Why so many of us are not rich, and why we won’t be getting rich anytime soon

As told by Robert T. Kiyosaki in Rich Dad Poor Dad

In the spirit of full disclosure, let me declare that I’m not rich. In a bid to change the awful trajectory that my money has been taking, I’ve committed the last few months to reading books and articles written by the rich. I want to grasp their minds. I want to know how to do it. I want to be rich.

One of the most important things that I’ve discovered from the literature I’ve consumed so far is that we have been trying to solve the wealth puzzle using the wrong formula.

For instance, in his ground-breaking book, Rich Dad Poor Dad, American author Robert T. Kiyosaki says that people are more often than not conditioned to believe that going to school and getting good grades gets you a secure job in a good company with a high pay, which leads to riches.

The book is an account by Kiyosaki, explaining how he learnt about making money from two fathers, one who was highly educated but poor, and another – the father of his best friend – who was less educated but a self-made millionaire. In essence, the book gives two accounts of what the two fathers thought about money, with ‘Rich Dad’ taking the unconventional route and ‘Poor Dad’ taking the route taken by many.

For example, one father advises Kiyosaki to study hard so that he can find a good company to work for, while the other dad advises him to study hard so that he can find a good company to buy.

In the book, Kiyosaki learns that making money is not taught in school, but at home.

“One of the reasons the rich get richer, the poor gets poorer, and the middle-class struggles in debt is because the subject of money is taught at home, not in school. Most of us learn about money from our parents. So what can a poor parent tell their child about money? They simply say ‘stay in school and study hard’. The child may graduate with excellent grades but with a poor person’s financial programming and mindset,” he writes.

Kiyosaki credits the lack of financial intelligence to the mess a majority of us are in. We go to school, get jobs, chase promotions and salary increments, but despite the additions, we are still stuck in the land of lack. Something he refers to as a ‘rat race’. “Money without financial intelligence is money gone too soon.”

What then comprises financial wisdom? Kiyosaki says that simply knowing the difference between an asset and a liability and choosing to invest in the former is what sets the rich apart from the poor.

“You must know the difference between an asset and a liability, and buy assets. If you want to be rich, this is all you need to know. It is rule number one, it is the only rule…Most people struggle financially because they do not know the difference between an asset and a liability.”

So how does one know the difference? According to the author, an asset is something that puts money in your pocket while a liability takes money out of your pocket.

Which is why, as Kiyosaki explains, a higher income does not solve the problem, but compounds it, hence the need for financial literacy.

Fear is also credited to why most people fail to get rich. This is because many refuse to leave comfort zones – such as non-progressive jobs – to chase the dreams and ideas that would make them money. “The fear of being without money motivates us to work hard, and then once we get that paycheck, greed or desire starts us thinking about all the wonderful things money can buy. A pattern is then set: get up, go to work, pay bills, get up, go to work, pay bills..”

He adds that for a majority of people, the reason they don’t win financially is because the pain of losing money is far greater than the joy of being rich.

Kiyosaki also speaks on the philosophy of the rich versus the poor where he explains that the rich invest their money and spend what is left while the middle class and the poor spend what they make and save what is left.

To get rich, the book urges people to mind their own business, instead of minding someone else’s which makes those people rich in the process, “financial struggle is usually the result of people working all their lives for someone else.”

Talent alone will also not make you rich. As Kiyosaki puts it, the talented folk hardly knows what to do with what they have. “The world is filled with talented poor people. All too often, they’re poor or struggle financially or earn less than they are capable of, not because of what they know, but because of what they do not know. They focus on perfecting their skills at building a better hamburger rather than the skills of selling and delivering the hamburger.”

The book, however, falls short in that it fails to speak more on ‘Rich Dad’ and explain how he exactly made the said millions. Additionally, it is tediously repetitive, dragging on the same issue over and over again.

Emphasis also needs to be drawn to the fact that ‘Rich Dad’ did not discourage youth against the school. In his defence, Kiyosaki explains that education is highly important, urging people to study and become empowered with knowledge.

(The writer @maggienjugunah is a business reporter at Capital FM)

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