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Robert Kiyosaki rich dad poor content. Rich Dad Poor Dad by Robert Kiyosaki

I continue to acquaint you with popular and interesting literature on financial literacy and today I bring to your attention a review of the book Roberta Kiyosaki "Rich Dad Poor Dad". After reviewing this publication, you will learn the summary and essence of the book, its main ideas and messages, understand what it is about, and if you wish, you can always buy or download the full version.

Kiyosaki wrote Rich Dad Poor Dad at the age of 47. It was his first book, it also became the most successful and brought him worldwide fame as an author. The main idea of the book is a comparison of the way of thinking of two dads: poor (this is Robert Kiyosaki's own father) and rich (this is the father of his friend).

It is noteworthy that almost until the moment of writing the book “Rich Dad Poor Dad” (and this is a very big part of life), Robert Kiyosaki himself was a chronic loser: his attempts to open a business repeatedly failed, he had huge debts and sued creditors. His future wife, Kim Kiyosaki, helped him get out of this state: she believed in Robert, helped him pay off his debts, and they began to build a joint business. .

Rich Dad Poor Dad Book Summary.

One pattern can be observed: At the same time, people who can be attributed to the middle class seem to have everything necessary for life, but do not get out of debt, making all purchases on credit. The reason for this state of affairs is the financial outlook of different segments of the population. Children learn the basics from their parents, not from teachers at school, and as a rule, in adulthood they follow the example of their parents, trying to repeat their life path.

"Poor dad" - Kiyosaki's father, has the mindset of an employee. He received a specialized education, was an intelligent person, worked in government institutions, had extensive work experience, built a career, but at the same time constantly struggled with financial difficulties. Of course, he wanted his son to repeat his path.

“Rich dad” - the father of Robert's best friend, did not even finish eighth grade, did not work in the traditional sense, was not focused on serving a particular profession and career growth, but at the same time became one of the richest people in Hawaii. And he also offered Robert to go through his life path like this.

Robert equally appreciated the opinion of the two popes, so it was difficult for him to make a choice. He grew up surrounded by two adults who were authoritative for him with completely different views and felt the influence of both on the formation of his own worldview. As a result, he still chose rich dad.

The state in which his poor dad is, Robert Kiyosaki calls the "rat race." That is, the constant running to and from work, the constant hectic performance of their work tasks in order to get a salary, spending everything they earn and repeating these monotonous actions in a circle throughout their lives. For life, the rat race exhausts a person, exhausts, undermines his health. If you wallow in them, a person will forever remain in poverty.

What's stopping you from breaking out of the rat race?

Fear and greed. Poor people are always afraid of being left without money - fear works here. And when they have money - they immediately seek to spend it - greed turns on. These negative emotions thus hold power over poor people.
. Talent and ability do not lead to wealth (there are many very talented people in the world who remain poor all their lives). To become rich, you must first of all be financially literate.
Lack of self-education. Poor people receive a specialty, a profession, and they believe that it will “feed” them all their lives. By this principle they live and work. But in order to become rich, you need to constantly engage in self-education: acquire new and relevant ones.
. People are afraid to follow a path that is different from the generally accepted one, because in this way they can be condemned by society (including close people, relatives, friends).

So what is it that separates a rich dad from a poor dad? What does each of them teach their children? What ideas does he instill in them? Both dads of Robert Kiyosaki were hardworking people and worked diligently throughout their lives. However, there was one significant difference between them: in their attitude to money.

Poor dad told his son that you can’t love money, that it’s bad, and rich dad thought that it’s bad to not have money. Both dads behaved differently in life situations, one way or another related to finances. Here are the key differences, oppositions that can be found in the book:

Difference 1.“I can’t afford it” was often in poor dad’s vocabulary. Rich dad strictly forbade the use of this expression. He advised to put the question in a different way: “How can I afford it?”.

The first phrase is, in fact, an excuse for one's inaction. After it, the brain relaxes and switches to something else, while the second phrase, on the contrary, stimulates the brain to work on solving the problem.

Difference 2. Another life message of poor dad sounded like this: “Study more to find a good company to work for!”. Rich dad completed this thought differently: “Study more to find a good company and buy it!”.

