Rich Dad Poor Dad: How To Convert Ideas Into Reality

Rich Dad Poor Dad: How To Convert Ideas Into Reality

Are you among the several millions who have been exposed to the advice offered by Kiyosaki in his “Rich Dad, Poor Dad” best-selling book and support materials?

If so, are you among the 90% who the statistics suggest are not in a position to identify with the “rich Dad experience” shared in the book?

As a Poor Dad from Kiyosaki’s S-quadrant – Self-employed/Small business group, I want to apply “Step 10 of his process of developing our God-given powers: “Teach and you shall receive.””

I have drawn some important insights from “Rich Dad, Poor Dad” that I share in this article.

Rich Dad, Poor Dad is heavily skewed towards presenting an alternative view to the philosophy of “study hard so that you can get a good job or profession and achieve financial security.” It highlights the advantages of following the path of developing financial intelligence so as to effectively operate in the right-side quadrants of being an Investor or Big Business Owner.

A great deal of emphasis is placed on pointing to the inadequacies of being committed to striving for a good job or profession and working hard to accumulate savings. Kiyosaki actually makes a good case to show that “savers are losers”.

I come to Rich Dad, Poor Dad late – 6th decade and small business owner for over 3 decades. I could be excused for believing that Rich Dad, Poor Dad is not directly relevant for me. However, I want to share some valuable insights that I take from Kiyosaki.

New beginnings can start at any time

I was inspired by the reminder of the Colonel Saunders story of perseverance in selling his business idea. This came at a time when he could be deemed to have a failed career and at an age when others are focused on retirement.

See also  How To Stay On Top Of Your Insurance Learning how to manage your insurance needs is important. Having quality insurance will ensure that when the unexpected happens you will be covered. There are so many different types of insurance out there and so many different ways to handle your insurance needs. Here we've complied some tips to help you. Auto Insurance When purchasing insurance, whether it be for your home, your automobile, or even on a pet, try to see if the company offers any sort of bundling discount. A lot of times if you have several different policies, say renter's insurance and auto insurance, you will get discounted on both. For apartment dwellers usually renter's insurance is mandatory, so asking this question is tantamount to guaranteed savings. By way of conclusion, bundle and save money! Car Insurance Much like car insurance or health insurance, having a higher deductible can save you money on your premium. The downside to all of this, is that if you have a small claim to make, you will most likely have to pay for the entire repair out of your own pocket. Cheap Insurance In order to get cheap insurance rates it is best to buy insurance online. This reduces the cost of the insurance because most companies will not need to add overhead associated to the automation process of signing up for the insurance. Insurance rates taken online typically drop by five to ten percent. Home Insurance Look into multiple insurance policy discounts. When you bundle your insurance contracts with one company, you will often get a discount of 10% or more. If you currently have home insurance with a company that you are satisfied with, contact them and get a quote for auto or life insurance. You may find that you will get a discount on every policy. Insurance Car Health insurance, car insurance, renter's insurance, pet insurance, travel insurance. All of those things are necessary and they insure one's peace of mind. It is easy to think that paying a minimal monthly amount is ridiculous, but when something catastrophic happens, insurance saves the day. Insurance will save one's car, another driver's car, items in one's apartment, cover the bills for a sick pet, reimburse one for a trip that got cancelled because of bad weather, or pay medical bills. Purchasing insurance is necessary and it should factor into everyone's budget. One hundred dollars every month is far easier to handle than one hundred thousand because something unexpected happened. Insurance Companies When purchasing insurance, make sure you buy it over the internet. Most insurance companies offer discounts for those who purchase their coverage over the internet rather than in person or over the phone. Some offer discounts between 5-15%. It may not seem like a lot at first, but it adds up over time. Insurance Policy Repeat after me: you must always read the fine print when signing an insurance policy. In an insurance transaction, you typically will have to sign a large number of papers containing thousands of words in tiny print. You need to read - and understand - these forms before you sign any insurance policy. Do not allow the agent to blow through the forms and simply sign at the several places marked with an X. If you don't understand the fine print, you will likely regret your purchase decision down the line. Motorcycle Insurance Save money on insurance by purchasing bundled policies. For example, you may be able to insure both a car and motorcycle for a discounted fixed rate. You will be able to find bundles that cover your vehicles and your home. Before you buy anything, though, be sure that you actually need it. Vehicle Insurance If you don't have health insurance coverage, you may want to add medical coverage to your vehicle insurance policy. Auto accidents are often a major cause of catastrophic medical bills and the medical coverage will cover everyone in the car, regardless of who the driver at fault it. This can protect your assets from being party to a lawsuit and can save you a lot of bills in the even an accident occurs. Insurance coverage can be a minefield of unfamiliar terms, fine print, discounts, coverage levels and so on. There's no way we can cover everything you need to know here but hopefully this has been a good starter to get you on your way. Research your particular needs and make sure that you stay covered!

