- For most people, their profession is their income and they live through their work to survive. For rich people, assets they maintain, invest is their income.
- If I want to buy something, I must first generate enough cash flow from my assets to cover these expenses. Buy luxuries last, not first.
- Excess cash flow generated by my assets should be invested again into other assets.
- Do not simply aim for more income, aim for more valuable assets, repeat the circle.
- Reduce your expenses low and reduce your liabilities.
- Create a corporation to protect your assets and reduce tax expenses. An employee earns, gets taxed, and then spends what is left.
- Know a little about a lot. Learn something about accounting, investing, markets, the law, sales, marketing, leadership, writing, speaking, and communication. Now little about everything you can. Also See Bill Gates talking about the same point.
- Work to learn, don’t work to earn. Find a job where you can learn one or more of the above mentioned skills. Alibaba’s Jack Ma also empahsized on this particular point here.
- Do not simply buy investments. first learn how to invest as no one else can do it better than you.
- You become what you study, so choose your study materials carefully and do read a lot.
- Every rich person has lost money at some point, but many poor people have never lost a dime. Playing not to lose money means you will never make money. “Winning means being unafraid to lose.“
- Failure inspires winners and defeats losers. Do not be afraid of losing and be bold enough to admit and learn from the failure. No one is born perfect.
- Be in control over your emotions. Do not let fear or opinions of the general public dictate your actions.
- Most sellers ask too much. It is rare that the asking price is lower than something is worth.
- Surround yourself with winners. Sit with people who are smarter than you and you can learn from them,
- Saying “I can’t afford it” shuts down your brain. Asking “How can I afford it?” opens up your brain.
- Pay yourself first. Each month, first invest a certain amount of money into income generating assets before you pay your bills. Short of money, use this pressure to keep yourself on your toes.
- Dream big, have a clear game plan in your mind. Always seek answers to important questions such as Why do you want to earn more passive income? For me, because I do not want to work all my life. I want to have control over how I decide to spend my time. Also, I want to support my parents financially because they helped me all my life.
- Develop a skill to listen. Listening is more important than talking. Do not constantly argue and think with your mouth. Ask questions, grab as much knowledge as you can from others.
- On the market: do not follow the crowd, and do not try to time the market. Profits are made when you buy, not when you sell.
Lessons from Rich Dad, Poor Dad Book
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