Notes: Rich Dad Poor Dad by Robert T. Kiyosaki

Rich Dad Poor Dad

Src: https://www.amazon.com/Rich-Dad-Poor-Teach-Middle/dp/1612680194

Must read book.

Chapter 1: The Rich Don't Work for Money  

Chapter 2: Why Teach Financial Literacy? 

Chapter 3:  Mind Your Own Business

Chapter 4:  The History of Taxes and the Power of Corporations.

Chapter 5:  The Rich Invent Money

Chapter 6:  Work to Learn - Don't Work for Money

Chapter 7:  Overcoming Obstacles

Chapter 8: Getting Started

Chapter 9: Still Want More? Here Are Some To Do's

Chapter 10: Final Thoughts 

Summary:

Chapter 1: The Rich Don't Work for Money  

• The poor and the middle class work for money. The rich have money work for them.
• When Rober fed up with a 10 cents per hour job and talked to Mike's dad, he said: "Life doesn't teach you with words, but by pushing you around.
• Life pushes all of us around. Some people give up and others fight. A few learn the lesson and move on. They welcome life pushing them around.
• He told Robert and Mike that they were the first people who had ever asked him to teach them how to make money. He had more than 150 employees.
• Robert was offered a raise from 10 cents per hour to 25 cents, 1$, 2$ and 5$ an hour. Solidified for Robert that he wouldn't be bought. Robert didn't react to his emotions and instead thought logically.
• School is important but for most people it's the end, not the beginning.
• The moment you see one opportunity, you'll see them for the rest of your life. The boys did and soon saw an opportunity in creating a library where kids could pay an admission fee and read as many comic books that otherwise would've been thrown away from the convenience store.
• Looking at the discarded comic books in a new, creative way led to a business opportunity.
• Despite having a high-paying job, people like Robert's poor dad struggled to make ends meet.
• Ques: 
• 1. How common is the approach to money taken by Robert's poor dad?
• 2. Robert's rich dad said true learning takes energy, passion, and a burning desire. What are the examples of when this has proven true in your life? What's one lesson you never forgot, and why?
• 3. Would the pay rate of 10 cents an hour - and then nothing an hour - have stirred in you the same reaction as Robert?
• 4. Is it fear that drives most people to work? Are there other factors at play?
• 5. Is the temptation strong to thing that more money will soother that fear? Why is that such a common reaction?
• 6. What's an example from your life when you reacted with your emotions? What's a time when you were able to observe your emotions instead and choose your thoughts?
• 7. Are the rich or the poor more susceptible to those. controlling emotions of fear and greed? Why do you think that is?
• 8. Do you think most people realize they are stuck in the Rat Race? Why or why not?

Chapter 2: Why Teach Financial Literacy? 

• It's not how much money you earn, it's how much money you keep.
• Story of the 1923 meeting of some of the greatest leaders and richest businessmen. 25 years later, most of their lives had ended tragically, with the men either broker, exiled or in prison. The 1929 stock crash and the Great Depression likely played a part in their fates, but today we live in a time of even more turmoil and change than they did. 
• Rule no 1, find the difference between assets and liabilities. Assets put money in your pocket, and liabilities take money out of your pocket. Numbers will tell the reality.
• Your home is not an asset, because it takes money out of your pocket. Not only taxes and expenses but because of its loss in value and the opportunities missed when all your money is tied up in your house. Make sure to first buy assets that will generate the cash flow to pay for the house.
• Most people have been educated differently by bankers, financial planner and others, so they must unlearn what they think they know.
• Fear of ostracism causes people to conform to, and not question, commonly-accepted opinions or popular trends, often to their financial detriment. 
• Ques:
• 1. When did your financial education begin? Was it with this book, or from another source?
• 2. How did you react when you first read Robert's definition of asset and liabilities? 
• 3. How did you react when he stated that a home is not an asset? Had you viewed yours as one? After he fully laid out his argument, did he change your mind?
• 4. Which cash-flow situation looks most like your life?
• 5. Other than your home, is there something that you thought was an asset that later revealed itself to be a liability?
• 6. Would you agree with this statement: "What is missing from most people's education is not how to make money, but how to manage money". Why or why not?
• 7. Rich dad told the boys that it's not the numbers that matter in accounting, but what the numbers are telling you. What story do the numbers in your life tell?
• 8. When was a time in your life that a seemingly positive accomplishment, such as a promotion or raise, didn't lead to the balance-sheet result you expected?
• 9.  How many days forward could you survive if you stopped working today? Does that number surprise or frighten you?

