3 Steps to Financial Freedom

The book Rich Dad Poor Dad by Robert Kiyosaki is a game-changer for anyone interested in personal finance and building generational wealth.

In his best-selling book, Robert Kiyosaki tells the story of two fathers who had very different views on earning money. One dad, his “Poor Dad” encouraged him to go to school, get an education, and work for a good company.

His other dad, “Rich Dad”, had a very different view on how money should be acquired. Although he believed in education, he also believed that rich people make money through a very different ideology followed by the masses.

In this post, we will discuss the key tenants taught by Rich Dad to become wealthy far quicker than the average person.

Make a Decision

The path to accumulating wealth is daunting and this reality deters many people from following it.

Like any difficult goal a person sets out to achieve, you must first begin with a strong reason for pursuing the goal. This reason or vision will be what pushes you onward in the inevitable moments of doubt and failure.

A good place to start is with a list of things that you do not want for your future. For example, Robert mentions not wanting to work for the remainder of his life, not wanting to be an employee, or even a regular old house in the suburbs.

Once you get clear on what you do not want in life, then you can get clear on what you do want in life. Be afraid of what happens if what you do not want becomes your reality, and use that as motivation to pursue your financial freedom.

If you are reading this post, it’s likely that part of what you desire is freedom. Freedom of time and the ability to use your time for things that excite you and make you feel alive.

Rich, poor, or middle class? Choose.

The next step is to analyze your daily habits and daily habits and determine if they are really moving you towards your financial goals.

Robert mentions that each day we make the decision to either be rich, middle class, or poor. It is all a result of how we view our money and how we choose to spend our money.

Rich people have a desire to become rich and they nurture it. Others, on the other hand, tell themselves that they don’t want to be rich and convince themselves that they’re not interested in money. In doing so, these people miss out on valuable opportunities that can change their lives.

You must invest in learning and be constantly improving your financial literacy. By doing this, you are already putting yourself ahead of the vast majority of the population who are completely financially illiterate.

Purchase financial literacy books and attend seminars that you believe will teach you skills that will raise your income. Build on these skills and make them habits.

As you do so, remember that building your empire will take time, but in the end, will be well worth it.

The Rich Don’t Work for Money

Lastly, this is the most important piece of advice that Rich Dad had to offer: The Rich Don’t Work For Money.

Rich Dad teaches that the only path to financial freedom is through a thorough understanding of the difference between an asset and a liability.

In simple terms, a liability is something that takes money out of your pocket, while an asset is something that puts money in your pocket.

Poor and middle-class people only buy liabilities, and because of this, they remain stuck in the rat race and find that they’re never really able to get ahead.

On the other hand, rich people buy assets and are able to accumulate and compound wealth much quicker than the other two groups.

Once you are able to learn what the difference between an asset and a liability is and learn to buy assets, then you’re really off to the races.

An example of how a rich person vs how a poor or middle class operates is shown in the following example.

Jack and Harold both receive a paycheck from their company. Jack immediately goes out and gets a brand new car and in doing so, takes on a monthly payment.

Alternatively, Harold decides to save up his money for a downpayment on a rental property that gives him a monthly cash flow of $450 and appreciates at a rate of 3.8% per year.

After some years, Jack has nothing to show for his purchase, but a used car that has lost half its value. While on the other hand, Harold has had his tenants pay off his mortgage, increased his cash flow to $700/month, and is now looking to sell the original property for $80,000.

Harold repeats the same process and after a few more years, his rental income has completely replaced his monthly income from his job. Jack, however, is still paying his car note and wonders why he can’t get ahead.

Who do you think will exit the rat race faster? Simple, the guy who knew the difference between an asset and a liability.

Don’t be Jack, use your money wisely and you’ll be out of the rat race before you know it.

Conclusion

This is just a brief summary of the book Rich Dad Poor Dad, by Robert Kiyosaki and we highly recommend that you go and read it yourself because there’s a lot of other gems in there that will help you on your financial journey.

It is your job in your journey to becoming a High Value Man to educate yourself and obtain financial literacy.

In the next weeks, we will continue to discuss the topics mentioned in Robert’s book. Subscribe to become a member of the club if you have any questions or would like to learn more. Also, follow us on Instagram for motivational content.