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Reconsidering the Advice in 3 Popular Personal Finance Books
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Popular Personal Finance Books are Inspirational
Most of the popular finance books lack substantive advice on investing. They are inspirational & their core message is a good one: You are ultimately responsible for your own financial success.
But a smart reader will have to go elsewhere for an in-depth discussion of how to set up a portfolio & choose among stocks, bonds, exchange-traded funds or mutual funds.
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Rich Dad's Most Unconventional Idea
R. Kiyosaki's "Rich dad, Poor Dad" reads like a novel. The most shocking message of the book:
Don’t focus on your job or career. Think primarily about building personal wealth.
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Rich Dad's Questionable Financial Advice
“With low interest rates, and an uncertain stock market, the old adages of saving and investing for the long term make no sense.”
It is what Kiyosaki recommends in his famous book, but saving and investing for the long term are exactly what most experts say you should do.
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SIMILAR ARTICLES & IDEAS:
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Rich Dad, Poor Dad
"Rich Dad, Poor Dad" is a best-selling personal finance book, written by Robert T. Kiyosaki and Sharon L. Lechter.
It reads like an allegorical story about Robert Kiyosaki a...
“Poor dad” vs "Rich Dad" Mentality
The “Poor dad”, a stereotype for the regular salary man, believes that one should work for money as an employee at a stable job. This mentality can trap a person into working a job they don’t love, but is willing to stick with because they have to pay the bills.
The "Rich dad", an entrepreneur, thinks wealth comes from experience-based learning (learn on the job, by becoming an entrepreneur) and multiple income streams.
When the “poor dad” encourages working your way up the ladder, “rich dad” laughs and says, “Why not own the ladder?”
Key lessons for becoming a "Rich Dad"
According to Kiyosaki in his book "Poor Dad, Rich Dad", rich people do certain things poor people don't:
- The rich buy assets (things that generate revenue like bonds), not liabilities (things that cost money like rent).
- The rich become financial literate through experience, not by studying hard at fancy schools.
- The rich learn to sell early on.
- The rich manage fear better. They take more risks and don't play it safe.
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Side Hustle to Make More Money
You don't have to sacrifice all of your free time to start a side hustle, use the time you’re comfortable with and make a little bit of progress every day.
Take Action
Get to working on improving your finances today, not tomorrow. Reading the steps and thinking you’re capable of doing it but postponing it is just an excuse, an unprofitable one.
Communicate With Your Partner
Talking about your financial goals, and scheduling time once a month to go over your finances together can prevent money from affecting your relationship.
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The Cashsflow Quadrant
The Cashflow Quadrant is a concept from Robert Kiyosaki's "Rich Dad Poor Dad" which represents the different methods by which income is generated:
- Employee (E) – Othe...
Active vs Passive Income
There are 2 types of income:
Active Income: You are trading time for money. In order to make money you must perform something. Every day you start from zero.
Passive Income: You do not have to be present to generate income. Things like real estate, stocks, bonds are sources of passive income. You are literally making money while sleeping.