Rich Dad Poor Dad was first published in 1997, and has racked up sales of 32 million copies in more than 51 languages. Endorsed by many celebrities, this book stayed on the New York Times best-sellers list for six years.
In the recent times the book has built a sort of a cult following and we decode a few rules that the book tells you to follow.
Understand that we all have the choice - to work for money or to have money work for us. Fear and greed lead us to the trap and thereby controls our emotions.
Rule 2: Understand the difference between an asset and a liability
Is your house an asset or a liability? Ans: Liability (until to repay the entire mortgage of 20-30 years)
The mantra to remember is that the rich buy assets, the poor have expenses, and the middle-class buys liabilities, thinking they are assets.
Rule 3: Mind your own business
Minding your business is about buying revenue generating assets - stocks, bonds, mutual funds, real estate (generating net positive income); instead of liabilities or vanity goods.
Rule 4: Financial Literacy Is Pertinent
Work towards building a financial IQ – understand the basics of accounting and how the financial markets work. Most importantly analyse how the science of making money and investing works.
Rule 5: The rich invent money
The real money is in training our mind to be financially intelligent, we will be willing to take risks and invest in opportunities that others do not see.
Rule 6: Get Over Your Biases
Despite of wanting to earn big money, all of us are victims of deep-rooted biases such as: fear of losing money, deep-rooted cynicism, laziness, fostering bad habits and worst of all arrogance. Learn how to tackle and get over them with time.