Saturday, December 09, 2006

Rich Dad Poor Dad

The best selling book Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money--That the Poor and Middle Class Do Not! by Robert T. Kiyosaki, I read this book few years ago and I’m not sure if I can remember exactly the content of this book. As far as what I can remember, there are 2 most important things in this book. They might have more but it seems like I only can remember these 2. So, I think the rest of the points in this book are not important. Perhaps I should say not the key points of his book.

First thing, he told us don’t go to school if you want to become rich. Why? Our education system is pretty good to produce employee, but not the other way. The education is design to teach how to work for people and not people to work for you. Most importantly as I said before, school to not teach how to manage your personal finance wisely. This is kind of true at least in my country, Malaysia. I believe it also applies to all the country around the world. When you look a round, the really rich guy is the “Business Man” and most of them do not have the highest education qualification. Hey, what’s wrong? The book explains what’s wrong. Some of the readers may misunderstand this book as “If I don’t go to school, I will become rich.” This is definitely not right. Do you know 90% of the people who do not go to school fail getting rich? Not only rich and majority are even living below average. No matter you go to school or not go to school, the effort for you to become rich is the same. It is a matter of going to school is in comfort zone and therefore you’re not pushing yourself hard enough. This is my opinion.

Second thing, Robert also has a definition of an asset versus a liability that is different from conventional accounting. Simple stated, assets generate income or cash and liabilities consume cash. Rich people accumulate assets. People who aren't rich accumulate liabilities. For example, a car, a boat are actually liabilities as they consume cash. The real assets are such as stocks, bonds, tax lien certificates, rental real estate, and other investments. They generate income or cash (e.g. dividend, interest, value appreciation). He also acknowledges that it is possible to use the principle of compound interest and regular saving to achieve financial independence. He also stated the problem with this approach is it's a long, patient one and most people get started too late for it to work.

As a conclusion, they are many ways to get rich. Rich Dad, Poor Dad explains the way to get rich in his opinion. However, keep in mind that it may not apply to you. Read this book and take the important messages which can be applied to yourself to achieve your own financial objective.


aldrin said...

one way to become rich is through is here

ChampDog said...

Become rich through internet seems simple but in actual fact, it requires a lot of hard works and patients. If you get can rich without much effort, the profits that you will not last longer. If it can last long, then you probably are doing something illegal (e.g. Scam, HYIP and etc.)

azwad said...

Very good blog!

Bro, join us here.

I also write about personal finance in my blog. The posts are tagged "money". I also put some of my posts at the facebook group above.

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