Difference 3. Poor dad said, "I can't get rich because I have you kids." Rich dad phrased it this way: “I have to be rich because I have you kids.”

Difference 4. The poor dad warned his son: “Be careful with money, act only for sure, don’t take risks!”. While the rich had a different opinion: “learn to take risks!”.

Difference 5. Poor dad was convinced, "Our home is our biggest investment and our most important asset." Rich dad thought, “My house is a liability, and if your house is your most important asset, you are in poverty.”

Assets and liabilities in the book "Rich Dad Poor Dad" by Robert Kiyosaki pays a special place. From his point of view, an asset is something that brings profit to its owner, and a liability is something that entails expenses. For example, the property in which a person lives, or the car in which he drives, is a liability. And if the property is rented out or the car is used to provide paid services, then it is an asset.

The goal of a rich person should always be the accumulation of assets - they lead to wealth. While poor people always accumulate liabilities, acquiring them even at the expense of loans.

Here are some more interesting thoughts from Kiyosaki's book Rich Dad Poor Dad:

If a poor person is given a million dollars, he will not become rich. He will become a poor man with a million dollars. Most likely, he will quickly spend money, having bought himself a lot of liabilities.
A poor person solves a narrow range of problems, looks at problems very narrowly. A rich person thinks strategically, considering the goal from the perspective of a manager, not a performer.
A poor person perceives failure as a punishment, while a rich person perceives it as a useful experience.

But the biggest difference between rich dad and poor dad was this. Poor dad said, "I'll never be rich!" and he was right. And rich dad said, “I’m a rich man!” and he was right too.

Rich dad was also convinced that a rich man would not claim that he would never be rich. Even when he was bankrupt, he continued to treat himself as a rich man. He argued that there is a big difference between being poor and being broke. Because ruin is temporary, but poverty is permanent.

The conclusion is simple. Poor dad was poor not because he didn't earn much, but because his poverty was the result of his way of thinking and acting. Thoughts have a very great power over a person, so you need to be extremely careful with them! You need to be aware of their significance and control your thoughts.

This is the summary and main ideas of the book Rich Dad Poor Dad by Robert Kiyosaki. This book is recognized as one of the best books for teaching financial literacy, so if you want, you can always buy or download it to read it in its entirety.

On this I say goodbye to you. The website is your guide to the world of financial literacy. Add to bookmarks, subscribe to official pages on social networks, follow updates, read, analyze and put into practice the information received. Be financially literate and strengthen your financial condition. See you soon!

Probably it was worth talking about this book at the very beginning of this blog. But what I see is that many more people are not familiar with Robert Kiyosaki and Rich Dad Poor Dad, which was one of the first in a series of his famous bestsellers.

The book has helped millions of people around the world improve their financial lives.

The same book was one of the first in a series of business books that started my financial self-education. It was she who helped me fall in love with reading business literature and made it clear that this is a prerequisite for growth in all areas of life.

Since then, I have not only begun to actively read books by famous businessmen, investors and successful personalities, but also actively work on my financial education. Incidentally, the term financial education often mentioned in the book Rich dad, poor dad”, however, it is served in a completely different way than we used to imagine it.

For many people, financial education is associated with the economics department of some prestigious university.

But for Kiyosaki, this is a completely different concept. According to the book, he received his financial education from a rich dad who dropped out of high school at 13 and went on to become a millionaire, investor, and business owner.

Financial education is the knowledge of how money works. What does it have to do with such knowledge that will allow you to make money work for you, and not you for money.

The book is interesting primarily for the presence of very vivid and intelligible comparisons, which were achieved at the expense of the main characters - rich dad and poor dad.

According to the story, poor dad is the real father of Robert Kiyosaki. And rich dad is the father of his high school friend, a local businessman, whom the guys turned to with a request to teach them how to become rich.

By the way, the poor dad of Robert Kiyosaki was not so poor. He received an excellent education, was a Ph.D., began his career as a simple teacher and grew to the head of the department of education of one of the states.

His poverty was determined primarily by his mindset and meager knowledge in the field of finance, which his pride prevented him from studying. As a result, all he got by the end of his life was a meager teacher's pension and the need to work to make ends meet.

