K.Karthik Raja - Financial Research Consultant

ஈக்விட்டி மியூச்சுவல் ஃபண்டு(Equity Mutual Fund) என்றால் என்ன? இதில் உள்ள திட்டங்கள் ?

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இப்பொழுதே இங்கே பதிவு செய்யுங்கள்

சென்னையில் குறைந்த கட்டணத்தில் பங்கு சந்தை பயிற்சி

ஈக்விட்டி மியூச்சுவல் ஃபண்டு என்பது பங்கு சந்தையில் முதலீடு செய்வது ஆகும். அது தானே பங்குச் சந்தை என்றால் அது தான் இல்லை. பங்குச் சந்தையில் தினமும் சந்தை நிலவரத்தைப் பார்த்து முதலீடு செய்ய வேண்டும். ஆனால் ஈக்விட்டி மியூச்சுவல் ஃபண்டுகளைப் பொருத்த வரையில் சிறந்த நிதி ஆலோசகர் உதவியுடன் முதலீடு செய்யும் போது அந்த மியூச்சுவல் ஃபண்டு திட்டத்தினை நிர்வகிக்கும் நிறுவனம் பல தரப்பட்ட துறை சார்ந்த பங்குகளில் முதலீடு செய்து அதன் மூலம் வரும் லாபத்தினைப் பிரித்து அளிக்கும்

லார்ஜ்கேப் திட்டங்கள்

இந்தத் திட்டத்தினைப் பொருத்த வரையில் பிற ஈக்விட்டி திட்டங்களை விடக் குறைந்த ரிஸ்க் உள்ள பெரிய நிறுவனங்களில் முதலீடு செய்யப்படும். லார்ஜ்கேப் திட்டங்கள் பழமைவாத பங்குச் சந்தை முதலீட்டாளர்களுக்கு ஏற்றது ஆகும். இந்தத் திட்டங்கள் நிலையான ஒரு லாபத்தினை முதலீட்டாளர்களுக்கு அளிக்கும்.

ஸ்மால்கேப் திட்டங்கள்

ஸ்மால்கேப் திட்டம் என்பது சிறு நிறுவனங்களில் முதலீடு செய்வது ஆகும். இந்த நிறுவனங்களில் முதலீடு செய்வது அதிக ரிஸ்க் ஆகும், நிறுவனங்களைப் பற்றிய விவரங்கள் குறைந்த அளவில் தான் இணையதளத்தில் இருக்கும். ஆனால் இவை அதிகப்படியான லாபத்தினை அளிக்கும். அதிக ரிஸ்க் இருந்தாலும் அதனைச் சமாளிக்கும் அளவிற்குப் பின் பலம் இருக்க வேண்டும். அதுமட்டும் இல்லாமல் குறைந்தபட்சம் 7 ஆண்டுகள் வரை இந்தத் திட்டங்களில் முதலீடுகளைச் செய்ய வேண்டும்.

மிட்கேப் திட்டங்கள்

நடுத்தர நிறுவனங்களில் முதலீடு செய்யும் திட்டமே மிட்கேப் திட்டங்கள். இந்தத் திட்டங்களில் உள்ள நிறுவனங்களில் முதலீடு செய்யும் போது ரிஸ்க்கும் இருக்கும், சில நேரங்களில் ரிஸ்க் இல்லாமலும் இருக்கும். ஆனால் இவர்களுக்கு லாபம் வரும் போது பெரிய நிறுவனங்களாக இவை வளரும் மற்றும் முதலீட்டாளர்களுக்கு நல்ல லாபம் கிடைக்கும். அதிக ரிஸ்க்கில் முதலீடு செய்ய வேண்டாம் என்று நினைப்பவர்கள் இந்தத் திட்டங்களில் முதலீடு செய்யலாம்.

ஈக்விட்டியுடன் இணைக்கப்பட்ட சேமிப்புத் திட்டங்கள் (ELSS)

ஈக்விட்டியுடன் இணைக்கப்பட்ட சேமிப்புத் திட்டங்களில் முதலீடு செய்வது பிரிவு 80சி-ன் கீழ் வரி விலக்கை அளிக்கும். இந்தத் திட்டங்களில் முதலீடு செய்வது ஒவ்வொரு ஆண்டும் 1.5 லட்சம் ரூபாய் வரை வரி விலக்கைப் பெறலாம். ஆனால் இந்தத் திட்டங்களில் முதலீடு செய்வது மூன்று வருடம் வரை லாக்-இன் காலம் ஆக முதலீடு செய்து இருக்க வெண்டும்.

பலவக்கைப்பட்ட ஈக்விட்டி திட்டங்கள்

நிதி மேலாளரின் சந்தை பார்வையினைப் பொருத்து சந்த மூலதனத்தில் முதலீடு செய்யும் திட்டமாகும் இது. பல சந்தை மூலதனங்களைப் பொருத்து இந்தத் திட்டங்கள் செயல்படுவதால் மிட்கேப் மற்றும் ஸ்மால்கேப் திட்டங்களை விட இதில் ரிஸ் குறைவு. ஆனால் லார்ஜ்கேப் திட்டங்களை விட ரிஸ்க் அதிகம். மிதமான ரிஸ்க்கை விரும்பும் முதலீட்டாளர்களுக்கு இந்தத் திட்டம் சிறந்த தேர்வாக இருக்கும்.

