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  • In addition to my summary of Rich Dad, Poor Dad covering all 6 Lessons from the book,

  • I wanted to explain the concept of Assets and Liabilities in more detail.

  • Assets increase your wealth, while liabilities cost you money.

  • And Robert Kiyosaki concludes that what makes the rich richer and the poor poorer is that

  • the rich spend their money on assets, while the poor waste their money on liabilities,

  • which they think of as assets.

  • Let me give you an example.

  • A poor person, who's been sold a Bilzerian life-style as true happiness all their life,

  • might think, owning, driving and maintaining a Lamborghini is an asset.

  • Now, no one denies that they aren't fun, but all they do on the financial side of things

  • is cost you money, lots of it.

  • So, the shiny car, the newest smartphone and brand clothes and the great mansion with all

  • the playboy bunnies are a liability.

  • Haha, I know what you're thinking.

  • Those are some great liabilities to have, but only, and this is the point, if you got

  • a surplus in income.

  • A rich person might enjoy those liabilities, but they understand that what ensures their

  • crazy lifestyle is assets like owning a building, having cash on hand or on deposit, corporate

  • stock, equipment, inventory, mutual funds and even your own piggybank.

  • Whereas the middle class might try to live a similar lifestyle through mortgages, consumer

  • loans and credit cards.

  • The beautiful home, then, becomes a great liability, instead of an asset.

  • Most people work almost all their lives to pay off their home.

  • They've got expenses like maintenance, utilities and property tax.

  • Plus, the value of their house can depreciate over time.

  • For another example, let's look at the taxation system, which, as you surely know, affects

  • the middle- and upper middle class the most.

  • When you run an organization, which is a great asset to have, if it makes lots of profit,

  • one of the things maximizing your earnings is, that you are allowed by regulations to

  • first spend on your expenses and pay your taxes after deduction.

  • Wheareas people without assets are taxed on more than half of what they earn and spend.

  • I've mentioned "making the system work for you" in former videos.

  • Robert Kiyosaki's version of that is "making money work for you."

  • And you can start right now, take a little piece of paper, write down "asset or liability

  • - question mark", put it in your wallet, wrap it around your bills and the next time you

  • grab that wallet before making an impulsive buying decision, simply ask yourself "Is this

  • product or service, I want to spend on, an asset, meaning it will help me make more money,

  • thus it is a mid- or long-term investment or is it a liability and I will only lose

  • money?

  • That little paper will serve you as a reminder that you are not careless with your money.

  • If you can make this a powerful habit, that sticks with you for the rest of your life

  • or atleast until you're wealthy, you're effectively going to operate as a small-time investor,

  • have a careful eye on your expenses and spend your money only on products and services worth

  • buying.

  • Speaking of habits.

  • As always thanks for watching and subscribe for my upcoming review on the Power of Habit

  • by Charles Duhigg, one of my favorite books.

  • Talk to you soon.

In addition to my summary of Rich Dad, Poor Dad covering all 6 Lessons from the book,

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B1 US asset liability kiyosaki rich poor spend


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    Mahiro Kitauchi posted on 2020/07/07
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