Chapter 3:  Mind Your Own Business

• The rich focus on their asset columns while everyone else focuses on their income statements.
• In 1974, the founder of McDonald's at the University of Texas asked "What business am I in?" He revealed he is not in the hamburger business and his real business is real estate.
• It's the secret 3 of the rich. Mind your own business. Financial struggle is often directly the result of people working all their lives for someone else. 
• Promotions or a better job will only help you become more financially secure if the additional money is used to purchase income-generating assets.
• The profession can be a banker, but they still need their own business.
• Your business revolves around your asset column, not your your income column.
• Robert was once turned down for a loan because he had too much investment real estate. Bank wanted to know why did he not have a normal job with a salary.
• Keep your daytime job, but start buying real assets, not liabilities or personal effects that have no real value once you get them home.
• Keep expenses low, reduce liabilities and diligently build a base of sold assets.
• Real assets fall under these categories:
• Business that do not require personal presence. If we work there, then it's not a business, it becomes a job.
• Stocks
• Bonds
• Income generating real estate
• IOCs
• Anything else that has value, products income or appreates, and has a ready market.
• Rich dad encouraged Robert to begin acquiring assets that he loved, "If you don't love it, you won't take care of it". He collects real estate simply because he loves building and land.
• Most people are afraid of small cap companies and call them risky, and they are. But the rest is diminished if you love what the investment is, understand it, and know the game. Roberts comes out of the small stocks in a year.
• I don't encourage to start a company unless they really want to.
• Once a dollar goes into your asset columns, it becomes your comployee. It works 24/7 for generations.
• Keep your day job, be a great hardworking employee, but keep building that asset column.
• When assets generate enough income to cover luxuries, that's when you can buy them.
• Ques:
• 1. What is your profession, and what is your business? How do they differ?
• 2. What are things you might have counted in your net worth before reading this chapter? How do you view them now?
• 3. Are the assets you're acquiring the type that you love? If not, how can you change that?
• 4. What is a time you bought a luxury that your cash flow couldn't justify? What is a time you did so when it could justify the purchase? Compare how you felt in the two situations, both at the moment of purchase and later.
• 5. Have there been people in your family who have spent their whole lives working for someone else, only to end up with nothing? What would you have advised them if you could?

Chapter 4:  The History of Taxes and the Poer of Corporations.

• My rich dad played the game smart, and he did it through corporations - the biggest secret of the rich.
• My rich dad did not see Robin hood as a hero, he called Robin Hood a crook. He believes the reason the middle class is so heavily taxed is because of the Robin Hood ideal.
• The reality is that rich are not taxed, it's the middle class.
• Taxes were initially levied against only the rich, in reality it wounded up punishing the very people who voted for it, the poor and middle class.
• A corporation is merely a file folder with some legal documents in it. It's not a big building or a factory or a group of people. A corporation is merely a legal document that creates a legal body without a soul.
• People who lose are the uninformed. If they understood the way the rich play the game, they could play it too. Then they would be on their way to their financial independence. 
• Every time they try to punish the rich, the rich don't simply comply, they react. They don't just sit there and pay more taxes. Instead, they search for ways to minimize their tax burden. They pay so much for smart tax accountants and attorneys, it was less expensive to pay them than to pay the government. 
• Section 1031: allows a seller to delay paying on buying an more expensive real estate.
• If you work for money, you give the power to your employer. If money works for you, you keep the power and control it.
• Financial IQ is made up of knowledge from the four broad areas of expertise:
• 1. Accounting: Ability to read and understand financial statements that allows you to identify strength and weakness of any business.
• 2. Investing: Money making money.
• 3. Understanding markets: If the investment makes sense based on the current market conditions. 
• 4. The law: A person who understands the tax advantages and protections can get rich so much faster than a regular employee.
• Tax advantages: Corporations earns, spends then taxed.
• Protection from lawsuits: When someone sues a wealthy individual, then find that wealthy person actually owns nothing. They control everything but own nothing. It's the corporations that own which is controlled by that person.
• More about corporations. Corporation is nothing but private or public company in Indian context.
• Ques:
• 1. Do you agree with rich dad's assessment of Robin Hood, that he was a cook? Why or why not? 
• 2. Have taxes created a bigger problem with government spending?
• 3. Do you think members of the middle class and the poor realize that the burden of taxes has fallen to them?
• 4. Do your beliefs fall under the banner of capitalism or socialism? What are the benefits and downfalls of each way?
• 5. Are the rich right to use the advantages of corporations to avoid paying taxes? Do you think more people could follow suit if they understood the system better?
• 6. What are specific ways that you yourself could benefit from using a corporations for your assets?

