Book Information: Douban Reading
This article is a summary of the book "Rich Dad, Poor Dad". The book is good, but it has too many stories, so I extracted the valuable information to create a condensed version. I want to emphasize again that this is only a summary of the content of the book, not investment or financial advice. In the following text, all references to "I" refer to the author.
Stop wasting time#
When you find yourself in a difficult situation, the best thing to do is to stop and not make the situation worse. Don't get stuck or hit a wall before turning around.
Money is your never-ending employee#
Once your money is invested in assets, it should stay there forever.
Imagine this: Once money becomes your asset, it becomes your employee. The biggest advantage of money is that it can work day and night, even creating value for your descendants.
Unlocking our potential#
Each of us has tremendous potential and our own strengths. But often, we are plagued by self-doubt. What truly hinders our progress is not a lack of technical knowledge, but a lack of confidence.
Five financial obstacles#
Even people with a deep understanding of finance may fail to build assets that generate a significant amount of cash flow due to five key reasons. These five obstacles include fear, cynicism, laziness, bad habits, and arrogance.
Doubt keeps us stagnant#
We are always worried, "What if the economy collapses after I invest?" or our friends and family remind us of our shortcomings, saying, "If it's such a good idea, why hasn't anyone done it yet?"
These doubtful words often stress us out.
Value analysis over criticism#
In the stock market (referring to the author's country's stock market), I often hear people say, "I don't want to lose money." But who likes to lose money? The reason they fail to make money is because they fear losses.
These people don't conduct in-depth analysis; instead, they choose to close their minds to the powerful investment tool that is the stock market (referring to the author's country's stock market, understand the spirit).
Why do you want to be rich?#
When people ask me why I want to be rich, I tell them it's a combination of deep emotional "wants" and "don't wants."
Be cautious of listening to poverty or fear#
Don't listen to the words of those who are poor or fearful. I have friends who are always overly pessimistic about everything in life. When it comes to money and investments, they are always overly worried, saying, "The sky is falling!" They can always find reasons to negate everything.
But those who believe in pessimistic news are also overly anxious.
Put yourself first#
The importance of self-discipline: If you can't control yourself, don't expect to become rich. It's meaningless to earn money and then squander it.
How to effectively prioritize yourself#
- Avoid getting into large debts. Reduce expenses, build assets first, and then consider buying a big house or expensive car. Getting caught in the "rat race" is not a wise choice.
- When you are tight on funds, don't use savings or investments. Let the pressure stimulate your financial innovation and find new ways to earn more money before paying bills. This way, you not only improve your ability to make money but also enhance your financial wisdom.
Wisdom of the rich#
The rich understand that the purpose of savings is to create more wealth, not to pay daily bills.
Choose your role models#
Choose your heroes: the power of myths
Having role models can inspire the hidden potential within us.
"If they can succeed, I can too."
Your world is your mirror#
"Indeed, your world is just a reflection of yourself."
Education and wisdom about money are crucial#
Start early. Read a book. Attend seminars. Practice. Start with small things. I turned $5,000 in cash into a million-dollar asset that brings in $5,000 in monthly cash flow in less than six years. But my learning started from a young age. I encourage you to learn because it's not difficult. In fact, once you master it, everything becomes simple.
Passive income and portfolio income#
When Rich Dad says, "The rich don't work for money, they make money work for them," he is referring to passive income and portfolio income.
Passive income often comes from real estate investments (referring to the author's country's real estate). Portfolio income comes from financial assets such as stocks and bonds (referring to the author's country's stocks and bonds).
Portfolio income is the key to making Bill Gates the richest person in the world, not just ordinary salary income.
The secret to getting rich#
Rich Dad often says, "The key to becoming wealthy is to quickly convert earned income into passive income or portfolio income."
He also says, "Earned income is taxed the highest, while passive income is taxed the lowest. That's why you want your money to work harder for you. The government (referring to the author's country's government) taxes your hard-earned income more than the income your money works hard to earn."
Don't pay others first#
Don't be the kind of person who always prioritizes paying others.
Failure is just a step towards success#
In everyone's life, before success comes, they will encounter many temporary setbacks, even failures.
When setbacks occur, the simplest and most common reaction is to give up. This is the choice of most people.
But remember, when failure appears, it means success is not far away.