ஈக்விட்டி சார்ந்த ஹைபிரிட் ஃபண்டுகள்

ஈக்விட்டி சார்ந்த ஹைபிரிட் ஃபண்டுகள் அல்லது பேலன்ஸ்டு திட்டங்களில் செய்யப்பட்ட 65 சதவீதம் முதலீடுகள் பங்கு சந்தை மற்றும் கடன் பத்திரங்களில் முதலீடு செய்யப்படும். இது கலவையான முதலீடு திட்டம் என்பதால் பங்கு சந்தை முதலீடுகளை விடக் குறைந்த அளவே ரிஸ்க் உள்ளது.

Arbitrage funds

ரொக்க மற்றும் டெரிவேடிவ் சந்தைகளுக்கு இடையேயான விலை வேறுபாட்டை வருவாயாக மாற்ற இந்தத் திட்டம் பயன்படுகின்றது. குறைந்த காலம் முதலீடு செய்து அதிக வரி விலக்கைப் பெறுவதற்கு ஏற்றதாக இந்த முதலீடு திட்டங்கள் உள்ளன.

துறை சார்ந்த திட்டங்கள்

இந்தத் திட்டம் குறிப்பிட்ட துறைகளில் முதலீடு செய்யும். ஒரு துறையில் இந்தத் திட்ட முதலீடுகள் செய்யப்படுவதினால் அதிக ரிஸ்க் இருக்கும். பொருளாதாரச் சுழற்சியைக் கண்டறிந்து முதலீடுகளை மாற்றி அமைக்க விரும்புபவர்களுக்கு இது சிறந்த திட்டமாகும். முதலீட்டாளர்கள் தங்களது முதலீட்டில் ஒரு சிறிய பங்கை மட்டும் துறை சார்ந்த முதலீடுகள் செய்வது நல்லது.

Your Money or Your Life : Original Mustachian Joe Dominguez

Your Money or Your Life : Original Mustachian Joe Dominguez

Want to hear something really weird? All this time, I’ve been writing this blog about financial independence, a term and movement that is often credited to the 1993 book “Your Money or Your Life”. I had been assuming that Mr. Money Mustache himself was at least partly motivated by a long-ago reading of that book as well, and I’ve been recommending it to people for years.

The only thing is: it turned out I had never read it.

I recently got my hands on a copy of this old classic, and read it in detail, expecting a nice refresher course. Absolutely none of it was even remotely familiar. Most of it aligned perfectly with my own philosophy known as Mustachianism, but surprisingly, not all of it. Many things have changed in the 20 years since that book was written (including the birth of the Internet, the death of Interest rates, and great changes in consumer products and housing). And on top of that, the authors had different tastes in lifestyle and investment, allowing us to come up with the same basic idea from different directions.

So I came out of it more convinced than ever that we’re on to something great here, and with a few new tricks scooped from authors Joe Dominguez and Vicki Robin. Today I’d like to share them with you, in case you too are unfamiliar with the book.

Background:

As the Original Early Retiree, Joe Dominguez apparently grew up in the ghetto, made it out to land a great job in the Wall Street financial sector, saved about $70,000 by age 30 in 1969 ($423k inflation-adjusted to today), and never accepted money for any of his work for the rest of his life. Along the way, he met Vicki Robin, and together they founded an oldschool grassroots movement called the New Roadmap Foundation – a huge network of volunteer teachers complete with seminars and even cassette tapes. Without the benefit of the Internet, they educated thousands of people, freeing them from the chains of their spending addictions. Eventually, the efforts coalesced into the book called Your Money or Your Life, which became a big seller and really helped the word start spreading.

Today, there are a number of financial independence blogs and the concept even has its own category on reddit. Many of the terms that get thrown about (like “FI”) are based on things first invented in this book. But while the book itself has changed the lives of millions of people and I agreed with its methods and message, I found it decidedly quirky and antiquated in parts. And while I know it is considered effective by many and I consider its authors to be god-like in their accomplishments, it was clunky reading at times and it took me over a month to get through it.

Thus, I figured that not everyone has read the book in detail, and many of us could benefit from a quick look at the Nine Step Program it presents, contrasting it where appropriate to what we’ve been learning here on MMM:

Step 1: Make Peace with your Past
Add up all the money you’ve earned in your life, then add up your net worth today. How much have you managed to hold onto? How much did you spend? For most people, this yields an unpleasant surprise.. but it’s okay, for there is no sense beating yourself up over past mistakes.

Step 2: Figure out your Real Earnings and Spending
The idea here is that your real hourly wage is much lower than you think. You can figure it out as follows, and I’ll even put in some plausible figures for a person with a $50,000 annual salary:

Take your total monthly income after federal and state taxes: ($3500)
Then subtract all work-related expenses (commuting, clothes, restaurant lunches, housekeepers, daycare,de-stressing activities etc) ($1500)
Divide this by your total work time (including commuting, dressing up, clothes cleaning, unwinding time, etc.) (248 hours)

The net result is that you take home a lot less than you think, and spend a lot more time doing it. In the example above, the $50k earner ends up bringing home only $8.06 for each hour spent in activities directly related to the job. Thus, when you decide to buy yourself an 8 dollar treat at Starbucks or at the pub, you’ve really just burned off an entire hour of “life energy” which you’ll never get back – you have to add that hour to the end of your work career to achieve financial independence.

Tracking your spending is the easy part – the book recommends you use a notebook to handle everything, whereas I just do all of my spending by credit card, allowing it to be tracked automatically. The key, however, is you should know exactly what you buy each day, and why you decide to buy it. No more unconscious impulse shopping.

3: Create Monthly Reports for Yourself
Keep a table of all income and all spending for each month, break it into categories, and convert the figures into “hours of life energy spent”. Restaurant meals: 20 hours., etc. I find that the “Mint” financial tool does an acceptable job of this for me, but the book recommends you do it in more detail.

