10 Lessons Rich Dad Taught His Kids About Money

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The book Rich Dad Poor Dad, by Robert Kiyosaki, tells the story of the author’s two dads—his real father and his best friend’s father. Both dads were highly successful in their respective professions, but they led very different lives and had very different philosophies on money, financial planning, and life in general. Kiyosaki points out 10 lessons he learned from his rich dad that helped him become financially successful as an adult.

1) It’s not how much you make, it’s how much you keep.

This is one of the most important lessons that a rich dad taught his kids about money. Just because you have a high income doesn’t mean you’re wealthy. What matters is how much of your income you save and invest. And the best way to do this is to live below your means.

2) Keep your overhead low

One of the main things that rich dad taught his kids was to keep their overhead low. This means not spending money on unnecessary things and only buying what you need. By doing this, you’ll have more money to invest and save.

3) Pay yourself first

The first lesson that rich dad taught his kids about money was to pay themselves first. This means setting aside a percentage of your income each month to save and invest. By doing this, you’ll ensure that you always have money to cover your expenses and reach your financial goals.

4) Give to get

Rich dad always taught his kids that in order to get money, they had to be willing to give it first. He would often give them allowance money and then challenge them to find a way to double or triple it. This instilled in them a sense of financial responsibility and resourcefulness from a young age.

5) Businesses are more profitable than jobs

The first and most important lesson that rich dad taught his kids about money is that businesses are more profitable than jobs. A job is simply exchanging your time for money, while a business is an investment that can generate passive income. That’s not to say that jobs are bad, but if you want to build wealth, you need to own a business.

6) There is no such thing as job security

In today’s ever-changing economy, it’s more important than ever to be financially literate and have a solid understanding of how money works. That’s why rich dad taught his kids these 10 important lessons about money

1) What is your financial education? – Your financial education is the foundation for everything you do in life, so make sure that you learn all the basics and take control of your finances at an early age.

2) Work hard now so you can enjoy later: Working hard now will give you the opportunity to enjoy your time later with less stress and worry.

3) Spend less than you earn: It may seem difficult when faced with a never-ending list of responsibilities, but spending less than what you earn will help put extra money into savings for emergencies or for investments. This tip is just as important as the first one because you don’t want to spend every dollar that comes your way.

4) Borrow from yourself before others: One of the simplest yet most powerful strategies for getting ahead financially is borrowing from yourself instead of others (which has huge tax advantages). The downside to this strategy is that not everyone has enough available cash on hand, which means they’ll need to find ways to create additional streams of income by investing their surplus cash.

5) Invest your assets for big returns: There are two types of assets that people should invest in–those with low risk and high returns like stocks, mutual funds, etc., and those with high risk and high returns like real estate. Investing your money wisely is essential if you want to increase your wealth over time.

6) Never get too comfortable with where you’re at: Remember that things change quickly, so it’s always good to set new goals for yourself. If there are things that you would like to accomplish in the future, start working towards them today.

7) A man without assets is only worth $500-$1000: In order to truly become wealthy, it’s important to think beyond material goods and accumulate assets. The great thing about these assets is that they tend to appreciate in value over time, so your net worth goes up even though you’re only doing business with paper. 8) Always know the difference between an asset and a liability: An asset is something that puts money in your pocket while a liability takes money out of your pocket. For example, consider whether your house would be considered an asset or liability.

A home typically appreciates in value over time, making it a valuable investment for most people who buy one; therefore, it’s considered an asset. On the other hand, someone might argue that a car is both an asset and a liability. While cars usually depreciate in value and require expensive maintenance, it’s still possible to use your car to generate income, such as renting it out.

9) Educate your children about money: Teach your children how to handle money responsibly and show them the importance of saving. You can start by teaching them these ten tips and continuing to educate them throughout their lives. Teaching your kids about money doesn’t have to be complicated. Teaching them these ten tips and continuing to educate them throughout their lives will be sufficient.

7) The most valuable asset you have in your financial education

Your financial education is the most valuable asset you have because it gives you the ability to make sound decisions with your money. The more you know about money, the better equipped you are to grow your wealth. Here are 10 lessons that rich dad taught his kids about money

1) Live like no one else now so later you can live like no one else.

2) Save at least ten per cent of your income in a tax-deferred account such as an IRA or 401k plan.

3) Buy quality investments, not pieces of real estate.

4) Always spend less than what you earn.

5) Never get into debt if you can help it.

6) Put together a team of professionals (attorney, accountant, broker, etc.) and use them year after year instead of just when you need them.

7) Set up your will and trusts early on to avoid expensive mistakes and costly court battles.

8) Have courage when making important decisions.

9) Practice buying low and selling high by investing in mutual funds based on their low price-to-earnings ratios, small market capitalizations, or superior yields rather than trying to pick individual stocks.

10) Teach your children these same rules.

8) Most people are financially illiterate and innumerate

A study by the Financial Industry Regulatory Authority found that 61% of Americans couldn’t pass a basic financial literacy test. And it’s not just older folks who are struggling — millennials are lagging behind, too. Just 36% of Americans aged 18 to 26 could correctly answer more than half of the questions on a five-question financial literacy quiz.

9) The best investment you can make is in yourself

Your education, your health, and your relationships are all important investments that you make in yourself. And, like any investment, you want to get a return on what you put in. When it comes to your money, the more you invest (in education, for example), the higher the return will be. Investing in yourself pays off.

The richer you become financially, the more likely it is that you’ll experience poor physical and mental health. You can’t take care of other people if you don’t take care of yourself first.

10) If you follow all the rules, you miss all the fun

You’ve probably heard the saying, If you don’t break the rules, you’ll never make any progress. And it’s true! Sometimes in order to achieve something great, you have to take a risk. That’s what rich dad taught his kids about money. He told them to always be willing to take risks and to never be afraid of failure. After all, it’s through taking risks that we learn and grow.

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Where the wild things roam, there my stories are born. Blogger. Explorer. Forever curious.

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