JESSA JOY BARILLO

BSA 2-3

FINANCIAL MARKETS

BOOK REPORT

03- 08-2020
Just like what Bill Gates said “If you are born poor it’s not your fault, but if you die poor

it is your fault” and we only have one chance of life and there’s no way we can turn back

time, so what matters is how we manage not to be afraid of losing and to taste downfall.

Just like the contrasting point of view of a rich man and poor man, we must not consider

one point of view and ignore the other side instead we learned from both of them.

The introduction of this book is somehow already an eye opener, just like every day we

go to school and study accounting because we know that by 2022 we will be starting to

face the world, earn and eventually travel the world but the thing is, in four years of

studying we only opt to learn the basic and complex part of our major subjects and being

encourage by professors to adopt that concept so In the latter time were be able to spend

our lives working for money. Now, I realized that is also significant if one of our

professors encouraged us to learn to become rich because reality sucks and there are lots

of odds we cannot stop, instead, how about we take guts and begin building wealth.

How? by educating ourselves in financial education.

First and foremost let me define money as it is likely one of the center topic of this book.

Money in Merriam Webster is defined as something generally accepted as a medium of

exchange, a measure of value, or a means of payment. For some reason, in the

introduction of the book, the poor dad would say, “The love of money is the root of evil.

”While the rich dad on the other side would say. “The lack of money is the root of all

evil” and that simple argument made me curious for one thing, Can we live in the world

where there wouldn’t be poverty? Because for me, if we program in our mind set the

negative side of money and make ourselves comfortable in our current financial status,

sooner or later it will eventually lead us to poverty.

There’s no one who wish to experience poverty, no one wants to struggle yet many

experience it. Just like the reason why the poor dad is considered poor is because of His

thoughts and actions which leads him to what He is now. In the other side, the rich dad

would say that the money is power- not a so called superman or batman power but a

power to grow wealthier in this world full of increasing change and uncertainty.

I am inspired by Robert Kiyosaki’s saying that “You’re only poor if you give up. The most

important thing is that you did something. Most people only talk and dream of getting

rich. You’ve done something.” The thing is, many of us are born poor and that was not

our mistake. And just like Robert Kiyosaki, at the younger age he’s already curious about

how to get rich and what are the ways he can do in his younger age to start earning

wealth but even though he lacks the capability to earn money in his age, he started

planning with his friend not afraid of the process along the way, they looked for

something wealth creating business and they planned it and started it with so much

heart. The thing is, they are not afraid of what will other people will say and tell about

their ambition and even though it failed at first, just like what the rich dad says “you’re

only poor if you give up” and that is what we have to realized, that failures are just a

word that must push us not to stop dreaming but to stand up and not give up. And most

people never see that mind will show you ways of getting money and will see

opportunities so just like the two kids, the moment they see opportunity, they used their

mind formulating ideas and spent several thinking.

“Why Teach Financial Literacy?, financial literacy is never been a new topic for

accounting students but never intended to dig deeper understanding on what is the

importance of it just like how we seek for literacy and not for financial literacy itself.
According to Investopedia, financial literacy is the ability to understand and effectively

apply various financial skills, including personal financial management, budgeting and

investing. Financial literacy helps individuals become self- sufficient so that they can

achieve financial stability. In this second part of the book, the rich dad highlights the

need to master financial literacy and the first thing we must put in mind in starting to

become richer is to dig a deep hole and pour a strong foundation. I highlighted the quote

says “Rich people acquire assets. The poor and middle class acquire liabilities that they

think are assets” and it hits me. Rich dad teach us that as your cash flows grows, you can

then indulge in some luxuries and note that the important distinction is that rich people

buy luxuries last, while the poor and middle class tend to buy luxuries first and that is

the common mind set of many people. If your goal is to rich and have gain real wealth

we will not focus on things that don’t last and too much luxury. Before I got to study

accounting, I do not know the difference between an asset and a liability and how it

applies in real life, most people are misguided with that idea and experience financial

struggle because of they put themselves in debt and more money to pay that debt and

the cycle continues. That is why even though they are known to pursue their profession

successfully and financial illiterate at the same time and in reality many professionals

already in their degree still experiences struggles in money and it is because they have

no financial foundation and they have financial problems on finding ways to get rich.

One thing is this lesson is once we understand the difference between assets and

liabilities; we must concentrate our efforts on buying income-generating assets not just

mere assets for our self wants. And that lesson will surely benefit us and let us hinder

from liabilities that put us in a cycle of financial struggle and debt because one of the

effective financial planning is properly managing debt and learning how to budget and
track spending of irrelevant assets that is not wealth or income creating. In this lesson

there are three simple observation; 1) The rich buy assets. 2) The poor only have

expenses. 3) The middle class buy liabilities they think are assets. So therefore we must

observe our ways of taking care of our cash flows and note that we must junk those we

think are expensive and not essential asset because our excess cash flow can be an

opportunity to reinvest into asset column, such as entering into stock market or

investing into a trusted investment banks. The reason for us to learn this asset, liability,

expense and income generating ideas is for us to be aware of our everyday flows of

money.