Chapter 5:  The Rich Invent Monday

• Often in the real world, it's not the smart who get ahead, but the bold.
• For example Graham Bell, he made a multi-billion industry because Western Union had refused his offer of $100,000.
• We all have tremendous potential, and we all are blessed with gifts, yet one thing holds all of us back is some degree of self-doubt. Your financial genius requires both technical knowledge as well as courage. If fear is too strong, genius is suppressed. I strongly urge students to learn to take risks, to be bold.
• "Why should I bother developing my financial IQ?", 
• "Just to have more options". 
• I would rather be welcoming change than dreading. 
• Easier to tell if the deal is bad deal, or make a bad deal good.
• Great opportunities are not seen with eyes, they are seen with mind.
• I would rather be excited about making millions than worrying about not getting a raise.
• Land was wealth 300 years ago, then factories and production. Today wealth is in information. Information flies around the world at the speed of light. The wealth can't be contained by boundaries and borders as land and factories were. The changes will be faster and more dramatic.
• Games reflect behavior (like Cashflow), they are instant feedback systems. Instead of teacher lecturing you. games give you a personalized lecture.
• Just like a board game, the world is always providing us with instant feedback.
• Cashflow game:
• Some people accumulate lots of money but don't know what to do with it. Then everyone seems to be getting ahead of them, and that is true in real life.
• There are people who get the right opportunity card and then not have enough money.
• I've seen people pull a great opportunity card, read it out loud, and have no idea that it's a great opportunity. And I know people more like that than all the others combined.
• Financial intelligence is 
• simply having more options. 
• If the opportunity is not coming your way, what else you do to improve your financial position. 
• What else can you do if you have a good opportunity but no money and the bank doesn't support you? Helps you create your own luck. You take whatever happens, then make it better.
• 
  
• Robert's trade
• He bought a house at $20,000 which was prices at $75,000 (from a down size of $100,000). He borrowed $2000 from his friend for 90 days, and sold it for $60,000. And paid back $2000, so technically I have no money in the transaction. that means money is not real.
• Which one is harder to you?
• Work hard -> Pay 50% tax -> Save what if left -> Earn 5% -> which is also taxed.
• Take time to develop your financial intelligence. And grow the asset columns.
• Financial intelligence is made up of:
• Accounting: Ability to read numbers
• Investing: Science of making money
• Understanding the market: Science of supply and demand. Robert house deal is a good example.
• The Law: Awareness of accounting corporate, state and federal regulations.
• Reasons why Robert shared examples:
• To inspire people to learn more.
• To let people know it is very easy if the foundation is strong.
• To show that anyone can achieve great wealth.
• To show that there are millions of ways to achieve your goals.
• To show that it's not rocket science.
• Robert's trade continue
• Found a "For sale" sign for long, Robert bought the house for $45,000 which is $20,000 less than the asked price. A year later sold It for $95,000. 
• Then from the earned money, bought a 12 apartment building for $300,000 and sold it for $495,000.
• Then bought a 30-apartment unit for $875,000 for 225,000 down and sold for $1.2 million
• The point here is, how small amount can grow into a large amount.
• The really hot deals are not served to novices. Often the best deals that make the rich even richer are reserved for those who understand the game.
• It's not gambling if you know what you are doing. It's gambling if you're just throwing money into a deal and praying.
• There is always a risk, it is financial intelligence that reduces that risk.
• Invest more in financial education than in stocks, real estate or other markets.
• Sometimes you win, sometimes you learn. Bu have fun. Most people never win because they're more afraid of losing. Schools say mistakes are bad, and we are punished for mistakes. Yet if you look, humans are designed to learn from mistakes.
• If the opportunity is too complex and I do not understand the investment, I don't do it. Simple match common sense is all you need to do well financially.
• Two kinds of investors:
• Who buys a packaged investment. Mutual fund, REIT, bond.
• Who creates investments. If you want to be second type of investor, develop three main skills:
• 1. Find an opportunity that everyone else missed. 
• 2. Raise money. There are many ways that don't require a bank for investment.
• 3. Organise smart people. Hire a person who is more intelligent than they are. When you need advice, make sure you choose an advisor wisely. 
• Ques: 
• 1.  Robert says that it's not so much that lack of technical information that holds us back, but more the lack of self-confidence. What is an example is your life or someone else's where self-doubt got in the way of a great opportunity.
• 2.  Some people have a lot of money but don't get ahead financially. Why is that?
• 3. As you have developed your own financial intelligence, how has it helped you see more easily whether a deal is good?
• 4. Rober's philosophy is to plan seed inside his asset column, starting small and seeing what grows. How are you planting seeds in your asset column right now? If you aren't what could you do to be able to start?
• 5. Robert lists two kinds of investors. Which one are you? Is that what want to be?
• 6. How have you seen fear of failure play out in your life, and how did it prevent you from taking advantage of opportunities? What can you do to conquer that fear in future?