The difference in worldview is clearly seen in the judgments of the two fathers of Robert:

As you can see, even in these few quotes from the book, there is a difference in the thinking of the two fathers from whom Robert Kiyosaki learned financial literacy.

Right thinking is one of the key characteristics of successful people. And this is the first thing that I began to change in myself after reading the book.

Kiyosaki got a lot of negative critics, which, in fact, is inevitable if a person becomes popular and famous. There will always be people who will accuse him of repeating well-known truths voiced earlier by other people.

Many criticize him for accusing traditional education that it is outdated and does not meet the modern requirements of life. It is that modern education prepares workers and kills the opportunity to develop creative thinking, which is vital for bright, extraordinary individuals who are able to go against the crowd, develop fantastic businesses, create amazing products and services.

I have already voiced my view on higher education more than once in various articles on this blog. In particular, I talked about .

Another big discovery for me in the book "Rich Dad Poor Dad" was such concepts as Active and Passive.

Assets is what brings you money.

Passive is what takes money from you.

Examples of assets are:

for which we receive money, such as books, music, software, etc.

Examples of liabilities are:

The property in which we live;
A car, if it is not a worker, which helps you make a profit;
Garage that does not generate income;
Borrowed money, etc.

There are moments in the book that are certainly difficult to apply in the realities of the Russian market. For example, not everything is so simple with real estate. The author writes that he made a fortune on this. In our country, the entrance ticket to the real estate market is too high and not many can afford it.

Also, there are many impressive examples in the book, but it is not at all clear how this can be applied in Russia. For example, the author writes how he invests in speculative private companies that resulted in $25,000 invested in less than a year. grow to a million.

Agree, a very tasty example? I just want to earn $ 25,000, especially since it is not as difficult as it might seem and invest in some similar project in order to earn about a million dollars a year. However, questions like: “Where can I find such a company?”, “How to understand that this is not a scam and a scam?” etc., will remain unanswered.

However, this does not detract from the merits of the book "Rich Dad Poor Dad."

After reading the book "Rich Dad Poor Dad" I became actively interested in the topic of personal finance and. I realized that I didn’t want to work for someone until I was old and then retire and receive tiny handouts that would barely be enough to make ends meet.

Now, after about 5 years after reading the book “Rich Dad Poor Dad”, I can say that it greatly influenced my future.

P.S. Earn money from the comfort of your home by giving people a link to this free note! Get a special link in the "Links and Products" section of your affiliate program account -

P.P.S. I would love to hear your thoughts on Rich Dad Poor Dad. What impression did she make on you? What has changed in your life since reading it?

I read here the other day "Rich Dad Poor Dad": it is easy to read, but at the same time it makes you think about your relationship with money.
Quite a lot of water and repetition, through which the main theses shine through:
- invest in assets, not liabilities (i.e. understand the difference between them) - this is the key point of the book
- start your own business
- constantly learning
- overcome yourself (especially fear and laziness, develop self-discipline)

For more details, here is a summary. I write for myself, but maybe someone else will be interested.

in schools we are not taught how to handle money (why - they are raising a society of consumers), so the only place where we can theoretically learn this is our family and close people. but they also do not know how to handle money, not seeing the difference between assets and liabilities, because from generation to generation have themselves been poor/middle class. he even gives an example: if 100 people are given 10,000 dollars each, then in a year 80 will spend every penny and even get into debt, 16 will increase them by 5-10%, 4 - at times.
more salary - more things are bought for a greater cost. i.e. working harder, harder, etc. we don't actually get richer. spending increases in proportion to wages, and the "vicious circle" of job dependency remains in place. how to get out of it?

