7 Tips from ‘Rich Dad Poor Dad’ that may help you save up QUICK!

There are some must-read books in personal finances that will help you develop good saving habits. Undergoing training and taking the time to read can help you improve economic control so you can become more financially literate and, ultimately, increase your financial freedom. While many manage perfectly well relying on their intuition to guide their spending habits, it can also be useful to expand your knowledge and set up a budget, an emergency fund, or ensure you have a financial contingency plan in the event of something unexpected.

One way to get on the right track with your money is by reading.

There is a wide range of reading material 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 learn about personal finance. It offers smart ways to escape the vicious circle of working hard for others your whole life while failing to save anything.

Here are seven helpful lessons you can apply from the book to your own life.

1. The Rich Make Their Money Work For Them.

You must have heard the phrase “live to work or work to live”. This is one of the basic concepts addressed in the book. Most work to survive. If they have money problems, they ride them out or ask for a raise. This is the vicious cycle most middle and working-class people fall into. Generally, people with fewer financial resources study to get a good education to qualify for more relevant jobs so they can then earn more money. They tend to avoid taking risks for fear of not being able to pay their debts, being fired, or not having the money they need to survive.

On the other hand, rich people make money and don’t work to earn it. In other words, they buy assets that generate income. This is one of the book’s most important lessons.

2. Financial Education is Your Greatest Asset.

According to this book, money isn’t your greatest asset. If people are prepared to be flexible, have an open mind, and learn, they will tend to get richer. If a person thinks capital solves all their problems, they will usually have problems their whole lives. “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, bidding, marketing, leadership, writing, public speaking, and communication.

3. Don’t Work to earn Money; Work to LEARN.

Another of the book’s great teachings is that work is to be used as a platform to improve the skills you have. “Find a job where you can learn the above skills,” says Kiyosaki. He stresses that learning can make you much more knowledgeable and can provide you with unique skills to improve your professional situation.

4. Know the Difference Between Assets & Liabilities.

“An asset is something that puts money in your pocket and a liability is something that takes money out of your pocket,” the book explains. In this sense, rich people acquire assets (securities and investments) and poor people add liabilities (commitments and obligations). 

This is the main difference that can punctuate the future development of an individual’s personal finances.

5. Reduce your Spending as Much as Possible.

This lesson is closely linked to the previous one. The author advises having as little debt load as possible because, in the end, it hinders the financial freedom you want to achieve. “Reduce your liabilities” is one of the most repeated phrases throughout the book.

You have to keep in mind, however, that there is “positive” debt, like a mortgage, and then “negative” debt, like quick 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 Rely Exclusively on Financial Advisors.

The book’s final piece of advice is that every individual has great insights into the capital that makes up their own personal finances. Getting help from a financial advisor can be useful, but you also need to have control over your own money.

“Learn how to invest because nobody will do it better than you,” says Kiyosaki.

Article Credit: https://www.businessinsider.com/money-personal-finances-book-reading-economics-investment-savings-assets-freedom-2021-7

Published by SULV Foundation

Build and Repeat is our Mission and Purpose, we strive to make the world a better place while creating inter-generational wealth.

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