Rich, focus on their financial education—their “greatest

Rich, Poor Your Decision

        Throughout the book, the recurring theme is that financial education is the key to financial success. People spend so much time worrying about making money that they regret to focus on their financial education—their “greatest wealth”.  In the world today, people often face challenging economic times, those who lack financial education often fail and lose all their money, while those who believe in possibilities, expand their minds and their financial literacy prosper despite challenging times. People often have the notion that money will solve all their problems but in actuality financial intelligence solves problems and solving money generates money.

Kiyosaki states that “It’s not how much money you make but how much money you keep” (57). Lotto winners, for instance, are often soon broke after a big win, because they have never learnt how to keep money nor make their money make money. The cash flow patterns of a person are characteristically emphasized with more money, so those who have debts will just have larger debts if they come into more money.

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.The number one rule in becoming rich is knowing the difference between assets and liabilities and acquire assets while limiting liabilities. Liabilities are things that take money out of your pocket, your expenses, while assets are things that put money in your pocket, those that build income column. Houses are liabilities because they take money out of your pocket as you have to pay for mortgage payments, property tax, insurance, maintenance, and utilities. Big breaks are often lost when money is tied up paying for liabilities as no money is left over for investing money into the asset column.  Building up an investment portfolio before buying a house can have great rewards.

Assets will have more time to grow in value, additional capital that can be reinvested into the asset column and investing early will give you investment experience developing your financial IQ. The rich get richer because they buy assets that generate more than enough money to cover expenses and the left over money gets reinvest into the asset column creating more income. The middle class on the other hand spend all their salary on liabilities leaving no money to invest, and when they receive a pay rise they go and buy bigger houses creating larger liabilities instead of investing in assets. The rich buy luxuries last while the poor and middle class buy them first..There are four basic elements in order to becoming financially literate which are accounting, investing, understanding markets and the law.  Accounting is the ability to read numbers and financial statements which allows you to identify strengths and weaknesses of a business. Investing is the science of “money making money” and involves using strategies and formulas.

Understanding markets is the science of supply and demand. Understanding the law allows you to identify tax advantages and the gives you knowledge to be protected by corporations. In addition to these four basic elements courage plays a big part in becoming a financial genius. It is imperative to take risks in order to make it big. If one continually plays it safe and resists change they will watch as others prosper around them. Financial intelligence is simply having more options.

It’s about taking problems and finding solutions and turning those problems into opportunities to make money. The more you build your financial intelligence the more solutions and opportunities will come your way and risks are no longer blind gambles, but calculated possibilities..

        The second lesson that I really stood out for me was work to learn not work to earn. People who are highly educated in their professions often still struggle financially, this is often due to missing one vital skill.    If they could just master that one skill their income could rise significantly. When it comes to money the only skill most people know is to work hard but if they could combine the four skills of financial IQ of accounting, investing, marketing and law, then making money with money is you easier than most people believe (156). Kiyosaki explains that when you acquire employment, you should look at what the job can teach you, what knowledge you will receive from it and that is why you should take the position. Popular opinion states that in order to make money you should specialize, and Kiyosaki poor dad believed in this opinion while his rich dad believe that people should learn a little about a lot. It is beneficial to take employment in different areas and learn new things. Important lessons to learn that can benefit a person in the future is to learn management skills, including how to be a leader and manage people, learn how to manage systems and learn how to manage cash flow.

Most workers do what they were taught to do which is work hard in a secure job but working hard never seems to get them ahead. They do get benefits in the short term but in the long term they will be left to fend for themselves. Kiyosaki recommends that young people take employment to learn valuable skills that will benefit their lives in the future before picking a specific profession and before getting trapped in the rat race and recommend to those already trapped to take on a second job one that teach them valuable lessons for the future rather than just working for the money and security (163). One suggestion is to take a position at a multi-level marketing company to learn sales skills, as they often have fantastic training programs and these positions teach people to get over their fear of failure and rejection. This fear is often the greatest obstacle in becoming successful (163). People often earn less than their potential because they are so focused on perfecting their specialized skill that they neglect the skill of selling and delivering their skill (166).

It is advisable to learn all aspects of a business rather than specializing in one area as it gives you the option to one day take over the business and shows you how all departments interrelate. The most important specialized skills are sales and marketing. The ability to sell to communicate to customers, employees, bosses, spouses, children, is a basic skill for personal success.

These skills are difficult for most because they fear rejection. Another important skill is to be not only a good student but a good teacher. To be truly rich in life one must be able to give as well as receive..

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