4: Three Questions that will Supposedly Transform your Life:
For each of the categories above, ask yourself:

Did I receive fulfillment in proportion to the hours of life energy spent?
Is this expenditure in alignment with my goals and life purpose?
How might this expenditure change if I didn’t have to work for a living? (more, less, same)
5: Keep a prominent (i.e. right on your kitchen wall) graph of income and expenses
You keep doing this for multiple months which will grow into multiple years. The authors report that most people start to see their income grow even as their expenses shrink, since they are now learning to spend more consciously. Although I don’t have anything on my kitchen wall, we do maintain a history of spreadsheet versions and graphs of savings that dates back several years. But if you are a beginner who still wrangles with optional luxury purchases while still in debt, the kitchen wall is a good idea.

6: Learn to Value your Life Energy by Minimizing Spending
This is the meat of anyone’s financial independence – learning to spend your money efficiently on the things you do get true fulfillment from, and not spend it all on the things you don’t. The book presents 101 tips, most of which have been covered here on this blog at various times.

7: Maximize your Earnings
Adopt a positive attitude about your work and appreciate the earnings as a tool which gets you to financial independence.. rather than feeling like a victim of outside forces like the economy or a recession. Seek to earn more, and don’t be limited to work only in your current field – after all, you’ll be retiring soon anyway, meaning every activity will soon be open to you whether paid or unpaid.

8: Watch for the Crossover Point
This is when your passive income from investments equals your expenses. When you reach that point – DingDing! – you are Financially Independent. However, the authors define this as “Monthly Income = Capital x Current long-term interest rate/12 months”, since they like government bonds as their retirement income vehicle, which currently pay approximately zero after adjusting for inflation. But Mustachians of course have other options, discussed below.

9: Managing your Money
“Become knowledgeable and invest your capital in such a way as to provide an absolutely safe income sufficient to meet your basic needs for life”

Here’s where one of the most significant differences pops up between YMOYL and MMM (and other modern takes on financial independence). In the early 1980s, you could buy 30-year government bonds with a nominal yield of over 12%. Even in the surrounding time periods, yields were well over 7%. The YM authors liked the guaranteed return and decided to use these bonds as a complete income source*.

Due to our continued hangover from the financial crisis, the latest figure for the 30-year bonds is about 2.9%. While it is still possible to retire on bonds, I consider an over-50% reduction in investment returns in exchange for “safety” to be too high a price to pay. Safety is just an expensive illusion anyway. So instead of bonds, we focus here on stocks, dividends, owning rental real estate (or its passive cousin REITs), and even a bit of wacky new higher risk/return stuff like peer-to-peer lending. And on top of that, I don’t consider “retirement” to mean “never accepting money for things you do”, so I allow you to do fun things that happen to generate money in retirement as well.

Your Money or Your Life is a wise book, and the authors were clearly motivated by what they saw was a pointless death march of society. Workworkwork, Buybuybuy, TrashDestroyWaste, Die. Even 20 years ago, when the first clunky SUVs were coming to market and trailblazing a path to widespread stupidity, this pattern was already obvious. And Joe and Vicki were wise to it, trying to guide society away from its wasteful ways and vividly aware that our consumption is an ongoing trainwreck of environmental destruction.

The bad news is that we went through some pretty shitty decades since then, when measured by the spread of the very consumer disease the book was fighting against. Cars turned into personal trucks, commutes grew, suburbs sprawled, and China joined the party, building a communist copy of the Great American Smokestack, flooding their own country with asphalt and ours with cheap manufactured goods. Americans kept working more so they could borrow more and buy more, we grew much fatter and less happy, and generally continue to live our lives in the most blind and inefficient way possible on average.

The good news is, the Internet happened. Of course, it spawned an acceleration of technological progress, giving us things like remote working and energy-efficient products. But technology can’t save the world by itself – in the wrong hands, it just allows us to consume more efficiently, which means consuming more. It’s a good tool, but it’s not enough.

The good news comes from the free exchange of ideas. Only now can the ideas of the non-wealthy majority compete equally with the billion-dollar budgets of crusty old companies seeking to prolong over-consumption. Nowadays, even an untrained individual can sit on the couch and type some shit into the computer, and it can reach a wider audience than a successful book might have in the past. So imagine what a big group of people could accomplish, some of them with influence over companies and governments, if they all started grooving on the right message.

The bottom line: I am thankful to Joe Dominguez and Vicki Robin for getting so much of this started, as are countless thousands of other people who are now more free than they could have otherwise been.

*Like me, they were not overly worried about inflation – that measures changes in the Consumer Price Index, which is an approximation of the blind spending patterns of Sucka Consumers rather than flexible and conscious purchasers.

Your Money or Your Life - Vicki Robin's

Your Money Or Your Life -

Your Money or Your Life - Vicki Robin's

"Waste lies in not in the number of possessions, but in the failure to enjoy them."

I had the chance to pick up Your Money or Your Life by Vicki Robin and Joe Dominguez. They are thought to be the ones that coined the term "FIer" A writer from a FI group in NYC brought the book and passed it around. It didn't click to me that this was the book. I had it on my reading list and bumped it up so that I could review it earlier. I'm so surprised I hadn't come across it earlier in all of my reading, but here we are and it seems like everything about the FI concept is falling into place for me.

This post contains affiliate links. See Disclosures for details.

Financial independence is the natural and inescapable by-product of life. After a certain point, you will no longer earn a living. The only choice in the matter is when and how the point is reached.
— Your Money or Your Life
I love this book because it is one of the few that relate our consumption with the wallet and the planet. It also the book that talks about the concept of the Fulfillment Curve. It is a concept that explains that for many of us, we already have everything we need. This is our Enough point. The graph below explains it best. Enough is plenty.

