Have you ever thought that there is more to life than just being an employee, but you have no clue how to get financial freedom?
In the recently held Robert Kiyosaki and the Masters of Wealth seminar, I was treated to 12 hours of non–stop learning. Let me share 10 great nuggets of financial wisdom that will change your perspective on money and wealth creation, which every Filipino should know.
10 Things I Learned About Money From Robert Kiyosaki
10. Saving money for retirement is an outdated idea.
Most people still adhere to the idea that the money they save today will give them financial freedom by living off of the interest when they retire in the future. This idea was good when the interest rate was at 15%, but now, with interest rates going below 2%, depositors are losing money because the interest rate can’t keep up with inflation. You are better off investing your money on assets that will produce money for you well into your retirement years.
9. Your house is not an asset.
To check if your property is an asset, a rule of thumb is to review your monthly cash flow. Is it putting money in your pocket or is it draining money from it? The property you are living in may be increasing in value in tune with the development of the area, but you will be spending money for its monthly upkeep and yearly taxes. Rethinking how we approach property investing is important. The house you own is a liability, while rental properties are assets because they put money in your pockets. It’s that simple.
8. The old rules about money do not apply anymore.
Back in 1971, U.S. President Richard Nixon unilaterally cancelled the US Dollar Gold Standard, which means that the U.S. Dollar is no longer backed by Gold. The Gold Standard used to keep over printing of money in check, but with this new policy, the current printing of money is reaching levels similar to the German Weimar Republic Hyperinflation.
7. Your report card after college is a balance sheet.
How good you are with money and investing matters to your banker. Why is it that some of the academically smart people have a negative net income? It’s because they don’t understand the relevance of the balance sheet. Successful Entrepreneurs gives modest focus on the Income section of the balance sheet; they instead beam in on the Asset section. The more assets you invest in, the more money you create.
6. Study the past to see the future.
Investing is all about knowing what will happen in the near future, so that you can put your money in assets that will benefit the foreseeable upward trend. Roberts says that if you want to see what will happen in the future, study the past. This is very sage advice because we all know that history repeats itself and if we look at what’s happening in the economy and study similar situations in the past, it is very probable that the results will be similar. We can thus invest in assets which we know will continue to be profitable no matter which way the economy will take its turn.
5. You need to have a good team.
No man is an island; this is true for everyone dealing in business. The reason why so many business people lose in the game is that they try to do everything themselves. Business is a team sport and in order to make money, you should have the right people in your team. Hang out with the right people, network with positive people and bring them into your team. Because with a great team, you are unstoppable.
4. One of the best ways to get rich is to help other people get rich.
Yes, Generosity begets generosity. It’s the best way to earn friends and also make more money. When you focus on improving the lives of other people, they will in turn focus their energy in helping you get what you want, becoming financially independent. The people that you help along the way may well turn out to be a key member of your inner circle and become part of your team.
3. The best way to learn about how to make money is to do, the second best is simulation.
Benjamin Franklin said, “Involve me and I learn”. Doing is still the best way to learn. So budding entrepreneurs should get busy on internships which will involve them in wealth creation. Real life experience is important. Robert, who was taught by his Rich Dad to invest using the game Monopoly, also recognizes that there are not a lot of internship programs out there. So, the second best way to learn investing is through simulation.
He created CASHFLOW® to simulate how investing works and through repetition, players will learn how to get out of the economic rat race and into financial stability.
2. Rich people make the most mistakes about money, but also learn the most about money.
Robert put it out plainly: business people don’t always succeed in their first venture; most of them crater. The winners are the ones who take the loss as an opportunity to learn, stand up and try again. They have the positive mindset to continue in their journey to financial freedom and not go back to being mere employees. Making money takes a lot of guts. It is a path that is filled with deep scarring lessons. Only people with the right attitude make it through to Prosperity Avenue.
1. The best education is financial education.
Most of us are educated to be workers after college. In order to achieve financial freedom, you have to make a paradigm shift away from the norm. You can well say that the people who are prosperous are extraordinary; you can’t expect to be extraordinary by going through regular school. Find a mentor who is willing to give you the right financial education or go through the courses being offered by mentors like Robert Kiyosaki. Financial Education is a process that takes time, make sure you invest your time correctly.