Lessons From Rich Dad Poor Dad

Jan Jones
November 10, 2023

Part 2:   A CloserLook at Lesson 3, Minding Your Own Business

The book Rich Dad Poor Dad by Robert T. Kiyosaki with Sharon L.Lechter shares six lessons the author learned from his rich dad about money.The third lesson, Minding Your Own Business, was worthy of further examinationbecause of the high importance Kiyosaki places on knowing what a true asset is.

He states:

Rule 1: You must know the difference between assets and liability andbuy assets. This is really all you need to know to be rich.  Most people do not know the difference.

Today I would like to examine Kiyosaki’s thoughts about

·       Why a house is not considered a true asset

·       Examples of true assets

Mostpeople mistakenly believe their house is an asset

An asset has a cash flow of income. A liability has a cash flow out inexpenses: payment, maintenance, taxes. Even if you buy your house with cash, itstill has an outward cash flow.

Examples of True Assets:

·        Businesses that do not require your presence.

o  If you are working in the business, it is a job, notpassive income

o  This requires hiring highly capable and trustworthy managers


·        Stocks

o   Buying stock in acompany is buying a piece of the company

o  Do your homework- learn all you can and seek wise mentors

o  Check out this article and video:

§  investing instocks for beginners

§ Warren Buffet’s 6Rules Of Investing - YouTube


·        Bonds

o   Bonds are loansyou make to a company or a government and are considered safer than stocks

o   Check out thisarticle:    How to buy bonds


·        Income generating real estate

o  Typically, are rentals whether homes, apartments,commercial properties, storage units, or event venues

o  This is the primary income for Kiyosaki. He says he buysproperties and trades up, making a profit on each sale.

o  Be realistic about the costs of owning rentals: insurance,maintenance, taxes, and tenant quality


·        Notes

o  A way to invest in real estate and provide monthly incomewithout the hassles of owning property

o   note investing 101


·        Royalties from intellectual property such as writing,patents, stock photography

o  This is where you need to inventory your gifts, talent,creativity!

o  Royalties are income earned every time another party usesyour assets, such as a song in a commercial, or for each book sold.

o  You can also purchase royalties that the owner has decidedto let go of through The Royalty Exchange. Check out this article: Make money throughroyalties


·        Anything else that has value and produces income orappreciates

o   Collections thatincrease in value


Other suggestions from Kiyosaki:

·        Buy assets you love – he loves buildings and land. Hetrades up and generally holds them for less than 7 years. If you love it, youwill have passion for it.

·        Once a dollar goes into an asset, never let it comeout-it is now your employee working for you.

·        A true luxury is a reward for an investment- he does not buya luxury item until an asset has provided the income to pay for it. Thiseliminates buyer’s remorse and/or guilt, and he truly enjoys the item more.

·        He says “wealth” is being able to generate enoughmonthly income to pay for your monthly expenses. If you want to increase your expenses, youthen increase your cash flow from your assets.

Hopefully you have seen something in this list of true assets that sparkedyour interest, and you are inspired to learn more about it. The sooner youstart building your assets, the better, my friend!

-Jan Jones