Your Money or Your Life goes through 7 Steps to transform your relationship with money and achieving financial independence. I have listed them below as well as my commentary on the step. I do highly encourage you pick up the book (from your library) as there are many concepts in there that might strike an idea today or tomorrow. It's a long book like most personal finance books. The book covers a lot of exercises. Sometimes, it goes into it a little too much, but for those starting out, I would highly recommend going through the exercises carefully and diligently.

1. Make Peace with the Past

What do you have to show for the money you’ve earned?
— Your Money or Your Life
This is an important start and I'm glad the book tackles this first. The important thing with any journey is to acknowledge the past, learn from it and move on. Specifically in the personal finance world, may of us dwell too often on the mistakes of the past or past conditioning to move our current state. We are influenced by many things even before we truly understand what money is so it's time that we make peace with the past.

The action item in this step asks you to add up your lifetime income, your net worth, your lifetime wealth ratio, your assets, and your liabilities. It's an eye-opening look at where our money has gone all of these years. We will also get a chance to look at our worth. Have we been valuing ourselves and earning the income that we deserve? At this point of time, commit to a "no shame, no blame" approach. Personal finance is different for all of us. That's why it's call "personal" finance. We need to start moving away from the shame of our mistakes and stop blaming others for mistakes as well. This really goes into the concept of the money mindset. It's important to shift the way we all think about money in order to get the life that we want.

Check out this video of Ramit Sethi of iwillteachyoutoberich.com go through the Psychology of Money. Where you do find yourself? Who influenced your money habits? How can you accept, move on or carry those influences? How can you use what you've learned about your money to move forward?

2. Being in the Present - Tracking Your Life Energy

How much money are you making for the amount of time you work?
— Your Money or Your Life
This step is an eye opening look at how we exchange our time for money. When we normally calculate our hourly wage, we automatically just divide our salary by the number of hours at work, but it's actually more complicated than that. Depending on the job that we have, we spend money, time and mental energy to commute, to dress for work, to plan, to prepare. This all takes time, but we don't include this in the calculation. This is important to do because this is the overall exchange of our time for money.

When you get down to the details, 40 hours at work + 10 hours of commute time, + 2 hours checking email after work + 2 hours shopping and figuring out what to wear means already 56 hours focused on work which if we divide using our salary, our hourly wage has already declined. This adds up, but this isn't even the end. When we think about tracking the life energy, we also need to track every cent of where our money is going. We exchange our time for money. We buy things and services with money so where is our time going? The action item in this step is to track where every penny is spent in the month so you get a sense of where money is going and where your life energy is going.

How I Will Raise Money-Smart Kids (Not Spoiled Kids)
How I Will Raise Money-Smart Kids (Not Spoiled Kids)

3. Monthly Tabulation

Just say yes to being conscious.
— Your Money or Your Life
This is a great exercise to really see how much you spend. Sometimes this number gets nebulous and sometimes we just don't want to face it, but we do need to sit down and map out where our money is going. It's easy to say money goes to food or to transportation, but what's the breakdown. Why are these numbers so high or so low? What can be done to curb spending on specific categories?

It's also important to understand how much it really takes to keep you basic needs met. Is it as much as you think? How much of the spending are unconscious and wants instead of true needs? The numbers don't lie either. It's objective in what it tells you. When you know these numbers, convert it back to your hourly wage, how much of your time was spent to buy it?

The action item in this step is to create income and expense categories that is unique to your own life.

4. Three Questions to Transform Your Life

You can never have enough if you are measuring by what others have or think.
— Your Money or Your Life
The three question below are used to rate your spending. It's what the book calls the "internal yardstick for fulfillment." It basically questions each line of your monthly tabulation to see if it was truly worth the price and expense. Note that now we aren't just looking at cost of things, but also time and mental energy costs.

Did I receive fulfillment, satisfaction and value in proportion to life energy spent?
Is this expenditure of life energy in alignment with my values and purpose?
How might this expenditure change if I didn't have to work for a living?

5. Making Life Energy Visible

Transforming our relationship with money takes time and patience.
— Your Money or Your Life
This step is akin to a vision board. Seeing reminders of where you want to focus your money and your energy to is a big signal to yourself and to the universe about what's important to you. Each reminder also signals and makes you question how you live and optimize each day. Is it towards your goals?

This step is basically look at a chart of your expenses over time. Are there dips and spikes? The goal is to keep your expense trend line flat or declining as you get better about spending, reducing debt and improving savings. The goal is to make this chart visible so that you see it everyday. It can be printed, buy since it's 2018, my fave way to do this is to use Personal Capital to see my net worth, expenses and income. It's accessible on my phone so easy for me to get to anytime of day.

Check out Personal Capital to track your finances.

6. Valuing Your Life Energy - Minimizing Spending

Save money, save the planet. Money is a lien on the life energy of the planet.
— Your Money or Your Life
This step is about the conscious lowering and eliminating of expenses. We live in a world of over abundance. We continuously buy, upgrade, and get the latest and greatest when we don't need it. This results in a skinny wallet and a planet bulging with waste.

Here are 10 Ways to Save Money:

Don't go shopping. Don't make shopping a past time. Avoid advertisements and marketing.
Live within your means. Be careful with credit.
Take care of what you have. Pay attention and practice small steps to extend the life of objects and yourself.
Wear it out. Trends come and go. Use things wisely and gain maximum value out of them.
Do it yourself. Learn a few basic skills like cooking, sewing and plumbing so that you don't have to pay someone to do it.
Anticipate your needs. Think ahead about your true needs so that you can plan ahead.
Research value, quality, durability, multiple use and price. Buy quality and know where it came from.
Buy it for less. Research, negotiate or buy used to get an item for less.
Meet your needs differently. Figure out alternative solutions to your needs.

