Rich Dad Poor Dad - Introduction (Personal Reflections)

in LeoFinance2 months ago (edited)

I had heard of Rich Dad Poor Dad (by Robert T. Kiyosaki) on many occasions. From what I had gleaned, I thought I might be interested in reading the book. So when I saw the book at my friend's house earlier this week, I asked to borrow it.

This is the first in a series of posts that contain personal reflections as I read through the book. Today, I am focusing on the Introduction.

RDPD Intro.png
Image by Kevin Schneider from Pixabay

Financially Illiterate?

It is sad but not surprising that many people struggle with money and finances. Simply put, most of us have never been educated about money.

We all know that money is important, budgets are needed, and expenses need to be paid. But many people can't cover their expenses, and even worse, they have little to no hope of being able to do so.

Why? There are a lot of financially illiterate people.

I feel blessed that my dad taught me many lessons about money and finances, but there is still much to learn. I want to be a source of knowledge and a solid example for my children so they can understand how money works and how to make it worked for them.

Even though money is primarily viewed as a private issue (or a family issue), it is clear that managing financials can also be a national or country-wide issue.

Robert wrote:

Our staggering national debt is due in large part to highly educated politicians and government officials making financial decisions with little or no training in the subject of money.

Your ability to manage money or not has little to do with how smart you are and more to do with how much knowledge you have received. I want to take it one step further. It is about the knowledge you have received and the degree to which you are willing to take action.

Even if you feel financially illiterate, you can change course now (which will have a huge impact on your future and those you care about most).

Exercise Your Financial Muscles

I think about physical exercise often, but more often than not, I think about how I don't want to exercise. It is hard work. It requires time and effort.

We must discipline our physical bodies and our financial minds/attitudes. First, you need to learn the correct steps of action. Second, you must consistently take action. Third, learn more, do more, grow more.

Robert's Rich Dad said:

"My brain gets stronger every day because I exercise it. The stronger it gets, the more money I can make."

I had never really thought about "exercising" my brain in regards to finances. I peruse the internet to find new information. I take small action steps.

But If I am candid, my financial exercising is probably more like a leisurely walk than a brisk job. I am not terribly consistent, and I don't have clearly defined goals of what I want.

I need to wake up my brain each morning, do my financial exercises, and start taking focused action.

Robert cautioned allowing negative thoughts:

  • Poor Dad says, "I can't afford it." This statement is a symbolic white flag of giving up that stops the brain from working.
  • Rich Dad asks, "How can I afford it?" This question engages the brain and promotes creative thought and solutions.

Are you putting your brain to sleep in regards to your finances?

Which Mindset Will You Choose?

As we become financially literate and exercise our brains, we may notice a change in how we think about money.

Notice the differences of thought between Poor Dad and Rich Dad:

Poor DadRich Dad
The rich should pay more taxes to take care of the poorTaxes punish those who produce and reward those who don't
Find a good company to work forFind a good company to buy
I am not rich because I have kidsI must be rich because I have kids
Money is never discussed at the dining tableTalking about money is encouraged at the dining table
My house is my largest investment and greatest assetMy house is a liability
Study hard to earn a degree and get a good jobStudy hard to understand how money works
"I work for money""Money works for me"

What we believe about our present condition will impact our future.

Robert stated:

"There is a difference between being poor and being broke. Broke is temporary. Poor is eternal."

Being broke speaks to your financial situation, which can be changed over time as you work towards your goals.

Being poor speaks to your attitude and state of mind. A person who believes he is poor creates a self-fulfilling prophecy and a cycle that will be almost impossible to break.

Money Comes and Goes. Knowledge Remains!

Money is a form of power. But what is more powerful is financial education. Money comes and goes, but if you have the education about how money works, you gain power over it and can begin building wealth.

I see the truth in this statement, but I also understand why this idea might be challenging for people.

Often times we want instant gratification and immediate results. We are not willing to put in the necessary time and effort to build a better future.

Money is sexy. Knowledge is boring. But without the proper foundation (solid information) is impossible to build wealth and streams of income.

Money comes and goes. There are crashes, bubbles, and bad actors. But knowledge remains! If you have the right knowledge, you can reset or rebound after a challenge or obstacles (time and time again).

I am being challenged to think just as much about the journey (the acquisition of knowledge) and the end goal (freedom and wealth).

I Want To Hear From You

Let's continue this conversation in the comments section.

  1. Do you feel that you are financially literate?
  2. Who taught you financial principles?
  3. What is one piece of financial advice everyone should follow?

Thanks for stopping by!

@SumatraNate.Leo

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Great stuff! Rich Dad Poor Dad should be mandatory reading for everyone 👍

Money is sexy. Knowledge is boring.

Herein lies the conundrum. So many want the money, but few want to gain the knowledge needed for it.

  1. I feel I am financially literate at a bday level, but I realise I have so much more to learn too.

  2. I learnt most of my financial basics from my mum, but it's been built on through experience, not always good experiences, either.

  3. Learn the difference between a liability and and asset. It's not always what society would have you believe.

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