Insights from Rich Dad, Poor Dad by Robert Kiyosaki fost Robert Kiyosaki learned about money from two dads —his biological father and hs best rind’ father. Both men worked hard and earned {good Incomes. But is father struggled to pay bills hic whole lf, whle bis rend’ father became one ofthe wealthiest enn Hawall In Rich Dad, Poor Dad Kiyosaki reflects on why hs father remained poor and why his rend’ father became rch Fundamental Difference #1: Poor dad acquired liabilities. Rich dad accumulated assets. \When poor dad started his carer, he saved upto buy anew house and anew car. Poor dad assumed ahouse and car were 2sets, but ike many micle-ass people, he én understand the cfference between assets spd abt. “nssets put money in your pocket Liabilities take money out of your pocket.” - Robert Kiyosaki \When poor dad bought anew home, he acquired new expenses: property taxes, home insurance, home maintenance costs, and a mortgage. Mest of poor dad’ income was used to pay down these expenses ich dad took a diferent approach. Instead of ung his savings to buy a house or new car, he purchased income generating assets. Rich dad invested ina construction company, two restaurants, and rental property ich ded gradually increased his asset column while keeping his tving expenses toa minimum. He drove an old beat tuckinstend a aking oxt loan to buy anew tuck He ive in 9 sadest home and paid a tle ren a possible, When rich dad eventually bought house and 2 new car, he én pay for them his assets i. The recuring income from his businesses an rental properties covered his house expenses and car expenses Poor dad worked for money. Rich dad mace money work for him. “oncea dollar goes into your asset column, it becomes your employee. The best thing about money i that t works 24 hours 2 day and ‘an work for generations.” - Robert Kiyosaki ‘Don't focus on increasing your paycheck; concentrate your efforts on reducing expenses and acqulring income generating assets. Look for Income generating assets In four areas: Businesses managed by other people. Rich dad owed several Businesses which required just afew hours ofhis tine each week iyorak sas, “If youhave to workin a business,’ not a busines, k's job” (See my summary of The EMyth Revisited fr a step by step gulde on creating alow maintenance business) ‘Stocks and bonds that appreciate and pay didends. Income generating real estate (.c., townhomes, apartment complexes, storage units and commercial bulings) Royalties on products and intellectual property (Le, musi rt and utility patents you create or buy the righ to sel. \When the income from your assets can cover your ving expenses, you are fancy re. You no longer need to go to ajob you hate jst topay bis and survive. To paraphrase Buckminster Fuller, "The measure of person's wealth isthe numberof days they can survive without having to work.” \When you use your assets te generate income, you pay ess tax(a secret all rich people know). For example, income from stocks held for ‘mate than a yearis taxed at 15 (nota your income tax ate, which on he ashigh 38378) and assets purchaced through a personal corporation (an entity rch people create to purchase assets) are taxed ata lower corporate ate. Knowing that income from assets is ‘taxed lower tran income fom ajo is one example ofthe second ctference between rich dad and poor da. Fundamental Difference #2: Poor dad was a type 1 investor. Rich dad was a type 2 = investor Type | | Type2 ‘omental nyo sosbreden ipo edn sd ik arapomat H [Atype tlnvestrislike someone who walks Into a computer store and plcks aPC off the sett ‘Atype2 Investors ke someone who buys indMidual PC components and bulds her computer after extensive research one “Type a investors make ime to understand markets and ind investment oppartunities. For example, Kijosal bought a small rental property in Oregon when Calforia was going through housing boom. Gradually buyers in California came into Oregon and drove housing pices up. Kiyosak sods Oregon property and bought a larger property in Phoenix, where a new housing boom was beglnning. Become a type 2 investor by studying economic cycles, emerging markets, business fundamentals, ane bas finance books, one «courses, and poseasts so you have trong cancion fn the ascets you Buy while cedacing sk “There is gold everywhere. Most people are not trained to see it.” Robert Kiyosaki vw ProductivgyCame.com