Instead of saying I can’t afford it, think/ask “How can I afford it?”

Secrets of Rich Dad

Secret 1 The rich don’t work for money (learn how to let money work for you)

Secret 2 Don’t let emotions (fear or greed) drive your decisions

Fear and Ignorance are the bigger causes of poverty Ignorance about money drives greed and fear. Learn to use your emotions to think not think with your emotions.

You need financial literacy to be rich. Elements of financial literacy

  • Accounting (Ability to read and understand fiancial statements)
  • Investment (money making strategies)
  • Understanding of Markets (Science of supply and demand. Does an investment makes sense based on the current market?)
  • Law (Understanding of tax advantages of a corporattion)

You need to know the difference between an asset and a liability.

  • Rich acquire assets
  • Poor only have expenses
  • Middle Class acquire liabilities thinking they are assets

Asset - Puts money in your pocket Liability - Takes money out of your pocket

More money only accentuates the cash flow pattern running in my head.

What we really need a lsson on is not how to make money but rather how to spend it (financial aptitude)

Wealth = if I stopped working today, how many days will I survice (the measure of the cash flow from the asset column vs expenses). This is different from net worth = assets - liabilties

Goal 1 - Get asset cash flow to match expense Goal 2 - Get enough excess cash flow from asset to reinvest in assests

Secret 3 Mind your own Business (Build and keep your asset column)

The rich focus on their balance statement, everyone else on their income statement

The business you are in is different from your profession

Real Assets + Businesses that don’t require my presence (I own them but they are run or managed by other people) - If I have to work there it;s not my business it’s my job + Stocks + Bonds + Mutual Funds + Income generating Real Estate + Royalties

Acquire assets you love

Rich buy luxury last, poor and middle class buy luxury first

Secret 4 Own a Corporation

Secret 5 The Rich Invent Money

Financial Literacy requires technical knowledge and courage. Smarts and guts

Learn to take risks

You need to understand what business you are invested in

Secret 6 Work to Learn not to Earn (not for money)

Things to learn: Accounting, Investing, Marketing, Sales, Negotiation and Law

You want to know a little about a lot

Seek work, position or role more for what you will learn than what you will earn

Education is more valuable than money

Management Skills for success + Management of cash flow + Management of systems (including self and time with family) + Management of people

Surround yourself with people smarter than you are

Use assets not credit to buy luxuries

Have Mentors or Icons you follow/imitate

  • George Soros
  • Peter Lynch (How does he invest?)
  • Carl Icahn
  • Steve Cohen
  • Jim Rogers
  • Warren Buffett (What does he invest in?)
  • Donald Trump (How does he negotiate?)

A stock investment strategy

  • Invest in stock at valued price
  • When it goes up take out original amount
  • Leave increase in the rest of investment