The Only Rules Worth Remembering From Rich Dad, Poor Dad
Rich Dad, Poor Dad is a massive best seller.
Robert Kiyosaki launched a whole empire behind it.
I’m not a fan of guru’s that sell “success” but I do remember reading Rich Dad, Poor Dad as a kid.
It did move me.
Let me save you some time though, there are only two rules that I feel are worth remembering.
Rich people buy assets.
Buy things that have potential to appreciate in value or provide income.
Stocks, bonds, cryptocurrency, real estate, private businesses, etc.
Assets give your money the ability to grow and generate more money. The more assets you own, the more your wealth grows, the more assets you can buy.
This is how wealth compounds over time and why it’s so crucial to start as soon as possible.
By contrast, Rich Dad calls out the non-rich for buying liabilities instead of assets. He says they are too busy over-paying for cars or other goods that puts them into debt.
They are not able to invest because there’s no money left over to do so or because they are afraid of taking risk.
Rich people take risk.
Rich Dad calls it chutzpah which is probably the most cringe-worthy way you could describe taking risk. But the point is important.
I have a relative, with 90% of his net worth in a high yield savings account. 🤦.
No matter what I tell him, for some reason he’s just not comfortable with stocks.
To truly grow your wealth you need to be comfortable with occasionally losing some money.
This doesn’t mean be a gambler.
It means taking well sized bets with a positive expected value, such that over time, you should come out ahead.
Educate yourself enough on what the risks are so you can accept them or use a small amount of capital such that you are comfortable with the risk.
In general, you must take more risk if you want a higher return.