Chapter 6:  Work to Lean - Don't Work for Money

• A journalist didn't like Robert's advice to take sales training thinking she would never stoop so low as to learn to sell. 
• There are talented people are around us who struggle financially, they are just one step away from greatness.
• When it comes to money, only skills most people know is to work hard.
• Many people know how to make better hamburgers than McDonald, but still, McDonald's knows better how to sell hamburgers.
• Robert's journey
• Graduated from US Merchant Marine Academy in 1969.
• Worked as a third mate on a Standard Oil tanker fleet (to learn international trade).
• Then joined Marine Corps and lean how to fly (to earn how to lead troops).
• In 1973, joined Xerox in sales, even though he was a shy person. Xerox had one of the best sales-training programs.
• Launched his first company in 1977.
• Instead of simply working for money and security, take second job to learn a second skill. Many will resist, because they are not ready to change. But it's like going to the gym. Hou might have to take yourself into starting, but you'll be so glad that you did when the workout is over.
• The main management skills needed for success are:
• Management of cash flow.
• Management of systems.
• Management of people.
• Selling and marketing are difficult for most people, primarily due to their fear of rejection. The better you are at communicating, negotiating and handling your fear of rejection, the easier the life is.
• Rich dad always donates to church, charities, and to his foundation. He knew, that to receive money he also had to give it. Poor dad always said he'd give money if he had extra - but he never had that extra.
• It may not make immediate mathematical sense to leave a promising job for another, but the skills you will gain will lead to greater numbers in the longer run.
• Ques: 
• 1. Do you know extremely talented people who make very little money? What could they be doing differently?
• 2. How have you sought additional skills beyond your specialty? What was the result?
• 3. Was there a time you stayed in a secure job rather than strike out into a new position that might've gained you more in the long run? What was the basis of your decision?
• 4. If someone were to ask you advice on what the most important skills are for them to learn in their working life, what would you tell them?
• 5.  What role does giving play in your life? Do you see it as an important part of your success?
• 6. What are different ways you could give that you aren't currently?

