Mind your own business
Recently finished the book Rich Dad Poor Dad by Robert Kiyosaki. Some thoughts popped into my head that I would like to share and discuss.
Rich Dad Poor Dad
by Robert Kiyosaki
For those who have not read it, I would recommend go and pick it up from the top shelf in the Business section in any bookstore - after all it has been quoted as the first best-selling book of Personal Finance, although it would definitely not be my random choice given how aesthetically unappealing to me on first contact. I personally find this “quick money, easy access, five minutes telling you whole life ideas” too flashy, and I would much rather accompany myself with some more classics and long-lasting ideas. However, one of my Harvard Professor in Real Estate Investment, Teo Nicolais, to whom I pay high respect after a semester with him and two more to come, recommended this one, so I figured to pick it up and skim it through during the staycation holidays - keeping an open mind and see what makes up for its fame and loyal fans. The advises in the book are for the most part insightful, but should definitely be taken with a grain of salt.
A quick summary of the book. Two dads represent different views of money. Rich dad is the one who considers money as investment - "employing money to work for you" instead of "working for someone." Poor dad is the one who is highly educated but in a midst of financial struggles throughout his life. The book is about how to think like the rich. Rich dad values financial literacy, even though you have not gone really far with academic specialty. He is a big supporter of education, but condemns current education system making people much more specialized in the fields than cultivating financial literacy - the "right" perspective of money. Poor dad focuses on stretching academic careers, and values working for big company. The truth is, as hard as someone is working for someone else, his or her personal finance could still be an abysmal, if trapped in the Rat Race - earn more, spend more; bigger paycheck, bigger liabilities like mortgages, loans, and credit card debt.
Of course there are much more details and tactics in the book, while I will not turning this post into a book review, but discussing some of my thoughts now. I very much like some advises, such as "mind your own business," "work to learn - don't work for money," "acquiring assets than liabilities," and to distinguish assets from liabilities on the basis of income generating abilities etc. This coincides with my perspectives of money, career, and business. I am treating myself as a business entity, and "operating" in a way that really maximizes my own wealth in the long term. By wealth, I mean in terms of net worth, not just monthly income, but assets minus liabilities. Jump outside of the box and lift the narrow focus of a particular income stream onto the bigger picture - how much assets you are acquiring, what are their income generating abilities, and whether you make good deals in acquisition. Hone your skill to really distinguish assets vs. liabilities, because a lot of times people are not precisely defined in talking about assets. Sometimes they recognize the Club Monaco as an asset, but in reality what it really requires is dry cleaning fees and depreciation than generating cash flows, i.e. liabilities than cash flows.
Assets vs. Liabilities
Source: Rich Dad
For career, regardless the type of job, the main focus point should be for learning experiences than negotiating a salary that makes you extra 10 bucks today, if focusing on your own business and aiming at building assets. I am not against salary negotiation, but what I am arguing for is to look at the bigger picture - how will experiences today sharpen your business acumens tomorrow when in charge of capitals. In other words, experiences in early stages of life should accumulate knowledge and practices to help manage your own businesses and cash flows, later when bulking up. Admittedly, I found myself once trapped into the mindset that I should ask for $20K more today given x, y, z. However, ask myself the important questions - do I see myself working for this position, this company, and even just the idea of working for someone in next 5, 10, or longer years? It helps me clear my head and sets the right mindset to keep going extra miles in work right now, and accomplish building blocks for what is yet to come. In short, either going higher up on the corporate ladder, or aiming at bulking up and being an individual investor, treat yourself as a business entity, mind your own business, and focus on what matters.
Source: Unsplash
Going back to the book, nevertheless, one should keep critical mind when listening to his advises, or any advise. Robert is a guy that sells personal finance advises as his main revenue for Rich Dad Company; there are definite valuable thoughts and insights, while some words are, in my opinion, too appealing to average audiences, mostly "alluding" to believe that making money is easy. While there are people seemingly making money easily - like Kardashian’s living and streaming their lives, it does take efforts to master the businesses you are in. A instagram influencer keeps up with daily post so as to constantly flush the feeds and keep presence and hashtags, a YouTuber delivers better contents with sharper editing to keep the viewership, a sales guy does a pitch passionately or pretending-to-be - these are all seemingly effortless efforts regardless recognition. I very much agree with Teo's point of view, that understandings are there but the realization of money making needs blood and sweat. For example, the market cycle quadrant in my last post is no secret. It has been written and presented for years. However, how many people who are aware have actually stepped up putting into practices, by gathering data and analyzing to understand a market of interest?
Making money can be easy, once you are feet on the ground and hands in the dirt; making money can be extremely tough, if you naively believe it is just an easy gig. Get understanding by education, practices, and networking, be inspired, and work for bulking up your assets. Understand your risk tolerance, the market mechanisms, and invest to your benefits. Treat yourself as a business entity, and be your own boss.
Source: Unsplash
