About The “Lessons From” Series
The “Lessons From” series are bite-sized summaries of books about financial literacy for parents raising money-smart kids.
With Summary #5, we continue the series on a book called Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not! by Robert T. Kiyosaki, Sharon L. Lechter. (Link to Summary #4)
Today we learn that money can be created, and your financial IQ is the way to create it.
Chapter 5 – LESSON 5: THE RICH INVENT MONEY
“Often in the real world, it’s not the smart who get ahead, but the bold.” There are lots of poor people that are extremely talented and many rich people with relatively little genius at all. We tend to think that more money comes along with being more educated, more talented, or adding more value to society. The truth about money is quite different.
“The poor and middle class work for money,” Rich Dad would say. “The rich make money. The more real you think money is, the harder you will work for it. If you can grasp the idea that money is not real, you will grow richer faster.”
The foundational basis for creating wealth changes over time: “Land was wealth 300 years ago. So the person who owned the land owned the wealth. Later, wealth was in factories and production, and America rose to dominance. The industrialist owned the wealth. Today, wealth is in information. And the person who has the most timely information owns the wealth.”
Making money is a talent in and of itself. And it’s one that can be learned just like any other skill. However, most people don’t take the time to learn financial skills. It scares them, it bores them, or they just hope if they work hard and save what they can, with a little luck their money situation will work itself out.
“Few people realize that luck is created, just as money is. And if you want to be luckier and create money instead of working hard, then your financial intelligence is important.” The world is always handing you opportunities of a lifetime, every day of your life, but all too often we fail to see them. Here’s how the author suggests we take advantage of them:
- Financial intelligence is simply having more options. If the opportunities aren’t coming your way, what else can you do to improve your financial position?
- I constantly encourage people to invest more in their financial education than in stocks, real estate, or other markets. The smarter you are, the better chance you have of beating the odds.
- So why bother developing your financial IQ? Because if you do, you will prosper greatly. And if you don’t, this period of time will be a frightening one. It will be a time of watching some people move boldly forward.
- It is what you know that is your greatest wealth. It is what you do not know that is your greatest risk.
- The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth…
Chapter 6 – LESSON 6: WORK TO LEARN— DON'T WORK FOR MONEY
“Job security meant everything to my educated dad. Learning meant everything to my rich dad.” As we learned in Lesson 5, it is shocking how little some talented and educated people earn. I can be a world class author, but if I don’t know the first thing about marketing and selling, I might be the world’s best kept secret, and live in poverty.
The solution is to expand your skill set. Get out of your comfort zone and pick up some skills in sales, accounting, investing, and law. Selling in particular as a profession is generally looked down upon in our society, but every one of us is selling every day, even if we are simply selling our ideas to others. The author positions marketing and sales as some of the most important foundational skills for your financial IQ:
- I have mentioned before that financial intelligence is a synergy of accounting, investing, marketing, and law. Combine those four technical skills and making money with money is easier than most people would believe. When it comes to money, the only skill most people know is to work hard.
- Rich dad encouraged me to do exactly the opposite. “You want to know a little about a lot” was his suggestion.
- Instead of simply working for the money and security, which I admit are important, I suggest they take a second job that will teach them a second skill. Often I recommend joining a network-marketing company, also called multilevel marketing, if they want to learn sales skills.
- The most important specialized skills are sales and marketing. The ability to sell—to communicate to another human being, be it a customer, employee, boss, spouse, or child—is the base skill of personal success. Communication skills such as writing, speaking, and negotiating are crucial to a life of success.
Coming Next Time… OVERCOMING OBSTACLES and GETTING STARTED
Or dive right in yourself:Rich Dad Poor Dad: What The Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!
P.S. This book summary has been completely rewritten and published on the Kindle platform. If you’d like to have this summary available at any time on your Kindle app or device, it’s available here.