Rich. Something that I’m sure many (if not all) of us here are trying to become. It’s not easy becoming rich, and the fact that there isn’t a set blueprint makes it even harder. However, what if I told you that there are some ways that you can start building your wealth today that could lead you on the path of becoming wealthy? The book Rich Dad Poor Dad written by Robert Kiyosaki is a classic personal finance book that gives some of the most important advice on how to become rich. Today, we’ll talk about 5 lessons we got from the book so that you can start your journey to becoming a millionaire right now.
How to become rich
Tip #1: Rich don’t work for money
A bit of a controversial tip, as most people assume that having a high paying job will instantly lead to becoming rich. However if that was the case, how come there still are doctors and engineers in the world struggling with their personal finances? Instead of trading off time for money, use your money to make more money for you, so that as you sleep your net worth is still increasing. Some great assets worth checking out include the stock market and real estate, as you can earn steady returns without having to put in work all day like a 9-5.
Tip #2: Understanding financial literacy
The biggest thing that we all need to work on is building up our assets column. What this means essentially is that we have to put our money towards growing more money (refer to tip #1) first before we spend the rest on our expenses and liabilities. In fact, we should strive to have a balance sheet to the point where if we were to get fired from our day job, the cash flow from our assets would outway our living expenses and other liabilities, making it so that we can live off on our investments. This is what Robert refers to as “being wealthy”.
Tip #3: Mind your own business
Always have your own sort of business, even if you work a 9-5 job. Having your own business will lead to wealth the fastest, and even if right now you’re busy with a regular job, you can start something on the side that will grow your wealth. Again, this tip refers back to tip #1, but it shows that really anyone can start their own business, and should start one. In fact, small businesses and corporations get great tax benefits, so you could be legally writing off some of your expenses as business-related and save you some cash next time you got to file your taxes.
Tip #4: The rich invent money
No, we aren’t counterfeiting dollar bills to get rich. Essentially, this tip is referring to the fact that we have to stop thinking about money as an object and start thinking about it as a byproduct of financial knowledge. Think about it this way: would you rather have $1 million sitting in the bank collecting barely 1% interest or in-hand ready for an investment opportunity when it presents itself? By educating ourselves about different industries and ways to grow our money, we’re essentially engineering money out of thin air as our investments take off because of the great research and knowledge we have. Stop treating money like it’s a physical thing that only hard labour can acquire, and start thinking of it as a byproduct of being financially literate.
Tip #5: Work to learn
Another thing people tend to do is work at a job for the pay and benefits. There’s nothing wrong with that, and sometimes you have to in order to make ends meet. However, if given the opportunity, you should take a role in order to further your skillset. For instance, working at Mcdonald’s is seen as a not so glorious title. However, you can see how the franchise manages employees and creates a system where food is quickly prepared and served with efficiency. Within every job, there are skills and experiences that you can take away, and surely if given the opportunity to take a job that will develop new skills, you should take it.
There it is, 5 tips on how to become rich. Hopefully by now, you’ll have some ideas on what you need to do next in order to increase that asset column and develop the skills you need in order to achieve financial wealth. Of course, this isn’t everything in the book, as Robert Kiyosaki goes in depth on his childhood and provides many examples on ways he gained wealth using these lessons.
If you enjoyed these tips, I’d highly recommend checking out his book here. As Warren Buffett puts it, “The best investment you can make, is an investment in yourself… The more you learn, the more you’ll earn”.