Becoming a financial success requires meticulous financial planning and sticking to the plan. Robert T. Kiyosaki wrote a book called, Rich Dad’s Guide to Investing with extensive knowledge on the subject.
Not many people I know have this level of investing knowledge so his book is a great guide. He will guide and help you understand the essence of investing and different types of investors.
He’s one of the best experts on the subject of money and how to become financially free. Him and his wife Kim Kiyosaki established the Rich Dad company, a financial education organization to educate the masses worldwide.
The following are 10 memorable quotes from Rich Dad’s Guide to Investing:
1. “In order to be a good investor, you first need to be good at business.”
Understanding business is essential to successful investing, especially the fundamental aspects such as the financials. One of the ways to become a good investor is learning how to analyze financial statements and the key ratios.
Financial statements give you an idea of the overall health of a business. Being involved in building a business however is the best way of learning the intricacies about building a business.
2. “One of the reasons so few people become rich is that they become set in one way of thinking. They think there is only one way to think or do something.”
I read a book by John C. Maxwell recently titled, “How Successful People Think,” which had many valuable lessons. To expand your thinking capacity it’s a good idea to expose yourself to people that think differently from you. Shared thinking helps you come up with more options.
The more options you have at your disposal, the better the chances of becoming rich. That’s why having a good circle of friends is necessary to create long-term wealth.
3. “The only reason you build a business is so that your business can buy your assets.”
Wealthy people have assets that generate income for them while most people earn their money through employment. They purchase the big investments through their businesses and not as individuals partly to protect themselves. It’s a smarter way of creating wealth.
The more assets you acquire the wealthier you become. Most people buy liabilities thinking they are assets which is why financial education is important. Learning the difference between the two is critical to prosper financially.
4. “You cannot change your outside reality until you first change your inside reality about money.”
The Bible says as a man thinks in his heart, so is he which also applies to money. Some people are good at their professions and can easily command high fees but struggle to in some cases. What I’ve realized is that they may not feel worthy of charging what they deserve and shortchange themselves.
By shifting your mindset and believing that you deserve to get paid what you’re worth, can change your life. Different people have different beliefs about money which is what you must examine at a personal level.
5. “People who are creative, cooperative, and have good financial and business skills often have lives of increasing financial abundance.”
In terms of making money, competitive people prioritize being first or the best but it’s not always the best approach. This is the mentality of employees wanting to get ahead of others to achieve their personal objectives.
Wealthy people are more cooperative in that instead of trying to beat others, they look for synergies. They understand that if they set up win-win situations, they’ll make more money than trying outdo others.
6. “The problem with being young is that you don’t know what it feels like to be old. If you knew what being old felt like, you would plan your financial life differently.”
Being old might be a relative term and could relate to any particular age range. However, at each stage of life the older you grow, you begin to realize the importance of financial planning. It’s not uncommon to hear people saying they wish they had made certain financial decisions when they were younger.
Having a trusted mentor can certainly help you understand why it’s important to plan better at a young age. The decisions you make today will affect you tomorrow, either positively or negatively.
7. “Investing is simply a plan, made up of formulas and strategies, a system for getting rich—almost guaranteed.”
Investing isn’t as complicated as it might appear to most people. Some people confuse investing with trading which are quite different. Investing is for the purpose of creating long term wealth while trading is usually for quick returns.
With the help of a good financial expert you can come up with an investment plan to create generational wealth. What most people lack is the discipline and patience to execute the plan because they want instant gratification.
8. “Regardless of whether you work for someone else or for yourself, if you want to be rich, you’ve got to mind your own business.”
The world we live in has many opportunities for everyone to become wealthy especially with the power of the internet. Holding a job alone won’t make you rich even if you might be getting a decent paycheck. Wealth is measured in how long you can survive without going to work or receiving earned income.
While you hold a job, it’s a good idea to start building a business in your spare time. It will give you the opportunity to learn how to build a business; and with the help of a mentor you can achieve more.
9. “If you want to be rich, you will need all three plans—a plan to be secure, a plan to be comfortable, and a plan to be rich.”
In working towards wealth creation, you must first take care of the basics such as good health and shelter. The plan to be comfortable is for the finer things in life such as going on holiday once a year; it’s not everyone that can do that and a lot of people stop at this level.
Most people are happy living a comfortable life and are content staying at that level. A minority of people tend to go all the way to becoming rich which requires extra time and effort.
10. “The moment you begin to think of time as precious and that it has a price, the richer you will become.”
Time once lost can never be recovered and that’s why you must make good use of it. When you’re younger it’s hard to comprehend the importance of it until you get older. Rich people understand the value of time and use it to do what needs to be done daily to get ahead.
They are motivated by well-planned goals and realize that every second counts in making their dreams a reality. Maybe that’s why the Bible says that, where there is no vision the people perish. Without a burning vision about anything, time just passes by and you never realize the opportunities missed.
Rich Dad’s Guide to Investing is a must-read if you want to know more about the subject.