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 #6, we finish up 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 #5)
In this last entry of the series, we cover methods to overcome obstacles, cynicism, laziness, and bad habits, as well as concrete ideas to getting started.
Chapter 7 - OVERCOMING OBSTACLES
“The primary difference between a rich person and a poor person is how they manage fear.” Rich people lose money. They take risks, make investments, and sometimes they lose. However, other times those investments pay off, and more than make up for the losses. Many poor people never lose money. They are too afraid to take risks with investing, so they don’t lose, but they don’t gain either. Winners get inspired by failure to learn and do better.
The poor and middle class “don’t win financially because the pain of losing money is far greater than the joy of being rich.” They “play life too safe and too small. They buy big houses and big cars, but not big investments. The main reason that over 90 percent of the American public struggles financially is because they play not to lose. They don’t play to win.”
“If you have any desire to be rich, you must focus. Do not do what poor and middle-class people do: put their few eggs in many baskets. Put a lot of your eggs in a few baskets and focus. Follow One Course Until Successful.”
“Just do what Colonel Sanders did. At the age of 66, he lost his business and began to live on his Social Security check. It wasn’t enough. He went around the country selling his recipe for fried chicken. He was turned down 1,009 times before someone said yes.” Now that’s the power of focus!
Following this advice also helps to overcome cynicism, laziness, and bad habits that keep you from making money:
- “… a savvy investor knows that the seemingly worst of times is actually the best of times to make money. When everyone else is too afraid to act, they pull the trigger and are rewarded.”
- “Cynics criticize, and winners analyze” was another of his favorite sayings. Rich dad explained that criticism blinded while analysis opened eyes. Analysis allowed winners to see that critics were blind, and to see opportunities that everyone else missed. And finding what people miss is key to any success.
- The most common form of laziness today is laziness by staying busy. Keeping busy keeps you from feeling guilty about not focusing on building wealth.
- One key to building wealth is paying yourself first. “After paying myself, the pressure to pay my taxes and the other creditors is so great that it forces me to seek other forms of income. The pressure to pay becomes my motivation. I’ve worked extra jobs, started other companies, traded in the stock market, anything just to make sure those guys don’t start yelling at me. That pressure made me work harder, forced me to think, and all in all, made me smarter and more active when it comes to money. If I had paid myself last, I would have felt no pressure, but I’d be broke.”
Chapter 8 - GETTING STARTED
“It really is easy to find great deals. I promise you that. It’s just like riding a bike.” The hard part is learning to ride the bike in the first place. You fall down, you get hurt, sometimes you think you might never get it, but once you do, it becomes “easy”. Learning about money and investing works the same way. Our culture has “failed to teach us how to have money work for us.” However, let’s not let that stop us! We can overcome with the self discipline to invest in our own education:
- “Personal self-discipline is the number-one delineating factor between the rich, the poor, and the middle class.”
- “Invest first in education. …Each of us has the choice of what we put in our brain once we’re old enough. You can watch TV, read golf magazines, or go to ceramics class or a class on financial planning. You choose.”
- “You become what you study. In other words, be careful what you learn, because your mind is so powerful that you become what you put in your head. When it comes to money, the masses generally have one basic formula they learned in school and it’s this: Work for money. In today’s fast-changing world, it’s not so much what you know anymore that counts, because often what you know is old. It is how fast you learn. That skill is priceless”
- “Choose friends carefully: the power of association. I’ve noticed that my friends with money talk about money. They don’t do it to brag. They’re interested in the subject. So I learn from them, and they learn from me. I also learn from my friends who struggle financially. I find out what not to do.”
- “Poor people have poor habits. A common bad habit is innocently called “dipping into savings.” The rich know that savings are only used to create more money, not to pay bills.”
- “Teach and you shall receive: the power of giving. If you want to learn about money, teach it to someone else.”
Chapter 9 - STILL WANT MORE? HERE ARE SOME TO DO'S
- "Stop doing what you’re doing. In other words, take a break and assess what is working and what is not working.
- Look for new ideas. For new investing ideas, I go to bookstores and search for books on different and unique subjects. I call them formulas. I buy how-to books on formulas I know nothing about.
- Find someone who has done what you want to do. Take them to lunch and ask them for tips and tricks of the trade.
- Take classes, read, and attend seminars.
- Make lots of offers, even if they are very low. Someone might say yes."
Now 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.