- you need to invest in assets (they bring money), and not in liabilities (they take away money)
while investing in assets that you like. if you don't like stocks and stock markets - look for something to your liking.
the schema is:
income
expenses
assets liabilities
assets replenish income, liabilities - expenses.
liabilities are payments on credit cards, mortgages, etc.
this is my example, but I think it will reflect the main idea: a car just bought for the home is a liability, because. you constantly need to spend money on it (gasoline, maintenance, repairs, insurance, etc.), if this car is rented out and the profit exceeds the cost of the car, then this is already an asset.
most people consider buying a house, a car, a yacht, and everything in general a good investment of money, although in reality it is not:
1) immediately after the purchase, many of these acquisitions lose value (i.e. you bought a car, left the salon, and if you immediately want to sell it, you will do it at a price lower than the salon price, since the car is already considered used) , and over time, use depreciate more and more,
2) many require further infusions of money - this is like an example with a car. the author himself is engaged in real estate, therefore, often as a liability, he cites as an example a house for which you need to pay property taxes, and also a monthly "rent" that is huge by our standards, it can be 2 and 3 thousand dollars - the larger the house, the more it is .

- start your own business
you don't have to quit your job. profession and business are different things (example: profession - teacher, business - private school)
business is something that brings money, regardless of your presence, if you are forced to be there, this is already work.
you need to start with this:
1) do not increase spending (the rich buy luxury last, and from the money received with the help of assets, and the poor and the middle class - first, to create the illusion of wealth)
2) try to reduce liabilities
3) start building a foundation of assets
It is important to be able to manage:
- cash flow
- people
- personal time (and systems in general)

- constantly learning
1) develop your "financial IQ"
this includes
- accounting, i.e. financial literacy,
- the ability to make investments (there are certain formulas, you can learn them) - not to save money, but to invest.
- market knowledge
2) work not for money, but for experience
know a little about everything. learn to count, sell, manage people, etc., focus not on making the best hamburger, but on how to sell and deliver it, even if it is mediocre.
In general - go to courses, read books, listen to lectures and generally be in the know (for the latter, it is ideal to hire literate people who know more about something than you)

- always asking questions
"How can I afford it?" instead of "I can't afford it"
And
"Where am I moving?" "What will it give me in the future" instead of living from salary to salary, which creates a sense of stability (although in reality this is temporary).
In a word, you always need to work with your head, do not allow your mind to be lazy and hide behind the phrases "I can't", "this is unrealistic", etc.
Focus not on the goal, but on how to achieve it

- overcome oneself
1) the main engine of people's actions is fear and desire. they are reinforced by ignorance. "Once a person stops looking for new information and looks deep into himself, he becomes ignorant."
Fear and disbelief in one's own strength are normal for people, the attitude towards it is important. "Victory is the absence of fear of defeat", "People are so afraid of losing that they lose." Victory often follows defeat (if you don't fall, you won't learn to ride a bike). In general, most people tend to "not lose" instead of "win".
2) fight laziness, bad habits (such as being squishy, not exercising, drinking beer and at the same time arrogantly discussing other people's muscles) and self-confidence (the latter usually masks ignorance)

At the end, Kiyosaki gives 10 steps to success:
1) Fortitude. We need a reason that is stronger than the harsh reality. Reason = all your want + don't want.
2) The ability to choose. Most people prefer entertainment to development, because the first one is easier.
3) The ability to choose friends and consciously learn something from them. With regard to finances and risk, do not listen to the opinion of poor and cowardly people.
4) Ability to learn quickly. Choose carefully what to study. The world is changing rapidly, "recipes for money" - along with it, it is important to learn to find new "recipes".
5) Self-discipline is the hardest part! Having received the award, invest it in something or go on vacation? It's hard to deny yourself some pleasure. Or hold back and not take money from your savings. Or after reading a book with competent advice and not start acting on them.
6) The ability to find good advisers = do not spare money for professionals.
7) The ability to benefit - even out of nothing.
8) The ability to focus on one goal, that is, not to spray.
9) The need for heroes. To have someone to imitate at first - this stimulates many.
10) Ability to give. Money, help, knowledge - whatever you can. This will be rewarded.

Well, a couple of practical tips:
- if you don't like something, you need to stop and think about how to change (or even replace) the circuit so that it works.
- look for new ideas
- find an experienced person in this matter, talk to him - often people share their tricks
- make offers - suddenly someone will agree?
Find a buyer first, then a seller
- know what you are looking for and go in search
- act. it's always better than doing nothing.

