, and then let it work for you.

The simplest trick to hack this rule is to SAVE 10% of all the money you make. If you earn a regular income, ensure you are saving at least 10% of your gross salary in a separate account.

NEVER touch this money for expenses. Build savings first to cover any emergency that may arise in future (before investing). Do not invest if you do not have cash to cover 3 – 6 months living expenses saved somewhere. After you have the cash, it is then that you can start investing the additional savings. 

Understand the difference between Income, Expense, Asset, Liability 

If all you do is earn (income) and spend (expense), earn and spend, then there is no way in the world you’re going to have money that works for you. 

As for assets and liabilities, the line can be very thin unless you really focus on real assets. One great point is owning businesses or revenue streams that do not require your presence. Investing in shares and bonds. Buying unit trusts. Income-generating real estate. Buy Bitcoin.

Work to learn

When you are honest with yourself about why you work. (It’s definitely for the money (don’t be modest), then you need to work to learn. Always be learning. 

If you are not learning anything new anymore, it’s time to rethink your line of work.

Be salesy

Are you afraid of sales? 

I remember always fearing sales in my last employment. I had always gone in with the notion that sales is hard. Probably because I was looking at people selling things that couldn’t sell themselves in the first place. But when I can think about it after this book, I have always been selling. From blogging to customer service, that is always part of the buyer’s journey. Some of the most successful entrepreneurs in the world make their companies what they are because they sold the idea passionately when no one else believed in the dream. 

We need the two types of people in the world anyway. Specialists and salesmen. But why can’t you be both?

Fun facts

Did you know that income tax was not a thing before the 20th century? 

Apparently, the reason everyone accepted them is because they were convinced they would only affect the rich, not the poor and middle class. Well, down the line, the rich have devised many ways of going around that. Fair? Unethical? We’re still pondering that question.

“Wealth is a measure of a person’s ability to survive so many days forward.”

R. Buckminster Fuller

Ray Kroc. Another guy who makes you think about entrepreneurship and drive. He made McDonald’s the behemoth it is today. But guess what? He was not the founder or the originator of the ideas behind the chain. If you have never heard of him, find this book: Grinding It Out. If you are not into reading, check out the movie The Founder. It’s on Netflix.

So are you financially free? What steps have you taken to live financially stress-free? This space will cover various topics around this subject and help you enjoy financial freedom. 

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