Author: Robert Kyosaki
Published year: 1997
Genres: Investment
Status: Done
The Book in 3 Sentences
This is my very first financial starter, I can’t simply put it in 3 sentences, as everything is born here.
Be financially intelligent
Not many people are illiterate, but tons of people are financially illiterate, obviously because this is never taught in the school. Do your own income statement and balance sheet, know how to read financial report, learning finance is also the way to know how this world works. You need to keep learning as you’re the only hope to escape from the rat race, to hopefully one day gain your financial freedom.
Financial intelligence is made of 4 skills, I literally used those as 4 categories in my plan.
- Accounting
- Investing
- Understanding market
- Law, tax
Know what is asset and liability and buy the asset
Quite simply put, asset puts money in your pocket, liability takes money out of your pocket. You can’t accumulate too many liabilities without enough assets, but sadly people buy the wrong deal. The poor doesn’t have liabilities, all go to the expenses. The middle class buys the liabilities which they think them as assets. The smart rich buys the asset, which provides them the income and generates the cash flow.
Use the assets to buy luxuries
Oppositely as we may think, the poor buys luxuries first, but the rich buys the luxuries last. The poor is poor because they are short-sighted and don’t know how to direct the money to the correct use. Think of luxuries as the reward for your asset accumulation, buy it only when you deserve it. To be a better planner, do not spend today for your impulsive urge, but grow assets to pay for things that you want.
The power of giving
If you want something, learn to give first. Give, then you shall receive. Poor people are sometimes more greedy than the rich. And whenever it comes to money, love, happiness, and contact, all one needs to remember is to give first.
Top Quotes
- The poor and middle class work for money. The rich have money work for them.
- It’s not how much money you make, it’s how much money you keep. The Psychology of Money
- God doesn’t need to receive, but humans need to give.
Summary & Reflection
I knew this book quite long time ago, too young that I didn’t think personal finance was too important. Luckily when I saw it in the Archambault, I suddenly got reminded and bought it immediately. While reading, I felt very enlightened. After reading, the real journey of my investment all started from this book. I have to admit this was my No1 financial book, inspired, encouraged and motivated. Based on this book, I was so eager to read more about finance and investment, and this list goes on and on.
The biggest takeaway from this book is that I realized investment can be so close to each of us. Except for working hard and saving money, there are much more to plan for your growth. To be a saver is not enough, it’s surely better than spending nonsense, it makes sure you’re not lack of basics, but it won’t take you anywhere further. Being a saver already sets the boundary to your life potential, you stay in the safe zone and miss the chance to see how much you can achieve. As we always wonder, what if… what if…
I want to know what if, and I know I can do that, I learn it, I use it, there’s no way to be a loser for me. People say this book is so good for beginners, people say this book changed their life, agree, it sets you on the right path, that investing is never a game just for banker or tycoon. Instead, investment is the lifelong lesson for every ordinary person with any job title like you and me, and that’s the only way to guard your hardly-earn wealth and ultimately make that money work for you. We don’t need to be super rich to start investing, it’s more important to have this awareness and mindset to take the action and fear nothing.
Along reading this book, I felt that a lot of things were quite new, mind-blowing, but totally made sense. It gave you that “eureka” moment, something you know but too busy to see, we just need a highlight to do better.
- Why saving is loser? 2% saving interest can’t even catch up with 2% yearly inflation. You money is not gaining value by sitting there.
- The ultimate goal is to gain the purchasing power, which means your money need to gain value as time goes by, surely through investment.
Written on Nov 30. 2020