In the first book Robert introduces himself as a son of middle class school teacher in Hawaii, then he sets out to learn how to get rich with his friend Mike from Mike's father, whom he calls as rich dad. The book contains everything which Rich Dad had thought him and also his own personal experiences. After the success of his first book he released a set of books related to personal and commercial wealth creation and management. The following principles are all taken from his books,
Do not work for money, make it work for you
This sounded strange to me when I first read it, but after I understood it sounded very practical. He says the rich do not work for money, they invest their money on their workers who work for them, he meant the harder the worker's work the richer the owner gets. But he does say its good to work for things other than money, such as experience, knowledge or sometimes just for the sake of it, even he worked for the Xerox Corp to gain experience and knowledge on marketing and sales, but he never worked their for money.
He says people today are slaves to money, and that too sounds practical as today people do anything for money and listen to it when it says them to work their ass off. The policies of working hard for money were of the past, today hard work doesn't determine how rich or poor a person is. In the Industrial Age people worked hard to get rich and that was the only way to get rich, but this is the information age, but still people aren't adapted to it.
Currently I'm working hard to build this blog, but you see I am not working hard for money, as I have not yet monetized this site, but I will leave this blog once I get enough traffic and money and hire someone to blog for me. Most of the bloggers these days work hard even though they have no one to boss on them, this is because they haven't grown their blogs to live without them, no matter how hard they try they can't go on a holiday without their blogs.
Win with honor lose without shame
Robert started his first business the Nylon and Velcro Wallets, which had huge success in the beginning, but eventually went bankrupt, but Robert didn't get discouraged, he made plans for many other companies and invested in many of them. In one of his books he gives an example of the people of Texas and their tragic military defeat in the war of Alamo. He say's :
I like Texas and Texans. In Texas, everything is bigger. When Texans win, they win big. And when they lose, it's spectacular.In that war the Texans fought bravely even though they knew their was no chance of victory, and they got their butts kicked, but today Texas makes billions every month from the debris of the war as it has become a famous tourist attraction. Texans don't bury their elders, instead they take inspiration from them.
Its been around almost a year since I started to blog, till now I haven't made more than $200 a month, and my marks in school has deteriorated steadily, but I know that someday I will make a living from blogging, these kinds of stories inspire me to continue working hard, while trying to change failures into successes.
Money is an idea
This was one of the most confusing principles I've learnt from his books, I've still not understood this properly. This was told to Robert by his rich when he was young, but even he didn't understand that until he grew up. It actually means that money is represented artificially on paper and coins, but actually money can be anything you want it to be.
I know that the above explanation was not very clear, but those are somethings that influence you everyday, but you'll need to get deep into commerce and law to recognize that.
Money is an idea and what its represented as can be called as wealth, so rich people make more money and represent it as wealth, these transactions of money and wealth are binded with many theories and laws, which make them invisible for us.
You don't need money to make money
When Robert told people to make their money work hard for them, instead of the other way, he got replies asking him, whose going to give them money to make it work hard. Robert replied in his next book telling people that in the information age, you don't need money to make money, he says the same thing that money is just an idea and if you have the idea other people will give you money. I couldn't understand that back then, but i did understand it when I started to know about investments and capital markets. In the industrial you had to make use of only your money, but this is the information age, and now people have to make use of others money to get rich.
Good debt and bad debt
While the rest of the world concentrates on reducing debt, Robert says that he keeps getting into more and more debt and never concentrates on reducing it. He says if he had bad debt he would be worried about it, but if gets into debt by creating or acquiring an asset he wouldn't be worried, as the income he gets from his newly acquired asset would repay the debt. He gave an example on this and let me tell you in his own words:
Just say I have more than $300,000 to invest and i find a house worth $300,000 for sale then I would invest $30,000 on it as a down payment and the rest is borrowed from a bank, now I have $270,000 more left to invest on other properties and stocks and the house I bought gives me a rental income of $3000 a month and I pay $1000 every month as an installment to the loan I had taken, so I have $2000 of income and more money to invest.
By doing this Robert has built a huge business empire, and everytime his net worth grows, his debt also increases. As a blogger its really not a common practice to borrow money for your blog, but today your blog is no less than a business, besides you can grow your blog faster and get richer if you get some money to invest. I believe that its always easier if you have some money to invest than sitting and working your ass off by promoting your blog.
Savers are losers
If you take our parents or grand-parents, their main goal in life was to graduate with good grades, find a secure job and save for their retirement. Even when they wanted to buy a house or go for shopping they hesitated to use borrowed, they would usually save the money and buy a house instead. Well, that was right at their times, but even today, people plan for saving money to invest, though people use their credit cards for shopping, funding an investment is usually the same old traditional way.
There are still many people who feel investing is risky and tend keep money in banks and use their interest returns.
Most of the bloggers do not invest their own money and even if they do its going to be very small. This is because of their mentality to save money and use it, if some comes and invests a huge set of money and starts promoting his blog, he will definitely be ahead in the race, making you a loser.
Money can't give happiness
In the end of his first book, Robert tells us that money doesn't make one happy. Money can give you power, freedom and fame, but its something that gives you happiness. He told that being rich he had the freedom to do whatever he wants and spend time on any project which interests him, money gave him power and also fame when he got many media coverages, but he tells that he got happiness from somewhere else. This is something true, in my life I've seen many happy middle class people, but sad rich and high class people. I totally agree that money has no connections with happiness, but before I felt most of the problems and sadness comes only when there is lack of money.