Authors: Robert Kiyosaki and Sharon Lecter

Summary of the most useful from the book

For whom?

For those who want to stop experiencing problems with money, and properly restructure their thinking for this.

How should you read this abstract?

If you have read a book, then you read and remember the points from the book that are important to you, and then embody them in yours.

If you have not read the book, then read this summary, highlight the areas that touched you the most, and read them thoughtfully and in detail in the book.

Key facts from the book according to the content:

What are assets and liabilities.

Financial IQ - what it consists of (point by point).

Advantages of business owners from those who do not have corporations.

How to learn to create opportunities for investment (3 points).

How did Kiyosaki himself develop?

Where should you work?

The most important skills in life according to Kiyosaki.

5 reasons why people don't get rich.

10 important qualities that you need to develop in yourself!

Useful phrases from the book:

The rich don't work for money, they make money work for them without their direct involvement.

Old ideas of people who no longer work are one of your main liabilities!

Winners are not afraid to lose. Those who avoid defeat also avoid success!

A good habit is to buy assets first, and then pay your debts!

Summary:

A good introduction to the book, highlighting the problems with money and the consequences of these problems.

A description of how Kiyosaki first worked for money, then for free, and then just saw the opportunity to earn passive income.

The rich buy assets and get rid of liabilities.

Thus, assets give them more and more income, and they give less money to liabilities - therefore they become richer

Question:

what is an asset around you that could bring you money without you if you acquire it?

Start your business - it will be your asset.

Taxes. The rich don't pay them, the poor and the middle class pay for them! They fit into the price of VAT, etc.

Corporations allow you to first transfer money into expenses.

Recipe for success: You can work for your uncle and accumulate your assets! That's what Kiyosaki did!

Key emphasized the importance financial IQ:

Accounting

- the ability to invest

– knowledge of the market

- knowledge of the laws.

For myself: I don’t know much about this yet (((So there is still work to be done!

Plus you need to know:

tax benefits.

Protection from litigation (if everything is not recorded on you).

Differences between business owners and those who do not have corporations.

Corporate owners:

1. Get money

2. Spending money

3. Pay taxes

People working:

1. Get money

2. Pay taxes

3. Spending money

Your corporation is part of your financial strategy.

To learn how to create investment opportunities, you need to:

1. Learn to see opportunities!

2. Learn to find money

3. Learn to listen to the advice of the smartest people

How Kiyosaki himself developed:

As a ship officer, he studied international trade.

In the army, he learned to manage people and lead them.

Learned to sell at the photocopier

Where should you work?

Think about what skills I want to acquire, and only then dwell on a specific profession.

The main question to ask yourself is:

Where does what you do every day take you?

The most important skills in life according to Kiyosaki:

Learn Sales and Marketing!

Communication: letters, conversations, negotiations - constantly improve!

Required management skills:

cash flow

Systems (including yourself and your time)

5 reasons why people don't get rich:

If you are young and afraid to break yourself like a daddy's boy, then stay at home and keep your head down.

And if your blood boils, then go and take risks! Forward! What to fear!

For myself: You need to be afraid that you will not do anything in this life!

2) Lack of self-confidence

People believe the environment that tells them about the impossible!

If you are told that it is impossible to conduct such a training, then ask the person - is he a coach?

If they tell you that “it’s impossible to make money here,” ask the person how he himself could earn money and what channels he tried. If he has never tried anything, then the flag is in his hands!

“I don’t want” is the key to success! I don't want to fix toilets!

Instead of agreeing with others, analyze the situation yourself.

One of the means is greed.

Remove the question “I can’t afford it”, replace it with “how can I afford it?”

4) Bad habits

A good habit is to buy assets first, and then pay your debts!

For myself: get into this habit.

Bad habits are to spend like everyone else on everything and always, and lower everything into liabilities.

5) Self-confidence

It's ego + ignorance.

Talk about an area in which you do not rummage, with a smart look.

Rich dad: What I don't know doesn't exist or I'll lose money there.

If you do not rummage in something, find a specialist in this, and either include him in your team, or take advice from him.

Where to begin?

