I’ve been reading a lot of Robert Kiyosaki these days and I feel enlightened. Like a child in his first Aha! moment, I was surprised by the profundity and power of this book and at the same time, annoyed at myself for not having read Kiyosaki’s books sooner.
I spent almost four years in B-school but not one of my professors there ever mentioned or made Kiyosaki a required reading. In fact, these types of books were classified as self-help and students were told to shy away from, like the plague, because self-helps, we were told, are just commercial ploys intended to capture the single-minded non-readers.
They were right about the single-minds but wrong about Kiyosaki.
The book’s power lies in its simplicity, honesty, matter-of-fact discussions, and use of stories, or allegories to drive home a point. I was not at all bothered by those who criticizes Kiyosaki for the seemingly fictional characterization of his Rich Dad (no one can locate him and Kiyosaki is mum about his whereabouts) because, I guess the use of Rich Dad is a literally license.
Rich Dad Poor Dad, like his other books, is for those who want to be wealthy. The first step to creating wealth is to find out where you are right now. Kiyosaki thus introduces the Cashflow Quadrants: the E for employment, S for small business and self-employment, B for big business and I for investments.
He said that most people were/ are educated to become good employees who pay their taxes religiously (since income taxes are automatically deducted in company’s payroll), and eventually retire upon reaching the age of 65, hoping that their pension plans can pay for their lifestyle after retirement. People in this quadrant are POOR.
The other poor people are those who have small businesses, the kind where owner is also the sole employee. Poor people have one thing in common: they lack passive income and they thrive in fear (fear of losing their jobs, fear of investing their money).
The other two quadrants are where the rich people are: big business owners and investors. Rich people are risk takers because they understand what they are doing. They are not only educated in the traditional school sense but they have, most importantly invested much time in their financial education. While poor people work for money, rich people let their money work for them.
Unfortunately, our formal education system does not teach us these things. Is there a grand conspiracy somewhere to make people stay poor? I won’t allow myself to be a victim of that. In fact, I have given up my Saturday mornings for my financial education. I’ve been attending the Cashflow games in Ortigas Center organized by the Create Abundance 2020 Business Community Continue reading