Chapter 7:  Overcoming Obstacles

• The primary difference between a rich person and a poor person is how they manage fear.
• Five reasons why financially literate people may still not develop abundant asset columns of large cash flow:
• Fear
• Cynicism
• Laziness
• Bad habits
• Arrogance
• Fear
• I have never met a rich person who has never lost money, but I've met a lot of poor people who have never lost a dime.
• The fear of losing money is real. Everyone has it. Even the rich. But it's not having fear that's the problem, it's how you handle fear.
• If you hate risk and worry, start early.
• When Texans win, they win big. And when lose, it's spectacular. The Alamo is a great story of brave people who chose to fight, knowing there was no hope of success. So how do Texans handle failure? "Remember the Alamo!"
• People are so afraid of losing that they lose.
• Winning usually follows losing. Before I finally learned to ride a bike, I first fell down many times.
• Failure inspires winners. Falling off my bike was part of learning to ride. For winners, losing inspires them. For losers, losing defeats them.
• Just like "Pearl Harbor", it turned America's greatest losses into the reason to win. America soon emerged as a world power.
• 90% of Americans struggle financially because they play not to lose. They don't play to win.
• To make progress, you must go unbalanced, be focused. Don't put few eggs in many baskets, put a lot of your eggs ina few baskets and FOCUS. Bill Gates was focused, and Thomas Edison was focused.
• Overcoming Cynicism
• The sky is falling! The sky is falling! Story of Little Chicken.
• All of us have doubts I'm not smart. I'm not good enough. So and so is better than me. Our doubts often paralyze us. We play the What-if game. What if the economy crashed right after I invest? Or we have friends/family who will remind us of shortcomings.
• If it's such a good idea, how come someone else hasn't done it?
• These warnings about the sky falling are 'noise'. Noise is either created inside our heads or comes from outside from friends/family.
• Robert showed a good real estate deal, his friend bought it but canceled after two weeks because his neighbour says it's not a good deal, he was not even an investor. Today, he still has done nothing.
• Robert has tax-lien certificates instead of CDs. Got 16% return where CD could give only 6-8%. When someone tells it's risky, Robert ask if you've done it on which they replies, NO. Just head about it from a friend or a magazine.
• Doubt is expensive.
• Cynic talking: When someone who criticizes and doesn't analyse, let's their doubts and fears close their mind instead of open their eyes.
• Finding a good manager is important. They not only takes care of property but also get info of good deal before real estate agents.
• So when you're in doubt just do what Colonel Sanders (KFC) do to his little chicken, he fried it.
• Overcoming Laziness
• Busy people are often the most lazy.
• People who are too busy to take care of their wealth, there are people who are too lazy to take care of their health. They stay busy as a way of avoiding something they do not want to face.
• If they're not busy at work or kids, they're often busy watching TV, fishing, gold or shopping.
• Cure for laziness: a little greed. A little greed is good.
• "I can't afford this", shuts down the brain. Instead, say "How can I afford it?" Opened up the brain and forced it to think and search for answers. The human spirit is very , very powerful. It knows it can do anything. "I can't afford it" breaks a war inside you. Your spirit is angry and lazy mind must defend it's lie.
• Overcoming Bad Habits
• Our lives are a reflection of our habits more than our education. 
• Robert pays himself first. He firmly believes in paying the bills on time, just pays himself first.
• His asset column is more important to him than the government.
• He doesn't say not to pay, just pay myself first.
• If he pays himself first, the pressure to pay taxes and the other creditors is so great that it forces him to seek other forms of income. The pressure becomes his motivation. He has worked extra jobs, started other companies, traded in stock market to just make sure those guys don't yell at him.
• BUT DON'T TAKE YOUR SAVING OUT because of that pressure. Become stronger(find more sources of income), not weaker(don't withdraw savings).
• Overcoming Arrogance
• What I know makes me money, what I don't know loses me money. 
• Every time I'm arrogant I lose money because when I'm arrogant, I truly believe that what I don't know is not important.
• When you know you are ignorant in a subject, start educating yourself by finding an expert in the field, book, or course.
• Ques:
• 1. How have you experienced the fear of failure in your life? What you able to conquer that fear? How?
• 2. Rich dad recommended we have the attitude of Texans: Wind big, but if you lose big, shout about in and use it as a rallying cry. What's the biggest challenge for you in taking on that attitude? Does it excite you or frighten you?
• 3. How do you handle the cynics in your life who try to discourage you from taking risks that you believe have a good chance of winning?
• 4. Have you avoided certain investment vehicles because of "I-don't-want-to" (such as, I don't invest in real estate because I don't want to fix toilets)? How might you react differently next time?
• 5. Do you agree with the statement that a little greed is the answer to curing laziness? Why or why not?
• 6. How has greed or desire driven you in your life?
• 7. Do you pay yourself first, or your bills? If you pay yourself last, what steps can you take to change that?
• 8. Has arrogance ever cost you an opportunity? What did you learn from that?
• 9. What's an area of financial knowledge that you are ignorant in? What are some resources you could seek our to educate yourself on that topic?

Chapter 8: Getting Started

• There is gold everywhere. Most people are not trained to see it.

• Each of us has a financial genius within us, it lies asleep because our culture has educated us into believing that the love of money is the root of all evil.

• I offer you the 10 steps I have personally followed to awaken financial genius.

• Step1. Find a reason great than reality: the power of spirit
  > If you ask most people if they would like to be rich or financially free, they would say yes, but then reality sets in, the road seems too long with hills to climb on.
  > Just like the U.S Olympion, she used to get up every morning at four to swim for three hours before going to school. She has to study and keep her grades up like everyone else. She expressed why she was able to do so "I do it for myself and the people I live with. It's love that gets me over the hurdles and sacrifices.
  > A reason or response is a combination of "wants" and "don't wants.".
  Don't wants: I don't want to work all my life. My dad worked hard his life, but he couldn't 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.
  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.
  > If your reasons are not strong enough, then the reality of the road ahead may be greater than your reasons.
  > Robert has lost money and been set back many times, but it was the deep emotional reasons that kept him standing up and going forward.

• Step 2. Make daily choice: The power of choice
  > With every dollar we get in our hands, we hold the power to choose our future: to be rich, poor, or middle class. Our spending habits reflect who we are.
  > Most people choose not to be rich. For 90% of population, being rich is too much of a hassle so they say: "I'm not interested in money", "I'll never be rich", "I don't have to worry", "I'm still young", "When I make some money, then I'll think about my future".
  > Having no money should not be an excuse to not learn. But that's a choice we make daily: the choice of what we do with our time, our money and what we put in our heads.
  > Invest first in education, the only real asset you have is your mind. Each of has the voice of "Watching TV, read gold magazines, or go to ceramics class of financial planning class.
  90% of population buys TC and only 10% buys business books.
  >Robert goes to seminars, at least two days long seminars. He does atleast two courses every year.
  After reading Warren Buggett, he thinks like him. "How would Donald Trump do this, or Warren Buffett"?
  > Listening is more important than talking.
  > People who buy stocks or real estate, but never invest in their greatest asset, mind. Just because you bought a house of two doesn't make you an expert at real estate.

