By showing interest to read this article, you have proved that you want to become rich. So, what is required to become rich? Well, your answer could be –
- Hard work
- Education or something else.
As per me, only one thing can make your rich and that is “Strong Desire”.
Well, I am not going to talk anything about desire. However, I will be sharing lessons learned from popular book Rich Dad Poor Dad by Robert Kiyosaki. If you follow the ways given in the book you will surely get rich.
Become Rich via Rich Dad way
Lessons learned from this book are given below.
- Make investments that will bring passive income.
- Know the difference between an ASSET and a LIABILITY, and only buy assets.
- A True Asset will bring positive cash flow each and every month.
- Live below your means, while constantly increasing your means. (Try to increase your active income)
- Make your PASSIVE INCOME cover your Lifestyle Expenses forever.
- Buy assets first, luxuries last.
- If today you are unable to buy something ask yourself “how can I afford it?” This stimulates your creativity.
In addition to above, Rich Dad says “Don’t work for money, let your money work for you”. You should develop a system or business that generates money for you. You should focus on passive income and not earned income. Let’s try to understand this in detail.
Earned income or Linear income is any income that is generated by working or doing a job. Your salary is an example of earned income. You need to work daily in order to earn money. If you stop working your income stops.
Passive income or residual income is income that is generated without doing any work or doing work only once. The example of passive income is rental income,(from real estate), royalty income (from MLM businesses) dividends (from shares) and interest on savings. All examples given above are examples of passive income which come from assets.
So, in order to become rich, you should build an asset that generates passive income for you.
Rich dad shows Cash Flow Quadrant and said that we have four types of people in the world. The employee, Self- Employed, Developer and Investor look at following diagram.
If you are an employee or self-employed you are in the rat race. You may be secured as of today but not secured for tomorrow. You may become rich but chances are less. What you need to do is start your journey towards becoming either developer or investor to become rich.
If you are developer or investor who owns up a system or if your money works for you, you are on the correct side and your chances of becoming rich are bright.
You can purchase this book from Amazon – Rich Dad Poor Dad.