7. Valuing Your Life Energy - Maximizing Income

You want more money as an expression of your self-esteem, of valuing your life energy.
— Your Money or Your Life
This last step is about valuing your life energy and increasing income. It's knowing the difference between your life's work and paid employment. It's understanding that your time is valuable. It's finding your purpose and putting in the intention and willingness to achieve that purpose.

Don't be passive about the size of your earnings. Cultivate positive attitudes, take pride in what you are doing and ask to be paid for your value and results. They key is to re-shifting why you want to spend more hours at work. Not for money or greed, but so that you can reclaim your life energy, so that you can get out of debt faster, so that you can save more and create security for yourself.

8. Capital and the Crossover Point

The Crossover Point provides us with our final definition of financial independence. At the Crossover Point, where monthly investment income crosses above monthly expenses, you will be financially independence in the traditional sense of that term. You will have a safe, steady income from a source other than a job.
— Your Money or Your Life
The holy grail of Financial Independence is the Crossover Point. It's when your savings and investment income generate enough to meet your expenses. This is the baseline Financial Independence. This is where we all strive for. The question is whether this happens at 65 (hopefully) or sooner. At this time point, you can stop working for money, but if you like what you do, you can absolutely continue what you are doing as long as you continue to exchange your life energy in a way that serves your purpose. If you follow the steps above, you should see a growing difference between income and expenses. The difference should be in savings/investment.

Your Money or Your Life: The Crossover Point
Your Money or Your Life: The Crossover Point

9. Managing Your Finances

Empower yourself to make financial choices about long-term income-producing investments.
— Your Money Or Your Life
Don't leave it to the "experts." Now that you've faced your finances head on, understand where your money is going, know the value of true work and understand how much of your life energy you want to expend, educate yourself on how to make your money work for you. The experts don't know everything and sometimes don't have your best interest at heart. Get informed and empower yourself to ask the right questions. There are no quick wins in FI so be weary of those offering such solutions.

The recommendation in the book is to put the money saved from following the steps above and invest in Treasury Bonds. Today, there are many other investment options that can yield similar risk and reward to so consider this. It's important now that your money work for you.

Final Thoughts

I highly recommend this book and recommend re-reading it every year to let the ideas sink and shift in you. It's a whole new way to look at how we work, how we spend and what we value. The by-product of all of these steps is Financial Independence. In the end, all of steps will lead to you to optimize your spending, increase income and increase savings and investment in such a way that investment income will crossover to your expenses and true Financial Independence will be achieved.

3. The Millionaire Fast Lane - MJ DeMarco.

Millionaire Fastlane

1. Big ideas
1.1. Process over events
1.2. Being frugal with time, not money
1.3. Law of effect
1.3.1. To make millions you must serve millions in scale or a few in magnitude
1.4. Timing is never perfect.
1.4.1. Waiting empowers mediocrity
1.5. Execution is king and ideas are pawns
1.5.1. Don't get seduced by ideas
1.6. Focus on one thing
2. 8. Your speed - accelerate wealth
2.1. The speed of success
2.1.1. Execution is king and ideas are pawns
2.1.1.1. An idea is an event while execution is a process

2.1.1.2. Ideas are worthless while execution is priceless

2.1.2. ideas are potential speed but execution is Real speed
2.2. It's not about the business plan it's about execution
2.2.1. When it Comes to your ideas and plans you never know what works until you put it out to the real world
2.2.2. Put your Executed ideas to the real world and let the world give you feedback
2.2.3. As general Powell said no plan for war survives contact with the enemy and in this case the enemy is the real world
2.3. pedestrians will make you rich
2.3.1. Your customer and their satisfaction hold the key to everything you want from the business
2.3.2. Is very important to have great customer service
2.4. Throw hijackers to the curb
2.4.1. A company is only as good as the people it keeps
2.4.2. Business partnerships are like a marriage
2.4.3. As Ronnald Reagan said trust but verify
2.5. Be someone savior
2.5.1. Use your competition to exploit their weaknesses
2.5.2. Don't become a me too product or business. Don't get commoditized
2.6. Build brand not businesses
2.6.1. Develop your USP
2.6.1.1. Uncover the benefits

2.6.1.2. Be unique

2.6.1.3. Be Specific and give evidence

2.6.1.4. Keep it short clear and concise

2.6.1.5. Integrate your USP into all marketing material

2.6.2. How to rise above the noise
2.6.2.1. Polarize

2.6.2.2. Arouse emotions

2.6.2.3. Be risqué

2.6.2.4. Encourage interaction

2.6.2.5. Be unconventional

2.6.3. Translate the features to benefits for other people
2.7. Choose monogamy over polygamy
2.7.1. Focus on one thing and do it in the most excellent way
3. 7. The roads to wealth
3.1. Right road routes to wealth
3.1.1. Commandments
3.1.1.1. Need

3.1.1.2. Entry

3.1.1.3. Control

3.1.1.4. Scale

3.1.1.5. Time

3.2. Need
3.2.1. Businesses that solve needs win
3.2.2. Focus on the needs of others
3.2.2.1. 90% of businesses fail because they are based on selfish internal needs, not external market needs

