Tahmi Reads | Rich Dad Poor Dad - Lessons Learnt

This is the first self improvement book that I have read in a very long time, and it was definitely quite the education. If you are looking to gain a better understanding with regards to "how to become rich" without it being such a cliché topic, then this book most certainly makes you think about your own circumstances. Some of it can be quite heavy when he talks about the economics side of things, so you might have to re-read these parts, but the book generally is very easy to understand.

I decided to make notes on my trusted Google Keep (more about this in this post here) as I was reading - this is something that I have found to be very valuable as it helps me remember the key points, plus it is always a great way to refer back to it when using it as a point of discussion, including me writing this post. :)

Author, Robert Kiyosaki gives his perspective on how to achieve financial freedom which is shaped through your understanding of money, assets and wealth, otherwise known as your financial literacy, or your financial intelligence. He shares this through a story telling technique by talking us through his childhood experiences and comparing between the lives of his own dad (poor dad) and his friend's dad (rich dad).

The key points that I learned in the book are summarised below:

1. Biggest rule of thumb: always ensure your income is greater than your expense, and your assets are greater than your liabilities. Makes it easier to understand if drawn out below:

Income > Expense

Asset > Liability

*Income - money you earn

*Expense - money you spend

*Asset - an item/property that provides financial value (house, car, own business product)

*Liability - what you owe to others

If you follow this then you will always be a step closer to financial freedom.

2. Focus on the skills of selling and understanding the business systems in order to grow yourself and your business. Too many people become "talented poor people" as they focus on the skills of that specific industry (ie. making a hamburger) rather than the skills of selling (selling and delivering the hamburger). I thought this was really interesting as it makes you think about how you can still be a specialist in your field without actually being a specialist. This one is highly useful for those who want to grow their business without being a qualified expert in that field. For example, I have no specific qualifications in business or teaching, but this is something that I am learning and expanding my knowledge on as I work on my own side hustle. The plan is to become an expert without being a qualified expert as I hope to launch a lot of things in the future for the side hustle (sssshh, gotta keep it a secret for now).

3. Pay yourself first - the story that was told alongside this was super interesting. I'm not sure how much I agree with it but it is definitely one to make you think about how you see money. Robert's idea relates to the power of self discipline. By paying yourself first, whatever money you have left over may not necessarily be enough to survive or live comfortably. So instead of paying your bills first and worrying about how little you have left for the month, pay yourself first and then if you fall short, use that pressure to inspire you to find new ways of generating income for yourself. Let that fear of not being able to survive/live comfortably direct you to change, instead of dipping into your savings. This is something that really made me think about my own spending habits. I am actually very good with my money and have a set budget for the month which I usually stay within. But sometimes there are months where I might spend more so what I do is I go into my savings and transfer the funds across. According to Robert Kiyosaki, do not do this! Instead I should find ways to earn that extra bit of cash that I need (car boot sale, selling my products/services via Facebook, tutoring etc). Use that fear and pressure of not being financially independent as a source of motivation. Let me know below in the comments what you think about this!

4. Make money work for you instead you working for money - train your mind to think of how you can create money to live the life that you want instead of borrowing money to make a payment for something. I understand that this is easier said than done, but it is also important to know that changing your focus and your mindset is key to achieving actionable results.

5. Your attitude towards risk, reward and failure is crucial - a lot of people are too scared to try something at the risk of failing. The problem with that is that you have already cut yourself off from any possible progress, achievement or reward without even trying anything. How do you know if you never try? What is the worst thing that could happen? Ask yourself these questions when you feel hesitant towards taking on a new opportunity.

6. Mindset is everything - training your brain to think a certain type of way is crucial. The example that Robert gives in his book makes you think - instead of making his children say "I can't afford it", he made them ask themselves the questions "how can I afford it?". This immediately opens up a whole other door of opportunities and possibilities. Play to win, don't play just to not lose. Re-read that and let it sink in.

7. 3 most important management skills required to start your own business are:

* management of cash flow - making sure your assets > liabilities (as mentioned in point 1)

* management of people - successfully being able to manage employees, volunteers etc.

* management of personal time - balancing out work life with personal time

So this may be a lot of take in, but these key lessons are definitely pointers that have stuck with me. Since reading the book, I have tried to implement these things into my life, slowly but surely. Once you are aware, only then can you act on it and start consciously making decisions with regard to your behaviour and actions.

Have you read this book? What are thoughts on it? Or was there anything else that you leanred from the book? For those of you who haven't read the book, what is the most important lesson from the above that you are going to take away? I would love to hear your answers below!

If you like the Tahmi Reads section of the website, let me know so I can post more of these as I have read more books since.