We all have seen our parents struggle whole of their lives and the knowledge they gained from those struggles, they passed it over to us or I would say, TRIED TO.

In todays age, majority of youngsters struggle with their finances. They do land up in a good paying job after years of struggle of getting good grades but after that they start running like headless chickens with the money they earn.

Why?

The reason is lack of Financial Intelligence. This is something which no one teaches us at school or colleges but this is what that will make your future aspirations & desires come true.

Rich Dad Poor Dad Book Review - 5 Lessons I Learnt from the book

Primarily, this is what the bestselling book ‘Rich Dad Poor Dad’ aims to teach and below are few mind boggling lessons I learnt from it.

1.Focus on making money instead of Saving money

Since ages, our elders have stressed on saving a portion of our monthly income for future. However, its 21st century and things have changed drastically. Today there are numerous options for everyone to invest & grow their money. We save money for only two reasons.

That is to achieve:

Defined Goals:

These individuals are crystal clear about why & what they are saving for. Like my friend who is 25 and has a goal to buy his own house in 5 years. Similarly, many have short & long term goals but unfortunately very few use their earned money as a catalyst to speed up the process.

Undefined Goals:

These individuals save money for rainy days.They live in fear of uncertainty & thats why they work day & night to secure their future. Unfortunately, it is observed that these are the highest in number but lowest in financial intelligence.

Considering the above two personalities and continuous increasing inflation, it is evident that just saving a portion would not help. If you also have goals like me, it would be best to invest that saved money in various assets after understanding your needs & the assets you are investing in.

2.Passive Income

Road to Financial Freedom Passive income i.e. an income which one earns without putting in any effort or time. Some of the examples could be real estate value appreciation, rental income etc. However, this is easier said than done. No doubt this requires a thorough research & planning to choose the source of the income and then make sure that after a while it starts generating revenue without any work.

A simple example would be rental income for which one has to first shortlist a location & then accumulate wealth in order to buy it. Once acquired, a strategy is needed to rent that location at highest profit which includes managing expenses & risk like repairs, fees of property agents etc. At the end, its very important to understand that the income generated is sufficient to match your target amount which you aim to achieve.

As I mentioned above, rental income is only one of the examples. So think right now what can help you generate passive income & start working on it today.

3.Buy Assets not Liabilities

Assets & Liabilities!

Who doesn’t know its definition. Right?

However, trust me after reading this book made me question my beliefs. This book trashes all our traditional beliefs & that too in the most logical way.

For an instance, we have been taught since our childhood that the best asset one can accumulate is owning a house and primarily thats the reason we take loans & buy a house considering it as our great achievement. Unfortunately, thats a huge MISTAKE.

Reason is when you take a loan, you incur debt. Now lets say you got promoted and household income increased significantly after which you decided to buy your own house. The EMI or Easy Monthly Instalment seemed manageable but the problem arrises when the expenses to maintain the house like electricity, repairs etc & matching the standard of living increased which definitely burdened your pocket and then to balance those expenses you incur more debt either in the form of loans or credit cards.

Therefore, its not a rocket science to understand you will always be busy accumulating wealth just to survive & pay bills and the value of your house that appreciates with time would end up getting utilised to buy a new house in replacement.

Such kind of people spend their lifetime adjusting & compromising with their dreams and these are the people we term as, the Middle Class.

Hence, always be critical of what you are buying & understand if thats an Asset or a Liability.

4. Learn High Income Skills

High Income skills. A term most of you has never even heard of but these are the skills which the rich are very well aware & focused in harnessing. High-income skills are not taught in school, colleges or professional courses. In fact, no one teaches you this skill but you. You are your own teacher & student.

Sounds crazy ! Right?

But its true. What one requires to learn high income skills is self-awareness. An easy example would be Russel Peters. This is the guy who can make anyone laugh but do you think he learnt that in school or college? He understood his talent & then worked on polishing and marketing it.

This is just one example, other examples like consulting, public speaking etc are also a part of it. So just find the UNIQUE you and then put it to use for profit, you will be rich in no time.

5. Be with people who help you grow

The world works on energy. Positive energy sow new seeds of motivation & negative takes even the ones we already have.The worst part is we cant avoid this negative energy no matter how hard we try. Therefore, its necessary for us to have a regular supply of positive energy & also generate new sources everyday. 

These sources are none other than the People you spend time with daily. The longer you are with someone, higher is their impact on your mindset.

Hence, spend most of your time with people who share the same enthusiasm like you & help you grow everyday.

Obviously, this is not a summary of the book. The book is great for millennial who just hit their first job and thinking how to move forward with their finances or even those individuals who would like to get an insight on Financial Intelligence.

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