If there is anything that can help me and other people in their mid-20’s, that is to read self help books on leadership, productivity and life. How do you become financially successful? That is the first question.
We aim to become financially confident not because we want to be materialistic (maybe some but that is NOT my case) but because we want to secure the future. Admit it or not, money talks is one of the few things we want to be figured out and as much as happiness and satisfaction are important, money is too for security. Why? Because in this world, most of the things we need are paid for.
So I became an enthusiast for financial literacy and independence because I want to take care of myself and my family (again, some things we need come with price tags).One of the books recommended to me was Robert Kiyosaki’s Rich Dad, Poor Dad. Here are the 5 things I learned from the best selling book, Rich Dad, Poor Dad.
1. If you want to improve financially understand how money works
The common notion we have is when we get money, we have to spend it. And we have to spend it to accumulate material things: gadgets or clothes. Yes these are necessary but we have to know that sometimes we don’t always need to invest on things without monetary returns because we have to choose the option that will make money work for us.
Rich Dad, Poor Dad is appropriately written that it was able to explain financial concepts in a simple manner. What we do not know is there are several things you can purchase that can bring you more money eventually. We should stop investing on things that depreciate in value like the latest gadgets available. And you don’t have to earn more or double for you to invest. What you need is the ability to determine which is important to spend money on and identify assets from liabilities. This way, you can introduce yourself to different ways to make your money circulate and generate additional income for you. In short, we work for money until our retirement but we can actually make money work for us until after we retire!
2. We need additional income
When we have a job, we tend to relax and be content with what it gives us. However, we need to understand that any type of industry or business is not consistent. Stocks and the economy goes up then down and the cycle goes on. And in case we experience economic low we don’t want to be affected by the lay offs. When that happens we lose our income, we lose our source of living. Rich Dad, Poor Dad taught me that having additional income serves as our safety net.
Sometimes how much we earn is just enough to support our monthly needs but what happens when emergency strikes? We borrow money that means we give ourselves additional monetary responsibilities. Sometimes extra means less. Extra liability, less money to spend for actual needs. That is difficult! We cannot say that we can push ourselves to be healthy all the time and we cannot be sure that our needs will stay the same for as long.
We are also not ensured that we will be having jobs a couple of years from today so having additional income will give you savings and just what you need when your main source fails. Wanting savings isn’t being selfish or unreasonable, it just means that you know how to prepare for the future. It is just being practical.
3. Do not cut on your needs to have enough money
Simple: Rich Dad, Poor Dad’s best advice: you don’t have to deprive yourself to live within your means. Increase income to address your financial obligations and to provide healthier options for yourself. Because when you don’t have enough money you opt for cheaper options that have less nutritional or aesthetic value that can cost you more eventually.
4. Investing and saving are not just for the rich
We think that investments are always worth millions therefore we think that it is not for everyone. The thing is we are totally wrong! There are investments that are cheap and affordable. When you read the book, Rich Dad, Poor Dad will introduce you to stocks, bonds and saving. But you do not need highly technical knowledge regarding those concepts to understand what Rich Dad, Poor Dad wants to teach you.
Basically it is this: there are businesses that look for investors who can give funds for as low as $50. Of course, this will not generate millions at once but at least you are getting monetary returns already. $4 dollars worth of return of investment a month is already good than nothing. Why do you have to invest? Because you need extra income.
5. Never be a slave for money
As much as money is important to push through with our transactions, it is still important to spend more time with the people who matter: your friends, family and yourself.
Most of us work the whole day until our retirement but we end up without savings or we usually compromise our health to earn more. In the end the kids have grown and wouldn’t want to “play” with you anymore, you are older and never had the chance to be at the beach with your friends or tons of photos have been posted online without you in them because you are too busy working. There is nothing wrong with being a workaholic but give credit to whom it is due.
Have fun. Work eight hours a day and enjoy your breaks and weekends and holidays. It is such a waste of time and effort to spend the money you worked hard for in your sick bed and to realize that your relationships never get deeper.
What Rich Dad, Poor Dad taught me is that success is achievable but success cannot always be measured in terms of money. But if you want to be better and more financially responsible, know that you need to have discipline to know which you need and which can be let go.