3.2.3. To attract money is to forget about money
3.2.3.1. Attract money, don't chase it.

3.2.3.2. Money is attracted to people who solve problems and add value

3.2.4. The amount of money in your life is a reflection of the value you added to others
3.3. Entry
3.3.1. As entry barriers fall, competition rises
3.3.2. Exceptionalism is required to overcome weak entry barriers
3.4. Control
3.4.1. You need to control your system and every aspect of it
3.5. Scale
3.5.1. Without leverage you cannot create wealth exponentially
3.6. Time
3.6.1. A business attached to your time is a job
3.6.2. A business that earns income exclusive of your time meets the commandment of time
3.7. Rapid wealth
3.7.1. Rapid wealth can be generated if all of the five Commandments of wealth are met. The three Avenue for that are
3.7.1.1. 1. Internet

3.7.1.2. 2. Innovation

3.7.1.3. 3. Intentional iteration

3.8. Find your OpenROAD
3.8.1. Fast Lane success resides in execution not in idea
3.8.2. Opportunities are rarely about inventing breakthroughs but about performance gaps inconveniences and pain points
3.8.3. most successful entrepreneurs don't actually have Blockbuster ideas. They just take existing ideas and make them better or expose them to more people
3.9. Give your road a destination
3.9.1. Define your Target lifestyle
3.9.2. Assess the cost
3.9.3. Set the targets
3.9.4. Make it real
3.9.4.1. Small chunk your goals and start to work towards them

4. 6. Your vehicle to wealth : you
4.1. Do you really own yourself
4.1.1. In order to really own your wealth vehicle you must create a corporation or Business entity
4.1.2. Own yourself first
4.1.2.1. When u have a job someone else own you

4.1.2.2. You have to have a corporate structure so that you pay yourself first and the government last

4.2. Life steering wheel
4.2.1. The steering wheel of your life is your choices
4.2.1.1. Both success and failure come from small choices made every day that accumulate over time

4.2.1.2. The younger you are the more potent and powerful these choices will be

4.2.1.3. Your choices are very dangerous weapon just like the steering wheel of the car. Jerk it 3 inches this way to that way and you could be headed straight towards a concrete wall or towards the freeway

4.2.1.3.1. A bad choice can set you off on the wrong trajectory by just 1° today but over the years, the error will be magnified tremendously

4.2.1.4. The smallest choices made today create habits which create processes which either lead you to fast lane or the slow lane.

4.2.1.4.1. A fast lane process is hundreds of choices

4.2.2. Success is not one choice, but hundreds of choices strung together
4.2.2.1. All these choices create a process which creates your lifestyle

4.2.2.1.1. Lifestyle choices will make you rich

4.2.3. Choice is the most powerful control u have in your life
4.3. Wipe your windshield clean
4.3.1. We have 2 types of choices
4.3.1.1. Choices of perception

4.3.1.2. Choices of action

4.3.2. Strategies for making better choices
4.3.2.1. Worst-case consequence analysis

4.3.2.1.1. What is the worst possible consequence of this choice

4.3.2.1.2. What is the probability of that outcome

4.3.2.1.3. Is that an acceptable risk

4.3.2.2. Weighted average decision matrix

4.3.2.2.1. Giving different weights to different factors and then calculating the overall score

4.3.3. If your past defines your existence it will be impossible for you to become who you want to become in the future
4.4. Deodorize headwinds
4.4.1. The natural state of the masses is to be average not extraordinary
4.4.2. Be very cognizant of the people you have in your life because they can either pull you forward or push you back
4.5. Your primordial fuel -time
4.5.1. Value your time poorly and you will be poor
4.5.2. The greatest theft of all humanity is to act as if the time you have on this earth is infinite
4.5.3. Fast laners are frugal with time while slow laners are frugal with money
4.5.4. Time is the king of all assets you have
4.5.5. Time is deathly scarce while money is abundant
4.6. Change that dirty, stale oil
4.6.1. You have to educate yourself in order to move the fast lane
4.6.2. Education starts after graduation not before in most cases
4.7. Hit the redline
4.7.1. Difference between interest and commitment
4.7.1.1. Interest

4.7.1.1.1. Quitting after the 2nd failure

4.7.1.2. Commitment

4.7.1.2.1. Continuing after the 100th failure

4.7.2. If you avoid failure you will also avoid success
4.7.3. Interest is first gear while commitment is redline
4.7.4. The timing is never perfect. Waiting always empowers mediocrity
4.7.4.1. People sit around their whole lives waiting for the perfect opportunity but the truth is that there is nothing like the perfect time and the perfect opportunity

4.7.4.2. Someday is dangerous and paralyzing.

4.7.4.2.1. Someday never arrives

5. 5. Wealth - fast lane
5.1. The fast lane
5.1.1. It is marked by controllable unlimited leverage
5.1.2. Time is the most important asset you have far exceeding money.
5.1.3. Get rich quick?
5.1.3.1. Get rich quick is possible if it is preceded by process

5.1.3.2. What is not possible is get rich easy

5.1.4. System vs job
5.1.4.1. The fast lane is a business system

5.1.4.1.1. You construct a system that works for you you and when you are not working

5.1.4.2. The slow lane is a job

5.2. The playbook for wealth
5.2.1. Switch the playbook. Use the producer playbook instead of the consumer playbook
5.2.1.1. Instead of buying products from a TV ad you sell products on TV

5.2.1.2. Instead of taking a job you hire for jobs

5.3. How the rich really get rich
5.3.1. The primary wealth accelerant for the rich is appreciable assets- created founded or bought
5.3.1.1. Asset value = net profit x industry multiplier

5.3.2. Liquidation events are another way to get rich fast
5.4. Divorce wealth from time
5.4.1. Divorce yourself from the slow lane idea of transaction of money for time
5.4.1.1. You need to become a business owner

