Money is one of the most important aspects of our life. But when it comes to education, there is little to nothing that we learn about money in school. Having a financial IQ is most important for every person who lives in a society. Robert T Kiyosaki is one of my favourite authors. Reading his books changed the way I look at money. It is a philosophy of money, which you won’t learn in any school.
1) The Rich don’t work for Money
Getting rich has got to do with your mindset more than the amount of money you have in the bank. The poor and the middle class trade their time for money. Time = Money. But the rich totally change this equation. The rich work to acquire assets which then make money for them so that they could enjoy their time.
2) Your House is not Your Asset
If anyone says,, “Your house is an Asset”, don’t just blindly believe it. The Rich buys their house last, but the middle class buys it first. Your house takes more money out of your pocket and doesn’t give any rental income because you are staying there. This is a liability. The problem with liabilities is they make you work more and take away your free time.
3) The more Assets you have the more Freedom you get
Once you crack the equation of money from buying assets than by trading your time, you are free to do whatever you want. Now you can use the next equation. Asset income – Liability = your Net Worth. Once your assets start paying you the money, you can buy liabilities with income generated from your assets. Here the middle class gets stuck. They only buy liabilities with their hard-earned money.
4) Having a Skill is more important than a Degree
The education system is outdated. What you learn in school is useless in the real world. There is a huge gap between schools, colleges and the real world. The method used to get degrees is very degraded. Schools and colleges teach us theories. In real life skills matter more than theories. 1 money-making skill is enough to take you far ahead of your peers, because very few people, actually focus on skills.
You can easily differentiate between a theory and a skill. A skill gives you the ability to solve a particular problem. You can make money by solving people’s problems, not math problems. Remember that.
5) Look at Money as your Employee
The poor and middle-class work for money ie, money employs them. But the rich make money work for them. This is the biggest difference. If the richest person in the country wants to earn every penny by his own hard labour, he would not have become rich. Instead, he finds good work for his money to work so that he could enjoy his time and his wealth.
Conclusion
Don’t follow the crowd. When it comes to money, most people are not successful. When you want to learn Piano, you don’t go for an average teacher. You want the best. Same way, When you want to learn about money, learn from the rich. Study the rich, what they do with their money, and how they spend their time, and you will understand how money works.