“Mind Your Own Business” highlights the saying “The rich focus on their asset columns

while everyone else focuses on their income statements”. One of the important things in

ambitioning to become rich is focus, it made us revolve our mind into our own assets

and it made us build financial foundation without minding other people’s achievements.

I consider the thoughts that we must not confused profession with business- we still

need our own business. There’s a difference between working in a bank as an employee

and owner of the bank. If I were to choose, surely I want to be the owner of the bank and

that is exactly what we need to give focus along the way. Our current educational system

thought us to study hard so that in the future we become a banker or an accountant, but

how about we consider the fact that we also can be the owner of the bank and owner of

accounting firm. That makes sense because our goal here is to make billions for wealth

with a strong foundation of financial literacy. For an instance it’s actually best now to

invest in our early age because the value of money changes over time and the time

makes our money increased, such as the compound investments where it makes our
savings and investments double over the span of time we never imagined. In the book

there are given categories of real assets that a children may acquire in an early age, first

is the investments that you own but do not actually require your presence because that

investments was being managed and run by other person, stocks, bonds income

generating real estate, notes, royalties from intellectual property such as music, scripts,

patents, and also anything else that has value, produces income or appreciates, and has

a ready market. One of the thing we must take note is that Financial struggle is often the

result of people working all their lives for someone else and even some of the professors

tells us the same thing in class. Scratch that, because in reality we must not cling in our

jobs or future jobs and play safe instead we must start minding our own business. It

works not only in jobs but also in studying, the more we focus on how intelligent your

classmate, how about we focus on our study and step up.

“Odds are against success” the reason why we must keep our focus and mind our own

business. Nine out of ten companies fail every year and those that survive the first five

years, nine out of every ten are those eventually fail as well and that is the reality and we

cannot stop that odds so the author of this book itself tells us that he don’t encourage

anyone to start a company unless they really want to and has the desire to continue and

take risks. Think of this way, money works 24 hours and can work for generations and

the value of money as well. The thing why most people fail is because of fear of risking

their focus into something and then when they experience downfall, they tend to stop

making plans and forgot the focus they commit at first.

I highlights how the rich dad explains the history of taxes and the power of corporations.

I also noted that the rich dad did not see Robin Hood as a hero but a crook, why?
Because Robin Hood who robbed from the rich and give to the poor give an impact to

the mind set of taxing people and the masses believed in Robin Hood theory of

Economics who pains more the poor in reality. The idea of taxes was made popular and

is inherent in nature. Since then taxes are being treated as a burden for poor and middle

class income taxpayers and in addition, the rich dad says that “Once government got a

taste of money, its appetite grew” and the more the government grows, more and more

tax dollars are needed to support it. A tax goes to public infrastructures and benefits the

taxpayers and even the non-taxpayers in certain conditions. From the point of view of

the poor dad, he said that the rich are the greedy crooks who should be made to pay

more taxes while the rich dad would defend that the government workers was packed of

lazy thieves. But the rich dad pointed out that the rich created corporation as the vehicle

to limit their risk to the assets of each voyage and the rich put their money into a

corporation to finance the voyage and for instance that the rich experienced loss, just

the rule in corporation, it would affect only to the extent of his investments which is

considered as advantage for the stockholders and members of the corporations. I

highlighted what the author stated “No matter what the “take-from-the-rich” crowd

came up with, the rich always found a way to outsmart them” and even though the poor

and middle class pointed out that the rich suffers the tax more than them but it

contradicts the reality.

In this book, I have come to realized that in the real world outside of academics, there

are much more life can offer than the grades requires. There are thoughts at first of why

we must become financially literate or why we must take risks in life and it thought me

that in most people, when money brought into the topic, most of the people play safe not
realizing that they are losing the opportunity of wealth and the value of money. Why we

must value the money? Because the value of money changes overtime and as well as the

opportunities of investing that money into a good use passes by. Money has a power and

it will give us rewards if we put it into a brilliant mind set and focus.

There are many people who also experiences success such as Bill Gates who is indeed

successful in years and in the other side of the business world, there also who

experiences bankruptcies, layoffs and downfalls. So at this very moment one of the

possible and essential thing we must do is develop our financial IQ because if we do

develop and engaged ourselves into learning financial education, not in the moment but

in the future, it will lead us into prosperity.

Some of us may be still struggling with majors and numbers of accounting, the reason

why we cannot start earning and gain wealth but the powerful thing that make sense is

the little information about financial education is already considered wealth. Whether

you’re professional, student like me, or still finding the right path, the information we

gained is a wealth we must proud of and sooner and later will make us proud must not

miss the point.