January Read/Ruby

Title: Rich Dad's Rich Kid Smart Kid

Author: Kiyosaki, Robert T.

Call Number: 332.024 K62R 2012

Subjects: Finance, Personal; Investments

ISBN: 9781612680606

Number of Pages: 277

Ruby' Read: 

    The author, Robert T Kiyosaki, had two father figures in his life. The man he calls rich dad was his best friend Mike's dad. The man he calls poor dad was his real dad. His poor dad was an academic genius and educator but his rich dad was financial genius and also a great teacher. His smart but poor dad was the head of the educational system of Hawaii, but always struggles financially all his life. His rich dad was without good education but built his own business and earned a lot of money.

    Robert wrote the book is not telling us education isn't important, he is not suggesting that we take our child out of school, the problem is that school doesn't teach financial skills, many kids leave school without a winning financial formula. He is talking about how to mold a child's perceptions on money. The most important a parent can do when it comes to money, he wants parents to give their children the perception that the child has power over money, rather than the child is a slave to money.

    Robert's rich dad forbade his son and Robert form saying, " I can't afford it." to help them change their perceptions of themselves. He had them say instead, " How can I afford it?" If you examine these two statements, you will see that the question, " How can I afford it?" opens  your mind to examining the possibilities of accumulating wealth. The statement, " I can't afford it." on the other hand, closes your mind to any possibility of attaining what you desire.

    Robert's rich dad taught him three steps to learning about money:

Step 1: Simple drawings 

Income Statement                                                   Balance Sheet

Income	Expenses	Assets	Liabilities

                 

Step 2: play

Step 3: Real life

    But Robert recommends that most parents start at step two. Sometimes he might not talk about step one until he was certain tha child was interested or ready to learn such concepts. He used to recommend beginning with the game of Monopoly, many of his friends who are investors or entrepreneurs tell him that they also played Monopoly by he hour, fascinated by it. Without that fascination, he would not force the subject of money or investing, much less financial statements, on young people.

    Robert's two dads believed that all kids are born rich and smart. Intelligence is the ability to make finer distinctions. Words allow your mind to make those finer distinctions and what your eyes cannot. for example, there is a world of difference between an asset and a liability, but most people are not aware of the differences. Simply knowing that difference can greatly influence the financial outcome of a person's life. There are three different types of income: ordinary, passive and portfolio, they all fall under the umbrella of the word income, but there is a tremendous difference between each of three incomes. When you tell your child, " Go to school, get good grades, and get a job," you are advising your child to work for ordinary income. One big problem with ordinary income is that is the highest taxed of the three incomes, and it also gives you the least control over taxes.

    This a a book from the different views about money, and there are a lot of interesting opinions and examples. Many people are in financial trouble simply because they are using words they don't understand. There are some sentences that Robert's rich dad told them:

"Assets put money in your pocket, and liabilities take money out of your pocket." " If you stop working, assets will feed you, and liabilities will eat you." In simple words but you can totally understand the differences between asset and liability.