• Step 3. Choose friends carefully: The power of association.
  > I have friends who as rich as well poor. I learn from all of them. From Rich I lean what to do, and from poor what not to do.
  > I have several billionaire friends, three of them report a same phenomenon: Their friends with no money, have never come to them to ask them how they did it. But they do come asking for one of two things: loan or job.
  > In business channels on TV, some experts say the market is going to crash, other say it's going to boom. If you're smart, listen to both, keep your points open because both have valid points. Unfortunately most poor people people listen to Chicken Little.
  > Smart investors don't time the markets, if they miss a wave they search for the next one. Wise investors buy an investment when it's not popular. They know profits are made when they buy, not when they sell.They get in position for the next big swell. That's the information you get from your rich friends. Sooner you know, the better your chances are for profits with minimal risks.

• Step 4. Master a formula and then learn a new one: the power of learning quickly.
  >Be careful what you learn, because your mind is so powerful that you become what you put in your head.
  > Everyday millions of people get up, go to work, earn money, pay bills, balance chequebook, buy some mutual funds and go back to work.
  > If you’re tired of what your’re doing, or you’re not making enough it’s simply a case of changing the formula via which you make money.
  > Eg. Robert took a class on real estate foreclosures when he was 26. Next trick was to put it into action, this is where most people stop. So after he master that formular, he went in search of other formulas.
  > In today’s fast changing world, it’s not so much what you know anymore that counts, because often what you know is old. It’s how fast you learn.
  
  

• Step 5: Pay yourself first: the power of self-discipline.
  This is the most difficult to mast if it’s not already a part of your makeup.
  > Three most important management skills:
  1) Cash flow
  2) People
  3) Personal time
  The three matter in the way you live your life as an individual, or as part of a family/business/charitable org/city/nation.
  > “Pay yourself first” comes from the George Clason’s book “The Richest Man in babylon.
  There have been times in my life when, for whatever reason, cash flow was far less than my bills, I still paid myself first. My accountant and bookkeeper screamed in panic, “They’re going to come after you. The IRS is going to put you in jain.” “You’re going to ruin your credit rating”, “They’ll cut off the electricity.” I STILL PAID MYSELF FIRST
  > Most people allow the world to push them around. A bill collector calls and you “pay or else”. A sales clerk says “Oh, put it on you charge card”. Real estate agent tells, “Go ahead”. This is what the book is about - having the guts to go against the tide and get rich. You may not be weak but when it comes to money, many people get wimpy.
  >Although I pay my bills last, I’m financially astute enough to not get into a tough financial situation.
  > When I occasionally come up short, I still pay myself first. I let the creditor and even the government scream. They go me a favor, the inspire me go out and create more money.

To successfully pay yourself first, keep the following in mind:
1) Don’t get into large debt. Keep your expenses low. Build assets first.
2) When you come up short, let the pressure build and don’t dip into your savings or investments.

• Step 6: Pay your brokers well: the power of good advice.
  > If people are professionals, their services should make you money. And the more money you make, the more money I make.
  > We live in the information age, information is priceless, a good broker should provide you with information, as well as take the time to educate you.
  > Not all brokers are created equal. Unfortunately most brokers are only salespeople. They sell but themselves own little or not real estate. I first find out how much property or stocks they personally own and what percentage they pay in taxes.
  
  

• Step 7: Be an Indian giver: the power of getting something for nothing
  >Like Indians wanting their blankets back after use, we should also need to take our initial money back as soon as possible to technically own an asset for free.
  >Eg Roberts bought a small condominium for 50k, and in about three years, he got 50k in rent so Robert owns that asset without having investment money into it.
  > Robert has also lost money on investments. Out of 10, he makes home run on 2-3, 5-6 does nothing and lost on 2-3. But the limit he lost to only the money he has in at that time.

• Step 8: Use assets to buy luxurious: the power of focus
  >Robert shares story of friend’s son who wanted to buy a car at 16. Robert suggestion: It might relieve the pressure in the short term, but what you have taught him in the long term? Can you use this desire to own a car and inspire your son to learn something? His friend have his son 3k and asked he could use it to find a stockbroker and buy/sell stocks. Once he had 6k with the 3k money, the money would be his and for the car. This son after learning stocks, stopped demanding for car.
  > If you give 100 people 10k, after one year:
  80 would have nothing left. Car/Electronics/ Holidays.
  16 would have increased by 5-10%
  4 would have increased it to 20k

> We focus on borrowing money to get the things we want instead of focusing on creating money. One easier in the short term, but harder in the long term.