5.4.2. Business systems break the bonds between your time for your money
5.5. Recruit your army
5.5.1. Fast laners don't use the stock market or compound interest to get rich. But they use it to preserve income and create liquidity
5.5.2. A saved dollar is a freedom fighter recruited to your army
5.6. The real law of wealth
5.6.1. The law of effection
5.6.1.1. The More lives you affect through an entity you control, in scale or magnitude, The richer you will become

5.6.1.1.1. Net profit = units sold (scale) * unit profit ( magnitude )

5.6.1.2. To make millions you must serve millions in scale or a few in magnitude

6. 4. Mediocrity- the slow lane
6.1. The slow lane
6.1.1. You selloff today in hopes of a glorious tomorrow
6.1.2. You work for you retirement. You work for a job till you're 65 and then retire in the hopes that the money you have saved up Will last for the next 10, 20, 30 years
6.1.2.1. You are working in the hope that you will be able to enjoy your life at the age of 65 when you retire

6.1.2.2. You trade your time now for a possible pay off in the future

6.1.2.3. You take three weeks of vacation every year in the hopes that one day when you're 65 you will be able to take a really long location

6.1.2.4. The predisposed destination for the slow lane is mediocrity. Not great and not too bad either

6.2. Your job
6.2.1. Jobs are domestication into normalcy
6.2.1.1. They have limited leverage and limited control

6.2.1.2. When you're trading your time away for money you're trading your life away

6.2.1.3. you expect to pay yourself last. The tax system will more or less get 50% of your pay even before you see it

6.3. Why you aren't rich
6.3.1. To attract large sums of money you need two things
6.3.1.1. Control

6.3.1.1.1. In a job you have no control. You have no idea when you might lose your job

6.3.1.2. Leverage

6.3.1.2.1. Yeah job you have almost no leverage because you get paid for the hours you work

6.3.2. Within the slow lane time is treated like A fountain That will run for ever.
6.3.3. The slow lane is a plan of hope
6.3.3.1. Hope that your 401(k) does fine

6.3.3.2. Hope that you will have a job at 65

6.3.3.3. That you will be healthy enough to enjoy the money at 65

6.4. On education
6.4.1. No matter how much advanced education you get. If you get a job after it you're still trading time for money
6.5. Game of hope
6.5.1. The dangers of slow lane
6.5.1.1. The danger that you will be healthy when you retire at 65

6.5.1.2. That you will be gainfully employed for the rest of your career no matter what

6.5.1.3. The Slow lane wants you to give up your lifestyle and become a miser

6.5.1.4. That your 401(k) will return the 10% compounded returns as planned

6.5.2. You can't win the money game by playing on defense. You have to play on explosive offense to create great wealth
6.5.3. Distinctions between slow lane and fast
6.5.3.1. 1

6.5.3.1.1. In the slow lane you trade time for money

6.5.3.1.2. In fast lane you leverage time

6.5.3.2. 2

6.5.3.2.1. In slow lane you are cheap with money

6.5.3.2.2. In fast lane you are cheap with time because that is your greatest asset

7. 3. Poorness- the sidewalk
7.1. The sidewalk roadmap
7.1.1. Pleasure today in Lieu of security in the future
7.1.2. It's all about the short term
7.1.3. There is no plan, no savings. Spend more than you earn.
7.2. Has your wealth been toxified
7.2.1. Wealth is defined by your health your relationships and the freedom you enjoy not by material possessions
7.2.2. Unaffordable material possessions are destructive to wealth
7.3. Misuse money and money will misuse you
7.3.1. The consequence of instant gratification is the destruction of health wealth and freedom
7.4. Luck
7.4.1. Process creates events that others see as luck
7.4.2. Luck is a product of process action hard work and being on there
7.4.3. Sidewalkers hate process.
7.4.3.1. Hence their financial plan banks on events rather than processes (like saving, investing)

7.4.4. If you believe that luck is the source of wealth, you gravitate towards events of luck .... In quest of finding a big hit
7.4.5. Adherence to process improves your probability of success
7.5. Accountability
7.5.1. Well requires that you be accountable for you wealth
7.5.2. Own your mistakes failures and triumphs
7.5.2.1. When you take responsibility for your failure is not a source of victimhood anymore

7.5.2.1.1. It's source of learning

8. 1. Get rich slow is get rich old
8.1. MJ's story
8.1.1. The object of life is not to be on the side of the masses, but to escape finding one self in the ranks of insane. - Marcus Aurelius
8.1.2. Fast wealth is created exponentially, not linearly. Usually through business
8.2. The great deception
8.2.1. Get rich slow requires a long life of gainful employment
8.2.2. Get rich slow is deceptive because you are dependent on another company for giving you a steady job and on Wall Street for your investments. Think 2008 crash
8.2.3. The real golden years of your life are when you are young and vibrant enough to enjoy your wealth
9. 2. Wealth is not a road but a road trip
9.1. The road trip to wealth
9.1.1. Your pursuit of wealth stalls when your focus is on the destination and not on the journey itself
9.1.1.1. Process is the road trip to wealth. The definition is wealth but it is only found by taking the process road trip

