Everybody desires to have more than enough wealth to fulfill his every wish. For instance, a dream house, an expensive watch, branded clothes, a world tour, etc. But unfortunately, most people try to manage their expenditures in their whole life. On the other hand, some people make progress gradually to become rich. People who never succeed in life or never earn money in life tell people about the rich that they have become rich by luck. This is not the truth. They have a specific formula or financial intelligence that makes them rich.
In the year 1997, an American entrepreneur and businessman Robert T. Kiyosaki wrote a book about the mindset that makes a person rich. The name of the book is "Rich Dad Poor Dad". Millions of copies of this have been sold out since 1997 only because of its simple and beautiful way of teaching financial education. The lives of many people have changed after reading this book. They became rich. This book is high in demand all over the world though some of its concepts are quite controversial.
We are going to discuss the secret formula for getting rich given by Robert Kiyosaki in his book "Rich Dad Poor Dad. He begins his book by relating a story. He says that he has two fathers, but actually, he never had two fathers. In fact, he has one father. The other one is his friend's father. His own father is a Ph.D. He is a literary man, but despite this, he leads a life of poverty whereas his friend's father who he considers as his own father is middle failed but he is a wealthy rich man. The difference between their social status is only due to their angle of thought.
Robert's own father always believes that wealth is the root cause of every evil in the world whereas his wealthy father believes that poverty is the root cause of every evil in the world. For him, the absence of money is the source of every evil in the world. Whenever Robert's poor dad sees something expensive, he always says, "It is very costly. I can't afford it", but when his rich father sees something like that, he always says, "How can I afford it? What can I do to get it"?. This thought makes him rich.
Robert's poor dad always advises him to study hard and try to get a job whereas, his rich dad always advises his children to think about how they can build a company and get people hired. He always tells his children that a person never becomes rich by doing a job, but business makes a person rich.
The first lesson that Robert Kiyosaki gives in his book is that education has nothing to do with your being rich. A person can't become rich by his degree or qualification but it is his mindset that makes him rich. If your mindset is that of earning money, you will definitely earn the money. But if you are a lazy procrastinator, then no matter what kind of degree you get, you will never earn money and you will never become successful. This matter also relates to the law of attraction. This law tells if you are obsessed about something in life. If you are passionate and crazy about something, then it is not possible to never get that thing in life. The law of attraction brings everything in front of you that you want. If you want become rich, you will become rich. If you want to become CEO of a company, you will become CEO. If you want to travel the world, you will travel the world. The only condition is that you have to be passionate about it and you need to take the right steps.
The second thing Robert advocates very strongly in his book is that every concept at our schools and colleges is taught but the thing that is never taught is financial literacy. Students are taught the theory but its practical application is never taught. The important skills and concepts in a professional life are never taught in the academic life of a student. Our schools, colleges, and universities entirely go parallel to our professional structure. The skills we need for success or to earn money have no relation to our schooling or university education. Its best example is our Memon Community in Karachi. These people have remarkable business sense. This business sense is neither taught them at school nor at any university, but they grow from childhood with financial literacy. The bottom line according to Robert Kiyosaki is that your education has nothing to do with your being rich. If you want to become rich, you must have that mindset or thought.
The next concept is so simple and awesome. If you understand it, you will undoubtedly become rich. Robert Kiyosaki calls it the 5-point rule of financial literacy. This rule is so simple and easy that anyone can understand to implement it in his / her life. Its 5 aspects are income, expense, assets, liability, and cash flow. Income and expense are very obvious. Income is anything that earns you money while expense is your expenditure. Assets and liabilities are the main things. These two concepts are essential to comprehend because the definitions we learn in accounting or commerce are entirely different. According to Robert Kiyosaki, everything that earns you money is your asset, and everything that draws money from your pocket is your liability. This is a unique concept. It makes one wonder. For example, usually purchasing a plot, bungalow, or land is considered to be an asset, but according to Robert, it drew money from your pocket. Therefore, it is not your asset. People buy a car and consider it as an asset but in fact, it is a liability as it spent your money. Anything that puts cash in your pocket is an asset. The house that you have bought and you rented it out. The rent that you get every month is your asset. The car you have purchased is your asset when it earns money. Otherwise, everything else is your liability. This is the main difference between the thoughts of the rich and middle or poor people. The rich make assets. They spend money on things that in return earn money while the middle class always spends money on desires. They spend money on plots and houses their entire life and never enjoy life or become rich because their thought is limited and stagnant.
The next thing that Robert Kiyosaki explains in his book is your income. It doesn't make a difference how much you earn or whether you are rich or poor. It is your expense pattern that will decide your destiny of being rich or poor. The poor convert their earning into expenses and that is all whereas, the middle class spend beyond their means and take liabilities in the form of student loans, house loans, car loans, etc., and deposit installments their whole lives that constrain them to the middle class. The expense pattern of the rich is entirely different. They make assets from their income. They managed their expenses from the money that assets earned them. As a result, they become more rich.
The next thing Robert Kiyosaki has discussed in his book is a salary increase. People often believe that an increase in their salary will make them rich which is not true. According to the principles of economics, your consumption or expense is a direct function of your income. An increase in your income means an increase in your consumption. Thus, you have to concentrate on the increase of your income but on the other side, you have to manage your expenses too.
The controversial concept of Robert Kiyosaki is his concept of liability. According to him, anything that spends your money is a liability. Therefore, he believes that children are a liability till the time they start earning. He also thinks of parents as a liability after the age of sixty as they are no longer able to earn. But in our society, we think it is our responsibility, not our liability. It is a virtue to take good care of your parents and children and spending on them is believed to be the best spending ever and any negligence in this regard is evil. Robert Kiyosaki says this because of the huge difference between our cultures, morality, and norms. So, for us, these concepts don't work.
But the most magnificent thing about Rich Dad and Poor Dad is its concept of financial literacy. Every child should be taught financial literacy to manage his cash flow better when he grows.
Full-proof method for becoming rich
You don't need to know assets, liability, or cash flow. This 5 step principle for becoming rich will blow your mind.
First, you need to have the willingness to learn. You should create the urge or a capacity for learning by unlearning the concepts that you have learned and keep yourself ready to learn new and practical things. Often people fail due to their ego and they are never willing to learn something new.
The second essential step for getting rich and successful, you need to have a hunger for knowledge and growth. If you are not ambitious, you will never be successful no matter how skillful you are. You must feel the fire beneath your feet that does not let you remain stagnant but keeps you moving for better life opportunities.
The third step to getting rich, you need to have perseverance, dedication, and commitment. It has been observed that mediocre people often become more successful than talented ones because of their perseverance, dedication, and commitment. They never give up despite many failures.
The fourth step is the pursuit of excellence. The pursuit of excellence means chasing your goal until you crack it. Once you start doing something, Then Try to make it the best of the best. Do it repeatedly until you get excellence in it. The champions, the gold medalists get excellence through practice and repetition. So, take it to excellence once you start to do something, and never give up.
The fifth step is the compounding effect. It is one of the most fundamental and heart-shattering effects. According to this concept, if you change your life only 1 percent on a daily basis which is the minimalist level, one day you achieve exponential growth. Therefore, introduce a compound effect in your life. The majority of the people fail because they are not consistent and they don't follow the compound effect. They execute a thing for two or three days and then leave it in the middle uncompleted.