How to be Rich?
Our schools, colleges do not teach us how to become Rich. The communication about earning money is being very typical at home, in our friend circle. So when you follow the same principles about money, which is followed by your parents then how you are expecting that your financial position would be different than your parents? Changes in your principles about money will change this situation.
Well-known author “Robert Kiyosaki” always says that “The poor and middle class work hard for their money. The Rich have their money work hard for them “
Lack of money is a cause of all problems in the world. Your approach became negative about the things when you are suffering from financial problems. While surrounded by the problem your brain stops thinking on that problem and automatically problem becomes more critical. But when you start to look, a new opportunity in every problem you will get away to come out of that and start to attract money towards you..
Normally listen while people are talking “these things are not really affordable for me” This shows the typical poor or the middle-class approach. Rich people don’t think like this, they think about how it will be affordable for them? What they should do to afford these things. Exactly opposite view and as middle-class people say this is not affordable their brain stops working on that, at the same time rich people start searching new opportunity for same.
Most of the time people are not ready to take any money related to risk because of they afraid to take any risk. So they enjoy living their routine life to grow up with typical education, search job and do the job till you get retired. Rich people are having teachings from their home to take the risk, don’t afraid to face it and sort the problem if comes and achieve success.
Rich people always prefer financial literacy instead of academic literacy in life.
Any one who is growing up middle class knows that his life will go balancing income and expenses. After a certain period slowly people realize that their dreams are broking and they are going away from their dreams. It’s only because people did not give importance to financial literacy and various wrong things are hammered in the mind from childhood.
People don’t think why they are going away from their dreams or in some cases, they fulfil their dreams with the help of borrowing loans .EMI occupies their life and they lost happiness of life and their life becomes like a rat race. After a certain period, people get habitual and they accept various loans. It becomes a cycle to clear off one loan by borrowing another loan. Lifestyle expenses add more in all these things.
Normally people get misunderstood and think emotionally about things and plus their liabilities. If we notice we will found the income and liabilities are the same in the middle class and poor people’s life
Now people start thinking about how they will earn more but they don’t understand whatever they earn more they will lose because of this lifestyle. They don’t understand the difference between their asset and their liabilities till the end .
Rich people did not get trapped in this rat race because their concepts of assets and liabilities are very clear and they know very well of their assets. Their assets and liabilities are not the same. They always keep more share of assets than liabilities. They focus on increasing their assets and investments. Always they think that they will add something in their pocket. They always control their liabilities and expenses. When rich people think to increase their expenses or liabilities first they increase their assets and cash flow in the pocket. They always keep the ratio of assets will be more than liabilities and expenses. In this way, they add more assets in their portfolio and get more n richer.
Keep Doing your work.
In our society poor and middle-class people gave preferences to educate the academic courses for their children and hammer them that good academic career will give them a good job and their life will be settled. They are not seriously aware of financial literacy.
Rich people explain to their children that financial literacy is also important with your academic career. They teach children how to increase their assets. If in case you are doing a job you should start some work only for you to increase assets. When you are doing a job that means you are doing work for your company or for your boss. Most people make a mistake in understanding the concept of their profession and their business.
When you need to be financial security person needs to focus their own business. Your business increases your assets and when you are doing a job you concentrate only on your income and thinks how it will grow in the whole life. But income will not give you financial security, only assets can give you financial security.
Here it’s important that people don’t understand the difference between assets and liabilities. Increasing income did not give you financial security when you face some problems like losing a job or any such kind of incidence.
At the age of retirement poor and middle-class people realize that They have not adequately prepared for retirement and they are not having much money to survive. Automatically their children have to takes their responsibility. Rich people always focus on increasing their assets so they did not face such kind of incidence.
Money gave his services to rich people and poor and middle-class people serves themselves for money. This is a big difference should be understood by poor and middle-class people.
When the cash flow increases people think to buy luxury for them. Poor and middle-class people by luxuries first when they are having cash flow in hand. These people give importance to be a virtual rich but in reality, they are carrying very much debt with them. Rich people always gave preference to increase their assets first and they buy luxuries when they are having income generated by these assets.
The concept of luxury is when you invest and develop the asset and this asset gives you some income is a real luxury.
History of Taxes
When we look back into our history we notice one thing very common in the world i.e. there were no taxes or if in case somewhere they were existing but they were very less.
But after some time taxes were increased and it creates a partition between two classes of the society. One class was of poor and middle-class people and another was of rich people. Government get the income source through this any government did not cancel their taxes. Poor people and Middle-class people always support the taxes because the Government was successful in hammering that taxation structure is created for Rich people in society. They share some part of the income in paying tax. And the government will use this money for people’s welfare.
But do you think it is really true?
Actually not….why? what happened exactly? When we saw in the history we found that taxation started to recover the expenses has been done for that state or country. And the government shows that they are collecting tax only from rich people. In the beginning, it was true, but when government observed that they are getting the money it’s fine but if they did not spend it every year they will unable to collect this money in coming future years because it’s mandatory for them to keep their expense very less. Every year they need to sanction a budget for each n everything. So the government did not curtail their expenses because they were feared of less funding. The effect of this strategy is nowadays middle-class people pay more tax to the government. Every government shows various expenses for these expenses now they need funds more n more so they forced middle-class people to pay taxes.
On the other hand rich people adopt a new different strategy to save their tax. They appoint Lawyer, Accountant, Tax excerpt to work on reducing their tax. They also started new corporations and companies to get all the benefits and get redemption in tax. Even sometimes they pressured government also with their power.
