I'd had a teacher at university who was interested in personal finance and who claimed that work accounted for about 60% of his income at that time and that he intended continuing to structure his life so that he didn't have to rely on a job. Well of course that got me interested, and the first book I found that seemed relevant was:
Rich Dad Poor Dad: What the Rich Teach Their Kids About Money-That the Poor and the Middle Class Do Not!
It's a great book and a terrible book all at once. Most of the ideas weren't new and the stories that hold the ideas in to place are sometimes difficult to believe. But the way the ideas are put together and the story that is created in Rich Dad, Poor Dad is enough to keep you interested and get the teaching across.
There are a lot of key teaching points in the book, relating to money, investing, assets, liabilities, etc. and along with a few other ideas they'll be the topic for this week.
One of the key points for me was the difference between assets and liabilities - it was something that had never been explained to me before, either in traditional terms or in the way Robert presents the information. So I had no problem accepting his ideas. I enjoyed the way the information was presented, alongside diagrams which, while really simplistic, emphasised the teaching.
In essence, he defines an asset as something which puts money in your pocket; A liability as something which takes money out of your pocket; and a rich person (or someone becoming richer) as one who knows the difference, and buys assets.
As I say, these things hadn't been explained before and I could clearly see the sense. If you want to get rich - buy or create things which put money in your pocket.
So that's the message for today. Seems obvious, but still seems overlooked by a lot of people.
Next blog - the fun really starts... The Rich don't work for money and the first exercise you can do for yourself.
Here's to your success!
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