In this post (and subsequent ones, if there's interest), I'll try to summarise the key lessons of Kiyosaki's guide on how to go from being poor and/or struggling financially to financially independent and rich.

Rather than teach each lesson as a stand-alone concept, Kiyosaki takes an iterative approach. For this reason, I've split this into multiple parts.

As per usual, the standard disclaimer about this not being financial advice applies here. Kiyosaki's lessons are not meant to be taken as definitive answers, as gospel, but as guidelines and suggestions. It's a philosophy more than it is advice. Either you take it in and accept it, or you reject it at your peril. Proceed at your own risk. Your mileage may vary.

The Viewpoints of the Rich and the Poor

The rich man is not necessarily rich yet, just as the poor man is not necessarily poor yet. It's not about how much money you have or earn; it's about how you manage and think about money (behaviour and mindset). To grow rich, you have to think and believe that you will. Thinking that you'll always be poor means that you get in the way of what you can achieve and thus ensure that you will be.

The love of money may be the root of all evil and money can't buy you happiness, but a distinct shortage of it won't buy you very much. "Broke" is a temporary condition, but "poor" is a mindset for a lifetime. The avoidance of money is just as much a psychosis as being overly attached to it.

It's easier to reject someone's advice/viewpoint as nonsense, or accept it without question, than it is to think about it and see things from a different perspective, to form some understanding. When offered two or more contrasting/contradictory viewpoints, it's harder to decide which one is more applicable than when only presented with one. Growing up, the latter is the situation in which Robert Kiyosaki found himself, with two strong father figures in his life (the rich dad and the poor dad).

Poor people think "I cannot afford it", which is a cop-out, an excuse. Poor people give up on their dreams and, in so doing, are crueler to themselves than any boss will ever be. Rich people pursue their passions, no matter how difficult the journey and far-off the destination.

The rich think of ways that will enable them to afford what they want. The rich ask, "How can I afford it?" This stimulates a thought process that may lead to a plan and taking action.

It is important to recognise that the latter approach is not a justification for purchasing everything you desire (because desire always far outstrips means), but is a vital exercise for keeping your mind active and problem-solving. Using your brain is vital to making money. (It certainly has been in my case.)

It is important to realise that positive thinking alone will not work. Education, knowledge and understanding, is also required.

Pay your bills first, not last. That way, you know how much you have to allocate to other things and you won't be left scrounging for the money you need for payments, won't get yourself deep(er) into debt.

"Two roads diverged in a wood, and I —
I took the one less traveled by,
And that has made all the difference."
 — Robert Frost; The Road Not Taken

Lesson 1: The Rich Don't work for Money; Money Works for Them

The rich teach their children to understand how money works and how to make it work for them. Only the poor and middle-class work for money.

Money is a form of power. As such, it corrupts if one does not learn how to control and manage it.

Having a job is a short-term solution to a long-term problem (the fear of not having enough money). While it's important to have a job and money, they don't solve the problem. Learn not to be afraid of money, particularly the lack thereof. Learn to master it and the power it gives you.

Lesson 2: School Doesn't Teach You Financial Literacy, or to Problem-Solve

One of the reasons that the rich get richer, the poor get poorer and the people in the middle struggle is that matters of finance and money are taught at home, not at school. Schools do not teach financial skills; they teach skills needed for professions. What most people learn about money (rightly or wrongly) comes from their parents. Thus, fearful people will teach their children to be fearful and poor people will unwittingly teach their children how to be poor.

Life teaches you lessons by pushing you around, by throwing problems at you. It doesn't talk to you or lecture you, like school does. School doesn't teach you how to solve these problems; you have to figure them out on your own. Those who learn how to do this grow wealthy and wise. Those who don't will give up and blame their families, their partners, their bosses, their leaders, their jobs, and so on. They live in hope that their ship will come in, but it never does because they're never at the helm to steer it. They play it safe, live and die die boring instead of windswept and interesting. They never win anything, because they are too afraid of losing. Being driven by fear gets you nowhere good.

The problem is not the other people in your life, whom you cannot change. The problem is you, whom you can change. That is how you learn and grow. It takes energy, desire and passion.

School teaches you the skills you need for a profession. It teaches you to work for money, to follow instructions given to you by others, but not how to think for yourself, which is what rich people do. It's easier to do the former than the latter (and many people opt for the easy route). People let themselves become enslaved to money. They get angry at their jobs, their bosses, their wages, external things beyond their control. Instead, they should direct their anger at themselves, use it to direct them to learning what they need to in order to change.

Most people's education ends when they leave school. Learning about money is a life-long pursuit, one in which the more one learns, the more one needs to know.

Lesson 3: Mind Your Own Business

You will never be rich so long as you work for someone else. You might, however, become rich if you find a good company to buy or in which to invest and manage it well.

Do not expect the company for which you work, or your government, to take care of you (retirement plans, medical benefits, sick leave, etc.); that's your responsibility. Aim to be financially independent, not needy or reliant on others.

Job security and a decent pension are illusions employers dangle in front of employees like carrots in front of a donkey. (We just chase after bigger and more varied carrots: A new car, a boat, a bigger house, etc.) It's a trap that most people don't see. Being smart with your money means you don't have to rely on someone else to manage them for you and thus worry about them.

Do not let your emotions (particularly fear and greed) overrule your brain, your logic, lead you into taking a bad/raw deal. Do not let yourself be bought. Do not be afraid of being without money. Think logically. Observe and respond calmly, instead of reacting. Money will not soothe your fears, nor slake your desires, no matter how much of it you have. It will ruin your life, if you let it.

Lesson 4: Of Taxes and Corporations

Thinking that the rich should pay more taxes is feeble-minded. It's impractical, because the rich don't pay much, if any, tax (and there are legal loopholes they exploit). Taxes do not benefit society as a whole. They benefit the bureaucrats and leeches (and I don't mean the people on benefits). They punish those who are productive and reward those who are not.

Those who pay taxes, have deductions on their wages, will never get 100% of what they've earned. If you're poor, you're taxed when you earn, when you spend, when you save, when you die. The rich don't allow this to happen to them.

Yet, it is not the government or the economy that causes financial struggle and poverty; it is self-inflicted fear, ignorance and greed that people use against themselves.

Lesson 5: The Rich Invent Money

This lesson is not covered in Part 1. That comes later.

Lesson 6: Work to Learn, Not for Money

Those who ask for a job and a paycheck will never learn about money and how to make it. They don't understand for what they are working. They are driven by fear and greed, which allows them little time for thinking clearly.

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