But middle class and poor people don’t have this power of money so they pay taxes every year.
Rich people started new corporations or new companies to save their tax and indirectly their money works for them.
Another the thing we can observe that people who work for themselves i.e.do the business become rich more than the people who do the job. The reason is salaried people pay tax honestly to the government, they don’t think about saving their tax money, their mindset is fixed that earns money, pay the tax and spend money.
Rich people earned money, they spend money and then they pay their tax.
Rich invent Money!
Most of the time we observe that people don’t know that academic education is not sufficient to start work in reality. Practically when we start working we understand that daring, tenacity, brilliance braveness these are somethings we need in reality.
In every person there is a hidden dual personalities. We will be brilliant and brave at the same time we are having fear and lack of confidence.
Confidence is trust in someone or something. The confident person believes in himself and his abilities. Confidence is not a gift of God.
It has to be cultivated with self-efforts and diligence. Only a person of confidence can convert challenges into an opportunity.
Middle class and poor People are afraid to accept the challenges because they doubt on their own capacity and they prefer not to take any risk.
Rich people put belief in themselves, it will boost up their success ratio. We see that sometimes intelligence doesn’t work if you don’t have daring in yourself. People afraid to take the risk and this thing put rich people in a different position because they don’t afraid to take the risk.
If we need more options of earning we have to develop the capacity of taking the risk , develop our financial IQ, financial literacy.
Rich people don’t lose any opportunity because they had prepared their mindset for taking risk.
And if the opportunities are not coming towards you then there is a need to develop financial intelligence.
If you don’t want to do hard work till you get the golden opportunity you will waste big time. And if you think you should be lucky to earn money you must be aware of financial intelligence.
God has gifted us our mind and mind is the most powerful thing in this world. If you trained your mind properly you can create a lot of wealth. At the same time, the financial illiterate mind creates poverty for themselves and for their coming generations also.
Rich people invent money with the help of financial intelligence.
We cancel opportunity easily we have to find out them and encase them if we want to be rich. And financial intelligence helps us to grab that opportunity.
Rich people face the risk so they grab the opportunity and become more n more rich!!
Learn for WORK, not for MONEY
Some times we saw that person having extraordinary talent doesn’t get success and an ordinary man unexpectedly taste success.
What is behind this? Have you thought about it ever?
Because of marketing skill. Every person should be a combination of financial intelligence and marketing skills.
People develop their mindset that once they have completed their education till the master’s degree, they don’t need to learn. Actually, this is a very wrong attitude. Every person should be a learner till his end of life.
When you will change your attitude towards learning you will found many more opportunities around you. Seeing an opportunity and at the perfect timing grabbing it is a skill. You should develop this skill.
Middle class people teach their children to be specialist in their choose profession and rich people suggest their child that he or she should know at least primary stage of all type of work because they prefer working for learning not for earning because they know that their earned money works for them they don’t need to work for money.
Middle class people do the hard work to get a job continue so they can’t learn any more except their routine work. Automatically it results in their progress.
Rich people focus to develop their marketing skills and communication skills. These two skills are the keys to a successful life.
There is the universal rule of money i.e. when you will give the money you will receive the money. Rich follows this principle by doing various charity. Middle-class people always think If I will be having money then I will do some charity so they always wait for fir the situation in life that money will come to them.
There is an important law of money “Give, you shall receive”
Rich people always follow this rule and becomes more n more rich.
If achieving goals were easy everyone would do it quickly and without difficulty. Even if your vision is clear there are always obstacles in the path.
What is that obstacle? Fear, Not to be focused, not listening what is your mind saying you, priorities, grab the opportunity, these are some obstacles.
We will lose money this is the main fear that we see very common all over the world. Nobody wants to lose his money. How you take the risk of anything and overcome this fear is more important.
People afraid to accept the challenges because they doubt on their own capacity. But rich people believe in themselves. Believing in yourself is confidence . The confident person believes in himself and his abilities. Confidence is not a gift of God. It has to be cultivated with self-efforts and diligence. Rich people cultivate themselves with confidence. And confidence gives us the “can do” approach. Can-do approach creates a very positive note in you about your ability, your confidence, your self-belief and your success. Automatically rich people overcome the fear challenge.
Staying focused and motivated is one of the hardest things when you are setting your goals. Positive thinking and positive approach keep you motivated. Train your mind to look only positive things in surrounding of yourselves. It helps to see the possibilities in every situation. Positive affirmations implant positive thoughts in you. Make an unbreakable commitment to yourself to achieving the desire goals.
There is huge power in your mind. Everything is possible when your mind accepts the thing. Many times we see in the society parents always told their children’s that these things are not affordable for them so don’t dream about that. That is not our cup of tea and so many things. When you are saying this type of sentences that means you are thinking in that direction and we get the result how we think about something. So when you will set your mindset that everything is affordable to be the result will be according to that.
Another thing that normally common people make the mistake is priorities. Common people don’t think about themselves. They give their outstanding and get upset nothing remains in their hand. It’s good to clear your outstanding but when you think first about yourself and then other expenses then there is a lot of chances that you can think on other income source or you will think that how your income will grow? Rich people always think in this way so their priorities are different from the common man.
Rich people believe in learning and donation. If you desire something you have to give it to the people first then it will be back to you in multiple forms. When you will fulfil this principal with a needy person you will definitely result in back with multiple formats. Knowledge and Money increase when you gave it to others.
These are my learnings from the book “Rich Dad, Poor Dad” written by Robert Kiyosaki
You can also read the rich dad blog to understand more about personal finance .
For summery points and quotes form the book click here.