Friday 6 June, 2008

Rich Dad Poor Dad

From the Book Shelf...

It's been over 2 years since i first came to know of this book. Since then, it's been a long wait to get a chance to get hold of a copy of it - however, it was worth the wait. I completed the book this morning and here goes my view on it.

'Rich Dad Poor Dad' is a must-read for those yearning to make it big financially in life [now, who doesn't want to ;-)]. The book shatters the basic principle - 'To Earn More, Work More'. The author Robert T. Kiyosaki, using his narrative style walks us through how we can make 'money work for us' rather than 'we working for money'. Though the methodologies they put forth aren't totally path-breaking [stocks, bonds, real estates], his approach on how to make the right use of the assets leaves us spell-bound with the tactical application of ideas and presence of mind or rather common sense.

The book talks a great deal about assets, liabilities, income and expense and how one impacts the other[what else will a finance book deal about?]. It also brings to light the advantages corporates enjoy over individuals in cutting down on taxes [corporates pay for expenses before taxing and hence are less taxed than individuals] and how individuals can emulate the same by starting their own businesses. The authors are strictly against [and i am not 100% OK with this] toiling out in a company; rather they fiddle with us the idea of running our own corporation - both to beat the tax men and also to have more ownership of the effort we put in ["I work for me"].

Throughout, the book is interspersed with a lot of real-life examples that help us correlate ideas better. The author has used the examples as an excellent means of talking about various perspectives of say, an idea. Hats off to the narrative style that Robert has incorporated!

To talk about the other side of the picture, most of the examples used especially the ones related to tax structures are more related to Uncle Sam and may not be applicable across countries. However, the message conveyed here is the reader should develop out-of-the-box thinking to combat their financial challenges. Also, some where down the line, i felt there was too much emphasis on saving money by "not so good means". If i am not wrong, during the course of the book, there were some narrations that roughly would mean we could go to any length to cut down on expense even if that would mean taking measures unappreciative of your employee union or in some cases the law itself! Though, Robert confesses that these are not by any means recommended, i felt there was an undercurrent through out the book that one who wanna be a millionaire shouldn't contemplate social responsibilities, at least early in their career.

Towards the end of the book, 10 steps to become successful [earn money or make money work for you] are enlisted. I have put down my "decoded" version of the same below:

1. Be optimistic and maintain high spirit towards your goal.
2. Invest in Education - that lays the foundation for any career that you aspire for.
3. Choose your friends - choose those who have a positive outlook on the world or the career you look forward to.
4. Learn things one at a time - Master one formula/idea. Then, move to the next.
5. Control your expenses - Don't spend unless until unavoidable [Be frugal, not miserly].
6. Pay well for those who work for you and are smart.
7. When you assist/help someone, look for the ROI[return on investment] on the same.
8. Invest in assets rather than luxuries. Assets will churn out luxuries in the long-term.
9. Have good role-models who can always be looked upon.
10. Teach others your skills - you learn more while you teach. Teach and you shall receive.

Main Management skills needed

1) Management of cash flow
2) Management of system (yourself and the environment you work with)
3) Management of people

Interesting quotes from the book

"What holds us back is not lack of technical information but lack of self confidence"

"Fear is the greatest distracter of personal genius"

"Fear and self-doubt is what holds us back"

"Sometimes You win, Sometimes You Learn"

"The poor and middle class work for money. The rich have money work for them."





Happy Reading!

~ Arun KK

All views presented above are of the blogger and hence reflect the blogger's view of the topic rather than what was intended by the author(s). Readers are advised to exercise their discretion and thereby treat the post as mere pointers!


No comments:

graysparks.blogspot.com