Develop 10 important qualities in yourself:

1. Fortitude to do for those you love.

Write your “I don’t want” so that later you can write your “I want” and work!

If you do not have a strong motive, then you will not succeed in anything in life.

For myself. IMPORTANT: We must find our motive!

2. The ability to choose.

For myself: For a seminar that lasts 2 days or more, you can completely immerse yourself in the subject. According to Kiyosaki!

People make investments instead of choosing to invest in knowledge about investing!

The same is true in other aspects of life!

3. Ability to choose friends.

I have different friends, and I learn something from each of them!

Friends will tell you why you won't succeed - don't listen to them unless they are experts in the field.

The rich often talk about money - and the more such friends you have, the more information you have about proper financial thinking.

4. Ability to learn quickly.

Man becomes what he studies!

You study 1C-accounting, work in this specialty. You learn how to plan out coffins with an ax - that's what you do.

You learn how to multiply money - you multiply.

Look for fast acting formulas all around you! They are constantly talked about here and there - quickly learn this knowledge and use it!

Modern knowledge quickly becomes outdated. The main thing is how quickly you learn new useful things!

Outdated knowledge that no longer works now drags you down and becomes your liability! Beware of this.

For myself: I'm already fine with this. Many friends do too. We form a team!

5. Self-discipline.

Pay yourself first.

If you do not know how to manage yourself, then do not even try to become rich!

Ridiculous advice from Kiyosaki on how to build self-discipline: Join the army or a religious sect)))

Without self-discipline, you will turn the money you earn into nothing!

This quality is the most difficult to achieve.

Self-discipline and inner firmness are necessary for a person to pay himself first.

Here you need:

Avoid too much debt

Under stress, think and find solutions to find money!

Savings are there to make new money, not to spend it.

Take care of your assets - buy them first!

6. Ability to find good advisers.

Do not spare money for professionals.

We live in the information age and professionals spend in learning their field so I don't waste it on the same!

They save my time and let me earn money! The more they get, the more I earn!

Intermediaries are different - look for those who are close to you in spirit.

7. The ability to benefit even from nothing.

How soon will I receive my money back? - the main question of the investor.

Ask yourself this question as often as you can if you get into something.

If your specialist told you about the possibility - then use it!

8. Ability to focus on one goal.

Luxury goods should be bought with assets.

A good example is given of a son who was learning to play the $3,000 stock market.

Kiyosaki's goal is to buy assets!

For myself: What is my main goal?

9. The need for heroes.

Presenting yourself as an idol is one of the most effective ways to learn!

When making deals, I think like Trump; when promoting a website, I think like Ashmanov.

They are not just sources of inspiration, they make everything easier for us: “If they can do it, so can I!”

Too many people think that many things in life are difficult. And you find the heroes, thanks to which it will seem quite simple! And it will be easy!

10. Ability to give.

Rich dad's proverb: “If you want to get something, you must first give!”

If you lack something and you need it, then give it to others, and you will be rewarded a hundredfold.

Quote: “God does not need to receive, but people need to give.”

“Teach and you will be rewarded for it.”

The measure between thinking and doing.

- take a break: stop. Try to evaluate what you are doing effectively and what is not!

– look for new ideas: in books, at seminars, in films.

We've found a solution - get started!

– find someone who has already done what you are going to do and ask him for advice on how to do it!

– go to courses and seminars, paid and free

– feel free to make suggestions. Then you will figure out which of them are the most profitable.

Buying and selling is fun!

Make offers - and suddenly someone agrees!

Make an offer with the caveat: “valid if approved by the business partner.” Kiyosaki's partner is a cat)))

-walk around places that interest you. Chat with postmen - they are a storehouse of knowledge about real estate and what is happening here.

- when the sale in the store and low prices, everyone is bursting! When the market is down and prices are low, everyone runs away! And you have to buy! Remember this!

– look first for those who want to buy something! And then those who sell. And you will be successful!

That's all.

What else can you do after reading?

We have created a community where we meet, play the game of Kiyosaki and find new assets in our lives. You can join us.

Read, do and become better and richer!

Very briefly From his rich dad, the future millionaire learns how to break out of the "rat race" using his intelligence, will and financial literacy.