• Step 9: Choose heroes: the power of myth
  I pretended I was a famous baseball player. It’s one the most powerful ways we learn, and we often lose that as adults.
  > Copying or emulating heroes is true power learning.
  > I also have heroes such as Donald Trump and Warren Buffett. I follow what they invest in, and I read anything I can about his point of view on the market and how he chooses stocks.
  > When I’m in market or I’m negotiating a deal, I’m subconsciously acting with the bravado and confidence of Trump.
  > By having heroes, we tap into a tremendous source of raw genius.

• Step 10: Teach and you shall receive: the power of giving
  Rich dad always donates to church, charities, and to his foundation. He knew, that to receive money he also had to give it. Poor dad always said he'd give money if he had extra - but he never had that extra.
  > If you want something, you first need to give.
  > Whenever you feel short or in need of something, give what you want first and it will come back in buckets.
  > I want money so I give money and it comes back in multiples. I want sales, so I help someone else sell something, and sales come to me. I want contacts, I help someone else get contacts.
  >God doesn’t need to receive but humans need to give.
  > Guy sitting with firewood in his arms on a cold, freezing night. “When you give me some heat, then I’ll put some wood in you!”. When it comes to money, love, happiness, sales, and contacts, all one needs to remember is to give first.
  > There are times when I have given and nothing has come back, or what I have received is not what I wanted. But upon closer inspection and soul searching, I was often giving to receive in those instances, instead of giving for the joy that giving itself brings.

• Ques:

• 1. What are the reasons you want to become rich, your ”wants” and “doesn’t wants”? Would Robert think they are strong enough?

• 2. Are you spending habits reflecting the life you want? If not, what can you change?

• 3. What are you choosing to put in your head every day? When was the last time you took a seminar or read a business book (other than this)?

• 4. What have you learned from your friends about finances, good or bad?

• 5. Would you say your self-discipline muscle is in shape of needs a good workout?

• 6. Do you have a board of directors - brokers and other professionals you pay well for their excellent information and ability to make you money - in your life?

• 7. Did you understand the concept put forth in step 7? Id not, discuss it with your study partner?

• 8. The last time you purchased a luxury, how did you pay for it?

• 9. Who is your financial hero? How did you emulate this person in your actions?

Chapter 9: Still Want More? Here Are Some To Do's

• Many people see 10 steps in ch8 as philosophy than actions. So for those who want a to-do list on how to get started, here are some things I do, in abbreviated form.

• 1. Stop doing what you’re doing. Take a break and assess what is working and what is not working. Insanity is doing the same thing over and over and expecting a different result.

• 2. Look for new ideas. I go to bookstores and search for books on what I want to learn. I call them formulas. I buy how-to-(anything) books on formulas I know nothing about. Most people do not take action, or they let someone talk them out of whatever new formula they are studying.

• 3. Find someone who has done what you want to do. Take them to lunch and ask them for tips and tricks of the trade. Ex. Robert took a tax officers to learn about 16 percent tax-lien certificates.

• 4. Take classes, read, and attend seminars. Some are free and inexpensive and some are expensive. I’m wealthy and free from needing a job simply because of the courses I took.

• 5. Make lots of offers. People who are not investors have no idea what it feels like to try to sell something. I have had a piece of real estate that I wanted to sell for months, I would have welcomed any offer. The game of buying and selling is fun. Someone might say yes. I always make offers with escape clauses, such as the approval of a business partner, which is actually a cat. If they accept the offer, and I don’t want the deal. Finding a good deal, the right business, you must go to market and talk to alot of people, make a lot of offers, counteroffers, negotiate, reject and accept.

• 6. Jog, walk, or drive a certain area once a month for 10 minutes. Look for a change. I notice a real estate sign that are up for a long time, that means the seller might be more agreeable to deal I watch for moving trucks going in or out. I stop and talk to the drivers. I talk to people who purchased, specially the new ones and find out why they’re moving. It takes only few minutes a month, and I do it while doing something else like exercising, or going to and from the store.

• 7. Shop for bargains in all markets. Supermarket sale -> customer buy in bulk. But when the housing or stock market has a sale, customer runs away. When supermarket raise it’s price, customer goes to some other place but when housing or stock goes up same customer often rushed in and starts buying.

