’’Show me the money, ” bellowed Tom Cruise in Jerry Maguire- a movie that showed how money could make any of us, do the most insane things. It’s so strange that even though money holds so much importance in our lives, we have never been adequately trained on finance management. Robert T Kiyosaki is the acclaimed author of the best seller-Rich Dad, Poor Dad -a book that tries to give us a start on getting financially literate. The basic thing stressed over and over in the book is to learn to make money work for you rather than slogging away your lives working for money.
Rich dad and poor dad refer to the two people in the author’s life who gave him diverse opinions on making and spending money. The author has referred to his father as the poor dad and his friend’s moneywise father as his rich dad. While his own father wanted him to play safe and be smug in a white-collar job, his other ’father’/ mentor guided him to make money work for him.
The rich dad-his friend’s father taught the author to take risks, make wise investments and retire early. His rich dad was the one who made him understand that taking risks in life was essential for success. At the same time he also made him realize that being an entrepreneur would involve losses and calculated risks was the next lesson he learnt in avoiding huge losses.
The author has made huge profits in the real estate business and he explains the way he made those profits along with tips on making good gains in whatever investments we make in our life. Some of the points he does touch upon are like making sure that you spend more on re-income generating assets than on liabilities.
Rich dad, poor dad should be made compulsory reading at the teenage level. Only then will youngsters understand so many basic things about making and saving money. The book discusses how too much attention is paid to various sundry things at school except finance and how we are unconsciously prepared for a life of work, basically for somebody else.
To compound matters further, when we graduate from college, no body bothers to save much because of financial illiteracy. As time goes by, bad money-decisions and lack of the knowledge of investment options, makes people cringe from taking risks and they become further bound to working for money, rather than enjoying its benefits.
The book divides understanding the concepts of money into easy bites of advice. A very important question that you can learn from the book is whenever you want to buy something very expensive, instead of saying “Can I afford that?” it’s better to ask yourselves, “How can I afford that?” Doing that forces your brain to give you some creative answers to your query and your mind churns out innovative ideas to help you out.
Another very non-conformist tip discussed in the book is that the author does not suggest investing in property, which goes against the normal convention. People usually buy property as it is the safest investment but the author explains to us how this investment can tie us down and not allow us to make optimum use of our extra money.
The book enumerates further on the various mutual funds, stocks, bonds, all of which offer a plethora of options for the investor, which are not taken advantage of. Also he stresses a lot on small regular savings that could really make a difference a good ten years down the line.
Rich dad, Poor Dad has also had its share of detractors about the theories propounded in the book. But the essential thing to remember is that there are no shortcuts to getting rich in life. Getting money savvy before you even start to earn is the best learning you can carry from the book. If we can just inculcate some, if not all the strategies from the book, we might just gain a new perspective to increasing our moolah!