Fear of society's judgment keeps us from leaving the rat race and becoming rich

The rat race is an endless routine of working for everyone but yourself. Only you work, and others - the government, collectors and bosses - receive most of the remuneration. Why do we continue to participate in them? Because the fear of condemnation from society prevails in the lives of most people.

Example. The mantra is "go to school, study well, get a good job."

This is outdated advice based on ideas from our parents' past. In those days, it was customary to get a job right out of college, work for decades at the same company, and retire with a good allowance. In our time, this method does not provide a life without financial difficulties and poverty. You can study hard, get into a good school, and find a high-paying job. But never make a fortune by getting caught up in the rat race. Through your hard work, your bosses get richer, but not you.

Fear and greed can cause financially illiterate people to make unwise decisions

Money causes fear and greed in everyone. If you have money, then most likely you will only think about the things that you can buy with it (greed). If you don't have money, your only concern is that you may never have it (fear).

People who mismanage their finances tend to let such emotions drive their decisions.

Example. You got a promotion and a hefty pay raise. You can invest additional amounts in stocks or bonds that will bring you a profit, or please yourself with new purchases. Fear of losing money may prevent you from investing in stocks or other assets because of the risks involved, even though such investments will bring you wealth. Greed inspires to buy a big house with an increased salary, which seems to be a more realistic and safer option than buying shares. But this option means higher mortgage payments and exorbitant utility bills, effectively negating your raise.

Study the question of investments, risks and debts, and you will be able to make rational decisions even in the grip of greed and fear.

Financial literacy is vital for both personal and societal well-being

To become rich, it is not necessary to be talented and capable. The world is full of poor talented people. You need to be financially literate - understand accounting, investing, etc.

This is not taught in schools - the study of finance is not included in the program. Children are not taught how to save or invest. As a result, they are illiterate in many subjects. This is a problem not only for young people, but also for highly educated adults making bad decisions about their money. Most leading politicians are financially illiterate. As a result - exorbitant public debts. The complete lack of retirement planning among many citizens is a sign of incompetence in making decisions on monetary matters.

Example. In the US, 50% of workers live without a pension; and the rest (almost 75-80%) - on a meager allowance.

If this knowledge is not given to us by society, it is necessary to learn on our own. In times of great economic change, the need for a good financial education becomes even more acute, especially for those who want to get rich.

Financial self-education and a realistic assessment of your funds - steps towards wealth

The sooner you start following the path to personal wealth, the better. You are more likely to become rich by starting in your 20s than in your 30s.

Set realistic financial goals. For example, buy a Mercedes within the next five years. Develop your financial literacy. Education is an investment in your mind. A great way to do this is to work for knowledge, not money.

Example. If you're afraid of rejection, try working for a network marketing company. The salary will be small, but you will develop sales skills and gain self-confidence. Engage in financial education in your spare time. Sign up for courses and seminars, read books and communicate with experts.

Learn to take risks to become rich

Madness is doing the same thing over and over again expecting different results. If you want to change your current financial condition, start handling your funds differently. Learn to take risks - all successful people take risks, they are not afraid of them, but manage them. Taking risks means not always feeling financially secure by placing funds in basic and savings bank accounts. Invest your money in stocks or bonds. They are more dangerous than ordinary bank accounts, but bring more profit and in a shorter time. Or take advantage of other types of investments: real estate, tax lien certificates (in the USA).

The higher the potential profit, the greater the risk. There is always a chance of losing all your investments, but without taking risks, you definitely won’t get big returns. Seize opportunities and try to manage risks. These are necessary conditions for improving your financial situation.

Stay motivated

The path to wealth is long and tiring. It's very easy to get discouraged when you encounter obstacles. You need to find ways to stay motivated, even if you fail.

Make a list of do's and don'ts.

Example. I don't want to work hard like my parents. I want to pay off all my debts within three years.

Browse these lists, be persistent on the path to wealth.

Another good way to stay motivated is to spend money on yourself before you pay your bills.

This way you will see how much extra money is needed to both fulfill your desires and satisfy the requirements of the collectors. Pay your bills, but pay yourself first; the added pressure of unpaid bills will inspire you to find ways to make enough money to meet both needs.

