Wednesday, November 24, 2010
Rich Dad Poor Dad
I am almost done reading this book, Rich Dad Poor Dad: What the Rich Teach Their Kids About Money-That the Poor and the Middle Class Do Not! in 2 days, any book that's principle driven, easy to read with storytelling tend to become my favorites, this is one of them.
I have tried reading harder books on finance and just end up dropping them because it's so dry and boring. It is still important for a book to be entertaining while trying to teach. So I highly recommend this book.
It's not one of those "how to get rich quick" book, it's not about method, but mentality. Methods change, mentality doesn't. The right mind seeks the right method and can deal with changing times. I value the lessons in this book.
A few important points on this book is---
"I can't afford it" is a lie that shuts down your brain from thinking.
One should think "How can I afford it?"
Opportunity comes to those who think.
1. Money is not real, to be rich it starts from your mind, having more money doesn't make you rich, it just enlarge your management scope and the problems already hidden in it. You can be broke, broke is temporary, rich and poor is a permanent mind set.
2. Don't work for money, put money to work for you, understand the financial system and take advantage of it, don't let the financial bullies push you around.
3. Don't get trapped in your hamster wheel, understand assets and liability
---assets- things that brings in money
---liability- things that cost you money to maintain
Ex: A lot of people just go and get a bigger house when they have more money thinking it's their assets, but it's not, it's their liability. Assets bring in money, so if it takes money away, it's liability.
4. Always buy more assets, never dip into savings to pay bills
5. Take risks, don't be afraid of losing, learn and be inspired by it. It's better to be passionate than fearful, control fear. (I admit I am quite a loser, i need to start changing my attitude about losing.)
6. Work to learn, don't work for the money.
7. Lazy people are busy people- too busy to learn is an excuse for laziness. The cure for such laziness is to be a little greedy. (crap, I'm lazy?!)
8. Self doubt is what stopped a lot of people from getting out of their financial trap. Taking steps to get rid of self-doubt is a needed education.
9. Set goals for yourself higher than your reality.
And much more, most told in a story form.