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Thoughts From "Rich Dad Poor Dad" Part 4

Updated: Jan 26, 2023

This is part one of a series of notes and commentary based on insights from Rich Dad Poor Dad by Robert T, Kiyosaki.


#1: Where the Power Lies

If you work for money, you give power to the employer. If money works for you, you keep it and control the power.

This statement reminds me of perspectives. I feel it's rather subjective. Is it possible to work for an employer and not give the employer power? Granted, they can always fire someone and that same someone could always quit. Most employments are "at will" of the employer or employee. One could say, that the employee has more power of the money. They decide if they will go in to work, and trade in hours for a specified wage.


On the other hand, you can have your money work for you and end up with nothing to control. For example, investing has high rate of returns, but it comes with risks. There have been people who invested in cryptocurrency and made millions, and now we're reading about how they lost out. This is an extreme example. Please don't read to much into it.


Is there a clear distinction on where the power lies? Financial experts will tell you yes. Should we adhere them? Well, if we want to. Where do you think a person is in more control of their money?




#2: Patterns

Business owners: own -> spend -> pay taxes
Employees: earn -> pay taxes -> spend

What are your first thoughts after looking at this? Owners spend money to grow their business and brand(s), then they can write off their expenses. Employees, don't have that luxury. Taxes come out first, and we're stuck with what's left over. Many of us get frustrated when looking at a paystub and noting that there is a $300+ difference between the gross and net pay. We've all been there right?


Did this make you think about starting a business? Owning a business has its benefits, and it can be demanding. Did you know that any time you engage is a transaction (sell some shoes on eBay, sell dinner plates from your home, yard sale etc. ) you're technically considered a sole proprietor. A sole proprietor is another term for being self- employed. By being self- employed, you can write off some expenses as well. You might be an business owner after all.


Be careful, legal requirements on being self employed vary by state. I'd recommend that you look into it accordingly.


 

As far as power and patterns go, it's easy to blur the lines. What do you think?

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