I remember picking up the book ‘Rich Dad Poor Dad when I was in my college library more than 10 years ago. The title was intriguing however, I put it down as soon as I realised it is about money and personal finances. As a 20-year-old with no income whatsoever, I thought it was not relevant to me and proceeds to pick up something entertaining. Fast forward more than a decade, after having a family, buying a home and reading this book in one stretch, I thought to myself this is exactly what Robert T Kiyosaki discusses in his book. The rich teach their kids about money and the poor or middle class don’t. I was in a library full of books, I was a studious student not once in my two decades of being a student, no one taught me about money or how to build wealth.
My Regrets about not reading ‘Rich Dad Poor Dad’ in my twenties
Once I finished reading Rich Dad Poor Dad, I sat there thinking how reading this in my twenties could have changed my life for the better. I started earning decent money in my early to mid-twenties, however, I haven’t invested it in any assets, rather bought liabilities. Had I started investing some of my money in an ETF for example my financial status would be much different now. If you are reading this as a twenty-something-year-old, and you haven’t read the book yet, stop what you are doing and get a copy of the book. Here is a free audiobook on youtube. The reason, I was so gutted about not reading it in my twenties is due to a number of facts.
- you start earning in your twenties and reading this book in time will change your mindset about money and set you up for a better financial future.
- You will understand Assets Vs liabilities so before you spent significant money on something you will think about whether it is an asset or liability.
- It is the best time to start building wealth because you start making money, but you don’t have to worry about pre-school fees, nappies or mortgages yet. lol!
- Investing especially is time sensitive due to how compound interest work.
- I am not saying you shouldn’t have fun in your twenties, but the decisions you make now will impact your later life, especially when you don’t have much wiggle room with life’s responsibilities.
The Premises of Rich dad poor dad
The book tells the story of Kiyosaki’s two father figures, one who was wealthy but not formally educated, and another who had an advanced degree but struggled with money. Through his experiences with both men, Kiyosaki learned that traditional education and career paths don’t necessarily lead to financial success. Instead, he argues, it’s important to develop financial literacy and invest in assets that generate passive income. Kiyosaki emphasizes the importance of taking control of your financial future and encourages readers to take an active role in their financial education. The book is a roadmap for building wealth and achieving financial freedom
Asset Vs Liability
Anything that put money in your pocket is an asset. Anything that takes money out of your pocket is a liability. For example; you bought a new iPhone on a plan with any of the suppliers. Is it putting money in your pocket or taking money off your pocket? Every month it is taking about $80 from your salary as a liability. Now you are using the phone to shoot videos and upload them to a YouTube channel that makes you $1000, so even if you are paying $80 a month for this phone, it is not an asset but a liability. You get the idea now. Look at your cash flow and identify your assets and liabilities now.
How and What to Buy as Assets
Some of your income is spent on liabilities, but what can you buy as an asset? Kiyosaki talks about his experience in real estate. While real estate is a great investment, having enough money to have a deposit is often a hurdle for a beginner. The other easier option is investing in stocks and shares. I know there is a lot of anxiety around this due to financial illiteracy. Learn about it, there are lots of free resources available online, read books, and watch youtube videos. My recommendation is to read Girls that Invest very simple and easy to understand!
Better late than never, right? So, I have decided after reading the book that I have wasted my twenties but I am in my thirties and still have time. I am using Hatch to buy assets, although not much. Every time I get my salary, I pay myself first by investing in assets.
If this post makes you think about your cash flow and you have a closer look at your assets and liabilities, I will consider that as mission accomplished. Let me know your thoughts in the comments below or if you have any questions.
Click here to read more from kiwilotus.com
