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Thoughts from "Rich Dad Poor Dad" Part 2

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

#1: Saving

"It's not about how much you make. It's about how much you keep"

I greatly appreciate this statement because a person can make 6 figures or more and be broke. We see this with celebrities, professional athletes and the like. They spend all of their money and it catches up to them. Or, should I say that it catches up to us.

Living paycheck to paycheck can pose limitations on how much money we keep. Having outstanding debt, will impact how much we are able to keep; if we're able to keep any at all. One can conclude that the money you keep determines your financial class.

#2: Assets and Liabilities

"Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets." "Assets put money in pocket, liabilities take money out"

When I entered into adulthood, I did not know the difference between assets and liabilities because I had never heard of their concepts. Did you know that mortgages, credit cards, consumer loans, student loans and auto loans are liabilities? Yes, if you're making payments on a house or car, they are not assets. They can be considered an asset once they're paid off. Along with a home, stocks, bonds, and types of intellectual property can be assets.

In the times we live in, it's possible for the poor and low-income earners to obtain some stocks with investment apps that allow you to invest your change. There are more options now that there were before. The big takeaway, we all need to understand that we are encouraged to "invest" in liabilities. This keeps us in the cycle of poverty or low- income because we keep taking money out of our pockets, and not keeping any of it in return.

#3: Change Our Habits

"The rich buy assets, the poor only have expenses and the middle class buy liabilities they think are assets"

Let that sink in for a moment. This is the general pattern of the financial classes. Even so, there are ways to work yourself up and down the ladder. When I was poor, I sought ways to eliminate or decrease my expenses. As a middle class individual, I am guilty of buying liabilities thinking they were assets. I know the difference now. This statement was insightful and encouraged me to change my financial habits. I hope it does the same for you.

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