7 “Rich Dad Poor Dad” Tips That Can Help You Save Fast
- Reading is a fundamental step when trying to improve your personal finances.
- One of the most acclaimed books is Rich Dad, Poor Dad, which includes tips to help you save money.
There are must-have books on personal finance that will help you develop good saving habits.
Taking training and making time to read can help you improve economic control so you can gain more financial knowledge and ultimately increase your financial freedom.
While many are doing just fine by relying on their intuition to guide their spending habits, it can also be helpful to deepen your knowledge and set up a budget, an emergency fund, or make sure to have a financial contingency plan in case of unforeseen events.
One way to get yourself on the right track with your money is to read.
There is a wide range of reading materials that can help you apply a better philosophy to your finances.
One of them is Rich Dad, Poor Dad, a must read if you want to know more about personal finance.
It offers clever ways to escape the vicious circle of working hard for others all your life without saving anything.
Here are seven helpful lessons you can apply from the book to your own life.
1. The rich make their money work
You must have heard the phrase “live to work or work to live”.
This is one of the basic concepts covered in the book.
Most work to survive. If they have money problems, they get by or ask for a raise.
This is the vicious circle in which most middle and working class people fall.
Generally, people with less financial resources study to get a good education in order to qualify for more relevant jobs so that they can then earn more money.
They tend to avoid taking risks for fear of not being able to pay their debts, being laid off or not having the money they need to survive.
On the other hand, the rich earn money and do not work to earn it.
In other words, they buy assets that generate income. This is one of the most important lessons of the book.
2. Financial education is your best asset
According to this book, money is not your greatest asset.
If people are willing to be flexible, open-minded, and learn, they will tend to get richer.
If a person thinks that capital solves all his problems, he will generally have problems all his life.
“Intelligence solves problems and produces money, and money without financial intelligence is quickly lost,” says Robert Kiyosaki, author of the book.
The book recommends having knowledge of accounting, investing, markets, law, auctions, marketing, leadership, writing, public speaking, and communication.
3. Do not work to earn money; work to learn
Another big takeaway from the book is that work should be used as a platform to improve the skills you have.
“Find a job where you can learn the skills above,” says Kiyosaki.
He points out that learning can make you much more competent and can provide you with unique skills to improve your job situation.
4. Know the difference between assets and liabilities
“An asset is something that puts money into your pocket and a liability is something that takes money out of it,” the book explains.
In this sense, the rich acquire assets (securities and investments) and the poor add liabilities (liabilities and obligations).
This is the main difference that can punctuate the future evolution of an individual’s personal finances.
5. Minimize your expenses
This lesson is closely related to the previous one.
The author advises to have as little debt as possible because, in the end, it hinders the financial freedom you want to achieve.
“Reduce your responsibilities” is one of the most repeated phrases throughout the book.
However, keep in mind that there is a “positive” debt, such as a mortgage, and then a “negative” debt, such as fast loans.
6. Reinvest the profits you make
The profitability created by your assets should be reinvested in other assets, according to the book.
“Don’t think about how to earn more income; look for more valuable assets – that’s how you should repeat the cycle,” says Kiyosaki.
7. Don’t count exclusively about financial advisors
The last advice in the book is that each individual has a good idea of the capital that constitutes their own personal finances.
Getting help from a financial advisor can be helpful, but you also need to be in control of your own money.
“Learn to invest because no one will do it better than you,” says Kiyosaki.