This is good news for the increasing throngs who have been displaced from “secure” employment. The fact that there is hope and precedence for new beginnings is empowering.

I identify totally with the Mom & Pop operators and small business owners who have escaped the employment trap but have not been able to achieve financial independence after years of tireless work.

What does Rich Dad, Poor Dad have to offer to them?

We have changed bosses not our status

A powerful realization is that for many small business owners, the term “self-employed” is really descriptive of our true status. We are still “employed”. We have only changed bosses. In fact, I bet that like me you have actually taken on a far more demanding boss. We have become slaves to the business.

The Rich Dad, Poor Dad philosophy is that we should identify investments that do not consume a lot of our time. If the operations need to be managed then hire talented people to drive the process.

If you reflect on any time that you have spent being employed to others you can immediately see many benefits from having someone steering your ship while you provide the direction and monitor progress.

The spin-off benefits go beyond providing the business with objective and professional management. It also frees you up to develop your financial intelligence and to identify and manage other investment opportunities.

If you make the point that the business cannot afford to pay for professional management then you will be guilty of breaking two of Rich Dad, Poor Dad’s fundamental principles.

See also  Sleep Easier With The Proper Life Insurance Protection

Delete: I can’t afford it

The first one is to delete the term “I can’t afford it” from your vocabulary. Replace it with the Rich Dad question “How can I afford this?”

If I may insert an empowering thought outside of the Rich Dad, Poor Dad content, it is the value of the concept of Afformations – the power that comes from asking “Why questions”.

So, “Why am I able to engage professional management and grow my investments?” replaces “I can’t afford to pay a manager.”

The sub-conscious mind actually determines our future. Our minds are designed to find answers. So by asking empowering questions we put our minds to work to find the answers. Start asking your sub-conscious to find answers for outcomes that you desire and watch for a transformation in those areas of your life.

Pay yourself first

The other reason why many small business owners become slaves to their operations is because they are subsidizing the business with their free labour. Self-imposed slavery!

Rich Dad, Poor Dad pointedly insists that to make the shift to financial independence we have to pay ourselves first. In fact, the more scary the owners of your debt or liabilities are the greater the benefit of paying yourself first.

The reason is simple. If you face terrible consequences for not paying up on time, you are going to be forced to find creative ways to make that happen. However, you are not going to be scared of yourself so if you can’t ante up when it is your turn to collect you will just let it slide.

See also  Understanding The "Ins And Outs" Of Home Owners Insurance

Paying self goes beyond just a salary. It means investing in assets – income generating resources. To move to financial independence, we must add and sustain income generating resources BEFORE taking care of liabilities.

The logic is clear for anyone who has been caught up in the throes of running a marginal small business. There is a recurrence of the cycle of funds coming in and immediately going out to clear pending expenses and debt. There is nothing left to fund growth activities or to even think of diversifying the investment portfolio.

The lack of investment in growth leads to stagnation and a deepening of the vicious cycle. It is clear that one way to break free is to develop nerves of steel and heightened creativity. Take those into the decision to consistently make payments that are income generating before settling liabilities.

Take care not to neglect the need for additional creativity. The objective is not to build up a poor credit rating. The goal is to settle all bills on time. This approach just means that having taken care of the income generating activities off the top, you now have to find some way to get enough to take care of the wolves that are camping at your door.

I will share further insights in the next installment. This will include how to build up the Assets column when the business is being strangled by liabilities. I am really keen to get your feedback and to engage you in discussion – either in this forum or by direct contact with me at: [email protected]