• 8. Look in the right places. Neighbor bought a house for 100k, Robert bought in the neighbourhood for 50k. He shopped with a broker who owns no property of her own. I shopped at foreclosure auction.

• 9. Look for people who want to buy first. Then look for someone who want to sale. Robert’s friend was looking for a certain piece of land, Robert bought a larger piece, sold part of it to friend and kep the remaining with him, which is technically free for him. Buy the pie, cut it into pieces

• 10.  Think big. Retailers love giving volume discounts because most business people love big spenders. So even if you’re small, you can always thinking big. Robert had a computer company, used to take orders from friends, then went to dealers to close a great deal.

• 11. Learn from history. All the big companies on the stock exchange started small. Bill Gates, KFC colonel Sanders.

• 12. Action always beats inaction.

• Ques:

• 1.Does this to-do list inspire you or intimidate you?

• 2. What actions are you already taking from the above list?

• 3. After reading the list, which item jumps out at you as something you hadn’t considered or fully utilised? What steps can you take to put it into action in your life?

Chapter 10: Final Thoughts 

• Main reason why I wrote this book was to share insights into how increased financial intelligence can be used to solve many of life’s common problems.

• Robert shares an example of his friend, who was putting $300 every month as children’s college education. So far he had only $12,000, he had 12 more years to save for college since his oldest child was then six years old.

• With the Robert’s suggestion of buying a house with some of the money in college fund, bought a house of $79,000 with $7,900 down and they figured out in 12 years, most of the debt would be paid of and still his friend be getting $800 a month.

• Three years later, he sold the same in $1560,000, with $80,000 profit he bought a mini-storage facility which was sold for $330,000.

• It took only $7,900 to start and a little financial education.

• If you want more money, simply change your thinking. 

• Money is only an idea. If you want more money, simply change your thinking. 

• Every self-made person started small with an isea, and then turnied it into something big.

• I encourage you to learn, because it’s not that hard. In fact, it’s pretty easy once you the hang of it.

• Start early, buy a book, go to a seminar, practice. Start small.

• Average investors think investing is risky because they have not been formally trained to be professional investors. As Warren Buffett: “Risk comes from not knowing what you’re doing.”

• The three incomes:

• Ordinary earned: Go to school, get good grades and find a safe secure job. This is working for earned income.

• Portfolio: Income from stocks or bonds.

• Passive: Income derived from real estate.
  => The key to becoming weathy is is the ability to convert earned income into passive or portfolio income as quickly as possible. Taxes are higher on earned income, that is another reason.
  => If you want to be rich, you must know what kind of income to work hard for, how to keep it and how to protect it from loss.

• Take action: All of you were given two great gifts: your mind and your time. It’s up to you to do what you please with both.
  Every day with every dollar, you decide to be rich, poor or middle class.
  You and your children’s future will be determind by choicese you make today, not tomorrow.

• Ques:

• 1. What’s the first thing you’re going to do when you finish this study guide? 

• 2. What are you waiting for?

Action items

• AI one

• Self-evaluation of assets/liabilities.
• Learn to invest in stock markets.
• Learn more about real estate. How to find good deals, about property auctions.
• Learn about how to buy stocks for non-public companies.
• Setup goals, what do you want in next 5 years, 10 years, 20 years.
• Create a plan with quarterly milestones. It's okay to miss, this is required to keep a track.
• Find a reason greater than reality.
• Ask yourself questions. To know what do you know and what you don't. See for the answers. It's really fun finding the answers.
• Don't listen to the world, chasing your dream is fun.
• AI Two
• Wait, make a plan.
• Read books, take courses about what you want to learn (Investing/Real estate).
• Find a hero, read about that. Understand how he dealt with failures/cleared doubts.

Books:

• Think and grow rich (Page 340)

• Rich Dad’s CASHFLOW (Page 341)

• Guide to investing by Robert Kiyosaki (Page 341).
• Why rich are getting richer by Robert Kiyosaki.
• The Richest Man in babylon (Chapter 8).
• Cashflow Quadrant by Robert
• Check? TODO
• "The Intelligent Investor" by Benjamin Graham
• "Security Analysis" by Benjamin Graham and David Dodd
• "The Art of Technical Analysis" by John Murphy
• "The Millionaire Fastlane" by M.J. DeMarco (a more recent book, but aligns with the "Rich Dad Poor Dad" philosophy)
• Garrett Sutton's books on corporations provide wonderful insight into the power of personal corporations.
• The Millionaire Next Door" by Thomas J. Stanley and William D. Danko:

Other Resources

• Page 7, richdadradio
• CashFlow 101, 202, Classic. (Page 342, 343).
• Cashflow classic.