Financial self-discipline is a key trait of successful people. Refine and develop it.

Get inspired by studying the life stories of wealthy people like Warren Buffett or Donald Trump. This will make you more ambitious.

Laziness and arrogance can lead even financially literate people to poverty

Even being financially literate, you will face laziness and pride. They can harm you completely unnoticed. Laziness is not necessarily inaction; it may be ignoring tasks that need to be solved.

Example. A businessman who works more than 60 hours a week is far from being lazy. Working at night, he gradually loses his family. Noticing the disturbing signs of his behavior, he, instead of eliminating them, buries himself at work. He is lazy: avoids what he has to do, and is likely to suffer the consequences of a costly divorce.

Arrogance in the event of financial ruin can be defined as "illiteracy plus ego": a combination of insufficient financial knowledge and an ego too inflated to admit it. Arrogance is especially dangerous when investing.

Example: Some stockbrokers will try to sway your pride in order to sell more shares and increase their commission. They stimulate your ego with the positives of an investment while keeping you ignorant of the negatives.

Invest only in assets and avoid liabilities

An asset makes you money, a liability costs you money.

You will become rich if you invest in assets. Assets - businesses, stocks, bonds, mutual funds, income-generating properties, intellectual property royalties, and anything else that generates income increases in value over time and can be easily sold. When you invest in assets, your dollars work to create income for you. The more "working dollars" you have, the better. The goal is income that exceeds expenses. Reinvest excess earnings in assets with even more dollars working for you.

Investors may mistake certain liabilities for assets.

Example. The house is usually perceived as an asset, but in fact it is one of the largest liabilities. After buying a home, you will work your whole life to pay off your 30-year mortgage and property taxes.

Investing in such a liability is unprofitable for the following reasons:

You will incur huge costs every month for the next 30 years.
These payments could be invested in potentially more profitable assets such as shares or real estate for rent.

To invest wisely, remember the difference between an asset and a liability.

Your profession pays the bills, but only your own business will make you rich.

Difference between profession and business:

Your occupation is everything you do 40 hours a week to pay bills, buy groceries, and cover other living expenses. As a rule, she gives you a certain position: “restaurant manager”, “salesman”, etc.

Your business is what you invest time and money into to grow your assets.

To achieve wealth, you must build a business, and at the same time work in your profession.

Example. A cook who studied culinary arts at school and knows all the tricks of the trade. His profession brings in enough money to pay the rent and feed his family, but he still doesn't get rich. So he invests in a business: real estate. He spends all the extra money on the purchase of apartments and apartments that can be rented out.

Professions bring people enough income every month. By investing additional income in their business, they increase their assets. Your profession initially sponsors your business. Keep your job until the business starts to grow steadily so that your assets, not your profession, become the main source of income. This is a sign of true financial independence.

Learn the Tax Code to Minimize Taxes

There are many legal ways to minimize taxes.

For example, investing money through corporations. If you invest through your own corporation, the money you earn is taxed at a much lower rate. In the US, corporations have an advantage: debts and liabilities are placed in the name of the corporation, not the owner, which insures against losses on unsuccessful investments. As an employee, you first earn, then pay taxes, and live on what's left. The corporation earns, invests, or spends as much as it can and then pays tax on what's left. Corporations can help people get rich very quickly.

Study this issue, look for loopholes and benefits in the tax system of your state.

Example. Under Section 1031 of the Internal Revenue Code, if you sell your current real estate assets to buy more expensive ones, the government delays taxing your new property until you sell your old one.

As long as the government delays taxing you, capital gains occur.

The most important

Why do people get stuck in the rat race?

The fear of being judged by society keeps us from leaving the rat race and becoming rich.
Fear and greed can cause financially illiterate people to make unwise decisions.
We do not train financial literacy, despite the fact that it is vital for both personal and social well-being.

How can I start my journey to a more prosperous life?

Financial self-education and a realistic assessment of your funds are steps on the path to wealth.
To become rich, you must learn to take risks.
On the long road to wealth, stay motivated.
Laziness and arrogance can lead even financially literate people to poverty.