The book Rich Dad’s Retire Young Retire Rich examines Robert Kiyosaki’s unique approach to personal finance.
According to him, you have to learn how to leverage your mind, plan, and actions if you want to get rich.
The author proves that making money is easier than you think, whether you cultivate simple habits for success or use debt to acquire income-generating assets.
ou may be wondering if you should read the book. This book review will tell you what important lessons you can learn from this book so you can decide if it is worth your time.
At the end of this book review, I’ll also tell you the best way to get rich by reading and writing.
Without further ado, let’s get started.
Lesson 1: Simple habits lead to success
Hundreds of books on how to get rich are published each year. However, determining who gets it right and who doesn’t is difficult. Readers are frequently advised to take difficult-to-implement steps, but they never do so.
Rich Dad recommends focusing on simple, good habits rather than complex models and strategies.
If you want to be wealthy, you should cultivate wealthy habits while avoiding poor ones. These habits are also simple to establish and will improve your financial situation.
Here are two of the habits that Kiyosaki attributes to his financial success. Learning is one of the most important habits you can cultivate.
We live in an information age that is both fluid and dynamic. That is distinct from the twentieth-century industrial age. Most people used to learn a set of skills and then spend their working lives applying them.
Today, however, we must continue to learn. Things change all the time; what worked yesterday may not work tomorrow. As a result, our most valuable asset is our knowledge.
To put it another way, what really matters is the ability to see what others cannot. Every day, whether you’re reading books, attending seminars, or simply chatting with people from different industries, you can learn something new.
You are investing in yourself when you learn new things, gain new insights, and develop new ideas. You will also notice opportunities before others.
Because you’ll almost certainly need to borrow money to take advantage of all of these opportunities, our second tip is to hire a good bookkeeper.
Most people with bad credit are ineligible for loans. Finally, if you can’t demonstrate that you can manage your own money, there will be little trust placed in you as a money manager.
The job of a bookkeeper is to keep records that demonstrate you have an accurate picture of your assets, liabilities, and income. You gain access to new resources, such as positive debt, by increasing your financial leverage.
Lesson 2: Using debt to purchase assets has infinite returns
Do you understand that debt is a type of leverage? It may appear to be counterintuitive. Because getting out of debt takes so much time and effort, most people devote a significant amount of time and energy to it.
Nonetheless, if used correctly, debt can be a useful tool for making you wealthy. The key is to avoid getting into bad debt. Is there a distinction?
Simply put, good debt generates income, whereas bad debt drains it. In the first case, debt works for you; in the second, you work for it.
Borrowing money is done to acquire liabilities, or things that cost more money. Credit cards are used to finance expensive vacations, and car loans are obtained.
To service these debts, they must deduct a significant portion of their pay. Nonetheless, debt can be used to purchase assets, which generate income.
Real estate is an excellent asset to purchase with debt. You intend to either resell the property or rent out the space. Let’s take a look at the first real estate deal that Kiyosaki financed with debt to see how this works.
In 1974, Kiyosaki paid $18,000 for a beachfront condo in Hawaii. He was broke at the time, so he borrowed the money. His bank provided him with a $16,000 loan, and he paid the $2,000 down payment with a credit card.
He rented out the property after purchasing it. Despite this, the amount did not cover Kiyosaki’s loan and credit card payments, interest, and expenses. It also earned $25 per month, which is the equivalent of $130 today.
The sum may not be a king’s ransom, but the principle is important. Kiyosaki was able to generate an income even after covering all of his expenses, including the loan. This is referred to as an infinite return. In fact, we could simply call it free money.
Here’s a quick lesson to remember. You can make yourself richer by borrowing in the right way and using other people’s money. This usually entails investing in income-producing real estate, which is the subject of our next discussion.
Lesson 3: It takes a lot of duds to find the right property
What is the most effective method for locating a good deal on a real estate investment? Recognize the opportunities that others overlook! You won’t have to be as concerned as you think.
Real estate has its own quirks and unique bureaucratic hurdles, but it isn’t that dissimilar to other purchases. Before you buy anything, whether it’s a vacation, an appliance, or a pair of sneakers, you should shop around and compare prices.
As a result, seeing many properties is essential for understanding the real estate market. Rich Dad recommends using the 100:10:3:1 formula to evaluate potential investments. Looking at 100 properties, making an offer on ten of them, having three sellers accept it, and finally purchasing one of them is the process.
The 100:10:3:1 method teaches you more than just how to trade in the market. This practice, in addition to avoiding painful mistakes, is also fail-safe.
Kiyosaki’s lawyer friend decided to invest in real estate without using the method. She purchased a beachfront condo near San Diego after only viewing two units in the same complex.
She was losing $500 per month two years later because the homeowners’ association had raised their maintenance fees and she couldn’t charge as much rent as she had hoped.
Worse, she couldn’t sell her condo because she paid more than anyone else would. She could have avoided all of this if she had simply done her research on the local market.
According to Rich Dad, the moral of the story is that it takes kissing a lot of frogs before you find a handsome prince. People almost never compare potential investments. Instead, they base their decisions on hearsay, hot tips, or impulses.
Nonetheless, as we saw with Kiyosaki’s friend, people who dislike kissing frogs frequently marry the first amphibian they meet.
Lesson 4: A problem can be an opportunity
Every angler has a story about catching the elusive fish, but every real estate investor has a story about finding the perfect property that everyone else missed. Kim and Robert Kiyosaki are no exception. They discovered a small mountain cabin while on vacation in Pennsylvania.
When the Kiyosakis go on vacation, they don’t hesitate to use the 100:10:3:1 method. Opportunity can strike anywhere, so why not look into what’s available in other areas?
With this property, they didn’t just find a cash cow. Investing in real estate taught them an invaluable lesson: just because a property has issues does not mean it cannot be profitable.
While hiking in Pennsylvania in the late 1990s, the Kiyosakis stopped by a local realtor’s office to see what was for sale. Only one listing caught their attention: a run-down cabin on 15 acres for an unusually low price of $43,000.
How could the cabin be so inexpensive? Water was insufficient to support full-time occupants at the property. The Kiyosakis were unfazed and inspected the site themselves. They sought the advice of a well expert after looking around. The well had enough water, it turned out.
There was a problem in that the amount of water it produced varied depending on the time of year; some months received significantly less than others.
Installing 3,000-gallon water tanks to store excess water for the dry months was a simple solution. They kept this information to themselves, however, and offered $24,000 instead.
The owner of the cabin, who had been trying to sell it for years, agreed. Kiyosaki and the well expert returned to the property after the transaction was completed. He spent only $5,000 on the two holding tanks.
A month after the installation, Kiyosakis listed the cabin for sale, which included enough water for an entire family. A young couple who were thrilled to be able to live in the mountains bought the house within weeks. What was the total cost? $66,000 – a $37,000 profit
That is a lesson the Kiyosakis will never forget. With a little patience and creative thinking, investors can reap high returns on “problem” properties.
About the Author
Rich Dad is a best-selling franchise created by entrepreneur and investor Robert T. Kiyosaki.
Kiyosaki served as a Marine gunship pilot during the Vietnam War. He attended college in New York before joining the military. In 1977, he founded a company that sold Velcro surfer wallets.
He founded a global education company in 1985 that teaches investing to students all over the world. Kiyosaki sold his business empire and retired at the age of 47.
Buy The Book: Rich Dad’s Retire Young Retire Rich
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How To Get Rich By Reading and Writing?
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