Rich Dad, Poor Dad: An Application
Discussing career paths and our future plans, my friend Jans suggested reading this book about financial literacy. Easy to understand and simply written, it gives “guideposts” rather than fixed answers to the question “How can I develop wealth?” One of the important points is: More money is not the answer to most financial problems. There are rich people who only fear more. They work harder and become greedy, fearing to lose what they have. Also, the idea of a rat race illustrates how one’s spending keeps up with an increase in income: More taxes, more shopping, and greater temptation to increase liabilities rather than assets. Here are the rest of the key points:
1. Money without financial intelligence is money gone soon.
2. The poor and middle class buy luxuries first. The rich buy them last.
3. Schools train us to be good employees but not good employers.
4. Mind your own business. This means don’t spend most of your life working to make somebody else richer. Start a business that wouldn’t require your physical presence.
5. Don’t work for money. Let money work for you.
6. A liability is something that takes money out of your pocket. An asset brings money to your pocket. Most people fall into the dangerous notion that their house is their most important asset.
7. A good measure of wealth is asking yourself: If I quit my job now, how long can I survive?
8. Being broke is temporary. Being poor is eternal. The fear to take risks (like investing) is rooted in a lack of financial knowledge.
9. Instead of saying “I can’t afford it,” say “How can I afford it?”
I don’t claim to be ready to start a business myself. Nor did I start to invest in mutual funds. I still count myself as among those who need to work for a company on a day-to-day basis to sustain my needs. But this book certainly helps in overcoming short-sightedness. I am also proud in being able to exercise self-control and keep expenses at the minimum. When receiving the pay check, set something aside first and then spend from there. Friends also say that it would be better to buy stocks rather than just keep savings in the bank – because inflation would surely overtake your money’s growth. I would still need expert advice, but I strongly feel that I’m on the right track, equipped with a good habit of saving no matter how little each week. Instead of buying a car or a house too soon, the book also advises to build a strong financial foundation first. Generate a cash flow that would make your money grow enough to cover your expenses.
What should not be missed here is this: When you are financially secure, you have more time to pursue self-fulfilment. Money is definitely not the end in itself but it gives you power. Having mentioned TIME, it is for me the more important resource. Being able to use it to follow your heart’s desires (and I mean it not just in the materialistic sense) gives you a great feeling. Absolutely better than being a slave to your pay check.
It’s not about depriving yourself of life’s pleasures such as buying the latest gadgets, eating a pricey breakfast with friends, or impulsively buying two pairs of shoes in a day. What I’m saying is that YOLO comes with responsibility for your actions and not doing things you’d regret. Here are examples:
These may be funny examples but you may have already encountered these people. It is not much about starting poor or starting rich. What’s important is to develop that good saving and spending pattern today.
1. Money without financial intelligence is money gone soon.
2. The poor and middle class buy luxuries first. The rich buy them last.
3. Schools train us to be good employees but not good employers.
4. Mind your own business. This means don’t spend most of your life working to make somebody else richer. Start a business that wouldn’t require your physical presence.
5. Don’t work for money. Let money work for you.
6. A liability is something that takes money out of your pocket. An asset brings money to your pocket. Most people fall into the dangerous notion that their house is their most important asset.
7. A good measure of wealth is asking yourself: If I quit my job now, how long can I survive?
8. Being broke is temporary. Being poor is eternal. The fear to take risks (like investing) is rooted in a lack of financial knowledge.
9. Instead of saying “I can’t afford it,” say “How can I afford it?”
I don’t claim to be ready to start a business myself. Nor did I start to invest in mutual funds. I still count myself as among those who need to work for a company on a day-to-day basis to sustain my needs. But this book certainly helps in overcoming short-sightedness. I am also proud in being able to exercise self-control and keep expenses at the minimum. When receiving the pay check, set something aside first and then spend from there. Friends also say that it would be better to buy stocks rather than just keep savings in the bank – because inflation would surely overtake your money’s growth. I would still need expert advice, but I strongly feel that I’m on the right track, equipped with a good habit of saving no matter how little each week. Instead of buying a car or a house too soon, the book also advises to build a strong financial foundation first. Generate a cash flow that would make your money grow enough to cover your expenses.
What should not be missed here is this: When you are financially secure, you have more time to pursue self-fulfilment. Money is definitely not the end in itself but it gives you power. Having mentioned TIME, it is for me the more important resource. Being able to use it to follow your heart’s desires (and I mean it not just in the materialistic sense) gives you a great feeling. Absolutely better than being a slave to your pay check.
It’s not about depriving yourself of life’s pleasures such as buying the latest gadgets, eating a pricey breakfast with friends, or impulsively buying two pairs of shoes in a day. What I’m saying is that YOLO comes with responsibility for your actions and not doing things you’d regret. Here are examples:
- Going to Starbucks frequently after the 15th then complaining “walang pamasahe” near the 30th.
- Having an iPhone without load.
- Carrying a designer wallet but without cash in it.
- Wearing branded high-heeled shoes and cannot run when the pinagkakautangan comes around!
These may be funny examples but you may have already encountered these people. It is not much about starting poor or starting rich. What’s important is to develop that good saving and spending pattern today.
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