A different genre book is what I took up this time upon the insistence of my colleague. Nevertheless, it turned out to be a very interesting, exciting and facts-revealing read!
I could never guess the content/theme of the best seller just from its title. When my colleague used to mention the facts therein, I was just open to contradiction as they used to seem ridiculous. However, this book completely wiped out my inherent perceptions and lent me a different outlook towards acquiring what’s called as ‘Financial Intelligence’.
Below are few lessons/takeaways from the book that primarily makes the reader understand the differences in perceptions/ideologies of a Rich Person and a comparatively Poor Person.
1. The author says poor dads teach their kids to work for money. However, the rich counterparts teach how they make money work for them. He further brings out the contrast between the ways they think. Poor dads averse risks while the rich ones know that the ultimate pleasure lies in taking risks and have learnt how to tackle them over the course of time. Working under someone makes one dependent. While working for self makes one financially independent. This way one isn’t a slave, but a master. One should strive towards mastery.
2. It doesn’t matter how much money one makes but that how much one saves/keeps. An individual’s financial skills/patterns are often reflected by the way one earns/spends. Two simple cases arise;
If Income = Expenditure, then Savings = 0. This is the usual scene for middle and the middle and lower strata of the society – yes, with some exceptions.
Even if one is an average earner, the spending patterns and liabilities[with priorities set] will play crucial roles in the savings one makes.
The rich differ in the way that Income > Expenditure. The inequality is enough to explain why the rich get richer. Probably, this very ignorance allows the commoner to question about the rich.
There are two important terms that need introduction.
Liabilities – Those that take away money from one’s pockets. Focus area of commoners.
Assets – That put money into one’s pockets. Focus area of the rich.
3. The author urges the readers to imbibe financial intelligence. He asks the financial literates to earn assets and not liabilities, to focus on the asset column rather than the income column.
4. He also says that the rich play smart. Introducing the tax system, the author dwells deep into the facts that rich earn, spend and then pay taxes, while the rest earn, pay taxes and then spend owing to which the latter end up spending more on taxes than the rich. A very very notable difference!
5. It’s the bold, not the smart who march ahead. Four skills are of prime importance to acquiring financial intelligence – accounting, investing, marketing and law. Risks should not keep us restricted, rather start working smartly to generate money.
6. Fear is one such inhibition that afflicts many and restrains them from pursuing their goals. As such, irrespective of the talent one possesses, fear takes the toll. We must learn to get over the fear and start taking risks.
7. People who lose are the ones who eventually win. One must find opportunities to turn failures into successes by learning from them. Losers are those for whom fear of losing conquers the passion to succeed. The author also says that the ‘I-don’t-wants’ block one’s mind and don’t allow one to look further. One must avoid these and face them as they are encountered.
All in all, the author raises points that we commoners fail to look or we know but don’t pay heed to. Some mind blowing facts that would take you by a surprise. Lots of takeaways!
A must read indeed!