Quotes

Rich Dad Poor Dad

"My educated dad's personal financial statement best demonstrates the life of someone in the rat race. His expenses seem to always keep up with his income, never allowing him to invest in assets. As a result, his liabilities, such as his mortgage and credit card debts are larger than his assets. The following picture is worth a thousand words:
Educated Dad's Financial Statement
Income=Expense
Asset < Liability
My rich dad's personal financial statement, on the other hand, reflects the results of a life dedicated to investing and minimizing liabilities:
Rich Dad's Financial Statement
Income > Expense
Asset > Liability
A review of my rich dad's financial statement is why the rich get richer. The asset column generates more than enough income to cover expenses, with the balance reinvested into the asset column. The asset column continues to grow and, therefore, the income it produces grows with it.
The result being: The rich get richer!
Why the Rich Get Richer
Income -> Assets -> More Income Expenses are low, Liabilities are low."

"As I said at the start of this section, the most important rule is to know the difference between an asset and a liability. Once you understand the difference, concentrate your efforts on only buying income-generating assets. That's the best way to get started on a path to becoming rich. Keep doing that, and your asset column will grow. Focus on keeping liabilities and expenses down. This will make more money available to continue pouring into the asset column. Soon, the asset base will be so deep that you can afford to look at more speculative investments. Investments that may have returns of 100 percent to infinity. Investments that for $5,000 are soon turned into $1 million or more. Investments that the middle class calls “too risky.” The investment is not risky. It's the lack of simple financial intelligence, beginning with financial literacy, that causes the individual to be “too risky,”

"So I am not yet rich, but I am wealthy. I now have income generated from assets each month that fully cover my monthly expenses. If I want to increase my expenses, I first must increase my cash flow from assets to maintain this level of wealth. Take notice that it is at this point that I no longer am dependent on my wages. I have focused on and been successful in building an asset column that has made me financially independent. If I quit my job today, I would be able to cover my monthly expenses with the cash flow from my assets."

"
For most people, just as the last child leaves home, the parents realize they have not adequately prepared for retirement and they begin to scramble to put some money away. Then, their own parents become ill and they find themselves with new responsibilities."

"So what kind of assets am I suggesting that you or your children acquire? In my world, real assets fall into several different categories:
1. Businesses that do not require my presence. I own them, but they are managed or run by other people. If I have to work there, it's not a business. It becomes my job.
?. Stocks.
?. Bonds.
?. Mutual funds.
?. Income-generating real estate.
?. Notes (lOUs).
?. Royalties from intellectual property such as music, scripts, patents.
?. 8. And anything else that has value, produces income or appreciates and has a ready market."

"My highly educated dad always encouraged me to seek a good job with a strong corporation. He spoke of the virtues of “working your way up the corporate ladder.” He didn't understand that, by relying solely on a paycheck from a corporate employer, I would be a docile cow ready for milking.
When I told my rich dad of my father's advice, he only chuckled. “Why not own the ladder?” was all he said."

"Yet, as a teacher, I recognized that it was excessive fear and self-doubt that were the greatest detractors of personal genius. It broke my heart to see students know the answers, yet lack the courage to act on the answer. Often in the real world, it's not the smart that get ahead but the bold." Knowing that you must be bold is a kind of intelligence.

Overcoming Obstacles
Once people have studied and become financially literate, they may still face roadblocks to becoming financially independent. There are five main reasons why financially literate people may still not develop abundant asset columns. Asset columns that could produce large sums of cash flow. Asset columns that could free them to live the life they dream of, instead of working full time just to pay bills. The five reasons are:

1. Fear
2.cynicism
3.laziness
4.bad habits
5.arrogance

"Only a person's doubts keep them poor. "

"Cynics criticize, and winners analyze."

"Real estate is a powerful investment tool for anyone seeking financial independence or freedom. It is a unique investment tool. Yet, every time I mention real estate as a vehicle, I often hear, “I don't want to fix toilets.”
That's what Peter Lynch calls “noise.” That's what my rich dad would say is the cynic talking. Someone who criticizes and does not
analyze. Someone who lets their doubts and fears close their mind instead of open their eyes.[...] I talk about freedom from the rat race, and they focus on toilets. That is the thought pattern that keeps most people poor. They criticize instead of analyze."

"Nobody has to tell them. Deep down they know. In fact, if you remind them, they often respond with anger or irritation.
If they aren't busy at work or with the kids, they're often busy watching TV, fishing, playing golf or shopping. Yet, deep down they know they are avoiding something important. That's the most common form of laziness. Laziness by staying busy."

"I don't want to work all my life. I don't want what my parents aspired for, which was job security and a house in the suburbs. I don't like being an employee. I hated that my dad always missed my football games because he was so busy working on his career. I hated it when my dad worked hard all his life and the government took most of what he worked for at his death. He could not even pass on what he worked so hard for when he died. The rich don't do that. They work hard and pass it on to their children.
Now the wants. I want to be free to travel the world and live in the lifestyle I love. I want to be young when I do this. I want to simply be free. I want control over my time and my life. I want money to work for me."

"There are so many “intelligent” people who argue or defend when a new idea clashes with the way they think. In this case, their so-called “intelligence” combined with “arrogance” equals “ignorance”. Each of us knows people who are highly educated, or believe they are smart, but their balance sheet paints a different picture. A truly intelligent person welcomes new ideas, for new ideas can add to the synergy of other accumulated ideas. Listening is more important than talking. If that was not true, God would not have given us two ears and only one mouth. Too many people think with their mouth instead of listening to absorb new ideas and possibilities. They argue instead of asking questions."

"If you cannot get control of yourself, do not try to get rich."

"Remember, the easy road often becomes hard, and the hard road often becomes easy."