Dollars and Hops

034 | Winning Mindsets - Rich Dad Poor Dad | NEW Budget Hack | "Do I Need Umbrella Insurance?"

Listen Later

Intro: Today is a winning mindsets episode - we’re going to be discussing some of the concepts taught in a world famous book called Rich Dad Poor Dad by Robert Kiyosaki.

Book came out in 1997 - concepts are timeless 25 years later.  He really forces people to think differently about money and Lance and I wanted to discuss some of the concepts taught in this book with you, our listeners today.


Book is about Robert’s 2 fathers growing up - and how they taught him to think about money.

  • Real (poor) dad - was a teacher
  • Father of his best friend (rich dad)

    • Lots of background to this story - but there are some key takeaways (6) from the book that we feel are super important:

    1. The rich don’t work for money: The Poor and middle class work for money.  The rich have money to work for them.

      2.           -What is meant by this?

        Rich buy assets that generate income for them.

      Assets: Stocks, Real Estate, Businesses

      These assets generate money for them - sometimes actively, sometimes passively.

      Rich people will dedicate their time and energy to acquiring as many assets as they can - so that their money is working for them.  Eventually their money works for them, they don’t work for money.

           2. Why teach financial literacy (Cash flow of rich vs poor)

      Run through cash flow of poor/middle class

      Work at job - money goes towards expenses

      Expenses: taxes, food, rent/mortgage, clothes, fun, transportation

      Run through the cash flow of a rich person

      Assets that they own generate income

      Takeaway: You need to buy assets that generate income ASAP to get ahead.  Those can be businesses, stocks, real estate, etc….

           3. Mind your own business

      People that go to school for law become lawyers

      People that go to school to study cooking become chefs

      People confuse their profession with their business

      Their business is not where they work, it has to do with what’s in their asset column.  These are things generating income:

      Businesses that don’t require my presence

      1. Stocks
      2. Bonds
      3. Mutual funds/etfs
      4. Income generating real estate
      5. Royalties from intellectual property such as music/patents
      6. Anything else that has value and produces income and appreciates and has a ready market.

        7. Another interesting concept in the “mind your own business” chapter is that robert says most people should not start their own business.  They should work a job and mind their business.  And when they start putting money into their business - don’t take any money out… let it compound upon itself.  That’s how the rich get richer.

             4. The history of taxes and the power of corporations

        1. In summary - Robert is trying to convey how important it is to understand the tax code.  People that do own businesses have the ability to take advantage of writing off a lot of their everyday expenses.
          1. Cell Phone
          2. Internet
          3. Car expenses / Mileage
          4. Office supplies
          5. Educational Courses
          6. Professional services fees (accountant / lawyer)

            7. When you own a corporation you earn, spend, then pay taxes

            When you work for corporations - you earn, pay taxes, then spend

            Big difference is that you’re paying tax on what's leftover after expenses when you’re a business.

                 5. 

            ...more
            View all episodesView all episodes
            Download on the App Store
            Dollars and HopsBy Dollars and Hops
            • 5
            • 5
            • 5
            • 5
            • 5

            5

            22 ratings