Monday, November 26, 2007

Rich dad Poor dad

Author: Robert T.Kiyosaki

Robert T.Kiyosaki's classic book Rich dad poor dad is quite popular among people who know something about passive money.The book is not a quick fix to get rich, but rather a way to accumulate your hard earned money in a systematic way.It is about thinking like rich man!

The author, in his own conversational manner elaborates why poor remains poor and rich get richer. He reasons that rich generates money from his assets while the poor is happy to earn money from his paycheck. Earning money from paycheck in turn means that you are paying your government first i.e income tax. While a rich man can pay himself first before paying the government, How does he do that?By making corporations.

Further a poor man latches on to any offer which says " Low down, easy payment, monthly installments etc.." and happily takes a loan from his bank at a high interest rate ( generally around 10%) but what is the interest one is paid for saving money in the bank ? a mere 3-4%. The poor man ends up paying a high interest rate and ends up in a financial ditch. The poor man considers his house as his biggest asset, unless one lives in a house which is partly rented , a house cannot be an asset, explains the author. In the end, a Poor man earns money for the government, the bank,and finally a small amount to himself which wouldn't even suffice his living expenses.

Robert T.Kiyosaki further explains why getting more money wouldn't solve money problems for a financially illiterate person, in fact according to him more money would mean more debt problems for such a person. You can learn more about this in the book, a lot of pages are dedicated to this particular topic.

Rich dad poor dad expounds on the importance of investments, especially in the stock market and real estate. How holding on to a secure job can be dangerous to you in the long run, and how a long-term investment strategy and focusing on your investment would do good to you in the long run.

There are answers to some of the frequently discussed topic such as " Take money from the rich and give it to the poor, Let there be equality", the Robin Hood way, the reasons given by Robert sounds fresh and in fact brings about change in attitude towards many of the money misconceptions.

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