Nico8)"Mastering the Rich Dad Mentality A Deep Dive into Kiyosaki's Motivational Insights"

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In this Video, We Will Talk About "Mastering the Rich Dad Mentality A Deep Dive into Kiyosaki's Motivational Insights"

1: Educate Yourself Financially:

‘The Rich’ teach their kids important lessons about growing wealth that we don’t learn in school

What separates the rich and the poor? One part of it is that money or finance is rarely taught in school. Kids learn about money at home. This means kids often end up learning and repeating the same habits that kept their parents poor. A huge failure of our education system is that it does not teach basic financial literacy.

Robert Kiyosaki was lucky to grow up with two “dads.” They shared with him wildly different perspectives on money and life:

His “poor dad” was his biological father. Poor Dad was very well-educated, having graduated from top universities with a Ph.D. He had a stable middle-class job working for the government. Poor dad always told his son to get a respectable degree, and then work his way up the corporate ladder. The most important things to him were job security with great benefits.

His “rich dad” was his friend Mike’s father. Rich Dad never graduated from elementary school, but he was building a business empire in Hawaii. He already owned several small supermarkets, plus warehouses, restaurants, and a construction company. Rich dad also believed in education, especially financial education, but he did not recommend a typical career and investing strategy, which makes it almost impossible to become really wealthy.

2: Shift Your Mindset:

‘Rich Dad’ taught Kiyosaki how money works through real-world experiences, not lectures

Rich Dad agreed to teach the boys how to make money, but only if they worked for him. He offered them basic jobs at one of his small supermarkets. The boys began working 3 hours every Saturday. The work was very boring and repetitive, mostly keeping the store clean and organized. Kiyosaki had to miss his softball games which he loved.

They were only being paid 10 cents per hour which even in the 1950s as a kid was not much money. The minimum wage was 25 cents an hour at the time. When Poor Dad learned his son was being paid less than that, he was outraged. He felt his son was being exploited and told him to quit immediately unless he got a raise.

After 4 weeks of working, Robert was not happy. Rich dad had promised to teach the boys, but Robert hadn’t seen or talked to him for weeks after that first meeting! He was starting to feel angry, especially being paid so little. So he told Mike he was ready to quit. Mike just smiled and said Rich Dad had expected this to happen. Rich Dad had given Mike directions, that when Robert was ready to quit, then Mike should tell him to go talk to Rich Dad.

So Robert went to Rich Dad intending to ask for a raise. He confronted Rich Dad about not fulfilling his end of the deal—not teaching the boys how to make money. When Rich's Dad heard all this, he asked:

3: Embrace Entrepreneurship:

Spotting opportunity is a skill we can acquire, to help us escape ‘the rat race’

Rich Dad said it was very important to learn how not to be controlled by fear or greed. When most people go to a job they don’t love 8 hours every day or urge their kids to finish a degree that leads to a secure career, they are being run by fear. Even rich people often have a bigger fear of losing it all than when they have little money.

So Robert went back to work, but this time making no money. Rich Dad said this was essential for the boys to learn the truth about money. Robert didn’t like not being paid, but he trusted Rich Dad who said this would teach them how to really make money.

Rich Dad said not getting paid would train their minds to see opportunity. And that’s exactly what happened. One day Robert and Mike noticed the woman running the supermarket was getting rid of the old comic books. She cut half the cover off each book and threw the rest away. She said she had to give the covers back to the distributor for credit. So the boys asked if they could have the old comics, and the distributor said they could keep them if they did not resell them. So they began collecting all these old comic books.

Then the boys opened a comic library in a room in Mike’s basement. They charged neighborhood kids 10 cents to come and read as many comics as they wanted for an afternoon. Since the comics usually cost 10 cents each, this was a bargain. They hired Mike’s sister to work at the library for $1 per week. They made $9.50 every week. This lasted for 3 months until the library had to be shut down because some rowdy kids came and caused trouble. But the lesson stuck.

Most people are too focused on making money in the short term with a job, so they never learn how to spot business opportunities. Rich Dad had taught them a priceless lesson. By having the two boys work for no money, they learn how to be creative and find a new way to make money.

4:  Understand Assets vs Liabilities:

‘The Rich’ buy assets that generate income, while ‘The Poor’ buy liabilities that cost them money (like a house and cars)

More money usually does not solve financial problems. You see this truth most clearly in people who win the lottery or land a big inheritance, only to be broke again a few years later.

Even people with high incomes often struggle financially because they spend their money in the wrong direction. With more income, most people simply accumulate more debt. As a kid, Robert wanted to things like a new baseball glove, while adults wanted to buy much more expensive toys like cars or boats. Higher-income people are most often stuck in the same trap as everyone else. Most people don’t understand this, so Kiyosaki is often asked by young people how they can increase their income.

Rich people focus on buying assets, not working more for money. How do you know if something is an asset? By looking at if it brings you money or costs you money. (This is what business people call cash flow.) For example, a car is not an asset because it costs you money to use and maintain, and it also decreases in value the longer you own it!

If something provides you income, then it is an asset. If it costs you money, then it is a liability. Good asset types include:

Stocks,

Bonds,

Real estate that generates income,

Businesses that don’t require your physical presence.

Intellectual property that gives you royalties (like music, books, etc)

Rich dad explained this point of view over and over, which I call lesson number one: The poor and the middle-class work for money. The rich have money to work for them.

5: Manage Cash Flow:

Real estate is a great asset type because it provides a stable foundation

Kiyosaki always starts with a small property and then trades up to larger and larger properties. In the US there are big tax benefits to trading up like this. You can put the money from a real estate sale into a 1031 tax-deferred exchange and use that money to directly buy another property without paying capital gains tax on that transaction. This means you save a lot of money and can grow your real estate investments much faster.

For example, here’s how Kiyosaki transformed a $5000 down payment into a million-dollar investment:

In 1989 he was living in Portland Oregon. This was just after a big market crash and local real estate was selling poorly. He often jogged through a neighborhood filled with cute little gingerbread houses. There were many for sale signs in this neighborhood.

One day he stopped and talked to one of the house owners. The owner was discouraged because nobody seemed interested in buying his house, and it had been on sale for over a year. Kiyosaki offered to look inside the house and a half hour later he bought it for $45,000. This was $20,000 less than the asking price, but the owner was happy to get rid of it. Kiyosaki only paid $5,000 as a downpayment.

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