9.1.2. Millionaires are forged by process not events
9.1.2.1. Wealth is not an event

9.1.2.2. Wealth eludes most people because they are preoccupied with events while disregarding process.

9.1.2.3. Without process there are no events

9.1.2.3.1. All events of wealth are preceded by process which includes failures setbacks hard work and the likes

9.1.2.3.2. If you try to skip process there will be no events

9.1.2.4. Process can not be outsourced - because process dawns wisdom, personal growth, strength

9.1.3. Parts of the road
9.1.3.1. Your roadmap

9.1.3.1.1. The different possibilities of maps

9.1.3.2. Your Vehicle

9.1.3.2.1. Your Vehicle is you. No one can take that journey for you

9.1.3.3. Your roads

9.1.3.3.1. The different careers or paths you choose

9.1.3.4. Your speed

9.1.3.4.1. Your speed of execution and your speed of going from idea to implementation

9.1.3.5. Tolls

9.1.3.5.1. Risks, sacrifices hardships

9.1.3.5.2. If you resist the toll Wealth will resist u

9.2. The roadmaps to wealth
9.2.1. The compass for wealth
9.2.1.1. If you want to change your life change your choices

9.2.2. Each roadmap has a predetermined destination
9.2.2.1. Sidewalk

9.2.2.1.1. Poorness

9.2.2.2. Slow lane

9.2.2.2.1. Mediocrity

9.2.2.3. Fast lane

9.2.2.3.1. Wealth

ராபர்ட் கியோசாகியின் வெற்றிக்கான முக்கிய 15 விதிகள்

ராபர்ட் கியோசாகி அமெரிக்க தொழிலதிபர், முதலீட்டாளர், சுய முன்னேற்ற மற்றும் நிதி சார்ந்த எழுத்தாளர் , கல்வியாளர், ஊக்கமூட்டும் பேச்சாளர், நிதி சார்ந்த நிதி கல்வியறிவாளர், மற்றும் வானொலி ஆளுமை உள்ளவர். நிதி (financial) மற்றும் வணிக கல்வியறிவு (business education) வழங்கும் Rich Dad நிறுவனத்தின் நிறுவனர். ராபர்ட் கியோசாகி (Robert Kiyosaki) உலக அளவில் அதிகமான விற்பனையான நிதி மற்றும் முதலீடு தொடர்பான Rich Dad Poor Dad புத்தகத்தின் ஆசிரியர்.

ராபர்ட் கியோசாகியின் வெற்றிக்கான முக்கிய 15 விதிகள்
அனுபவங்கள் உங்களை மிகச் சிறந்தவராக்கும்.
உங்கள் வாழக்கையை மிக எளிமையாக்குங்கள்.
தவறுகளிலிருந்து பாடம் கற்று கொள்ளுங்கள்.
தொடர்ந்து கற்றுக் கொண்டே இருங்கள். கற்றுக் கொள்வதை நிறுத்திவிடாதீர்கள்.
உங்கள் செலவுகளை (Spending) உங்கள் கட்டுப்பாட்டில் வைத்திருங்கள்.
எதிர்பாராத எதிர்கால செலவுகளுக்கும் திட்டங்களை தீட்டுங்கள்.
தெளிவான மற்றும் துல்லியமான நிதி இலக்குகளை (Financial Goals) கொண்டிருங்கள்.
பொறுப்புகளை ஏற்றுகொள்ளுங்கள்.
உங்களை சுற்றி உங்களை போல் எண்ணம் (Like minded) கொண்ட ஆதரவான மனிதர்களை வைத்திருங்கள்.
நீங்கள் வெற்றி அடையும் வரை ஒரே பாதையில் செலுங்கள். வெற்றியிலேயே உங்கள் எல்லா கவனத்தை (focus) செலுத்துங்கள்.
கடினமான தருணங்கள் உங்களுக்கு புதிய வாய்ப்புகளை (Opportunities) உருவாக்கும்.
தோல்வியடைவதற்கும் (failure), இழப்பதற்கும் (losses) பயப்படாதீர்கள்.
நீங்கள் எதற்காக கடினமாக உழைக்கிறீர்கள் என்பதை அறிந்துகொள்ளுங்கள்.
நீங்கள் சேமிப்பதை விட முதலீடு செய்யுங்கள்.
எப்போதும் ஒரு பொருளை வாங்கும் முன், எப்படி என்னால் இதை வாங்க முடியும் என்று கேளுங்கள்.

Rich dad poor dad summary

Introduction

Robert Kiyosaki introduces the context, says that his poor dad went to Stanford and earned a PhD, and his rich dad never finished the eighth grade. Having two dads advising him so differently regarding money turned out to be very valuable for Robert Kiyosaki and made him think more in the long run. Then, he goes on to explain more differences between his both dads and their attitude regarding money. Kiyosaki chose to listen to and learn from his rich dad, who taught him 6 lessons over five years, described in the next chapters.

Chapter 1: The rich don’t work for money

At a very young age, Robert Kiyosaki had his first business partner, his schoolmate Mike. They worked for Mike’s dad, who taught them lessons on how to make money. The first rule they learn was that the rich don’t work hard for money, their money works hard for them. The first thing Mike’s dad did was to pay Robert and Mike 10 cents/hr so that they could see what is like to get a salary they find short – and imagine how would that be if multiplied over the time-span of 50 years. Then, rich dad had them working for free, which taught them two lessons: 1) most people are guided by fear (of not being able to pay for their bills) or desire (e.g. greed) and 2) we need to think of alternatives to make money, which Robert and Mike did – at a very a young age they set up a small library room, where they provided leftover magazines to other kids for a small fee.

Chapter 2: Why teach financial literacy?

Kiyosaki makes an analogy between retirement and a tree: if you water it for a few years, at some point it doesn’t need to be watered anymore, because its roots are deep in enough. Kiyosaki teaches lesson 2, which is why to be financially educated. He argues that, first, its important because of the ups and downs of the market (page #59). In page #61, he explains how he and Mike learned it from the rich dad. Then, he goes on to explain rule #1, which he considers the foundation of a good financial literacy: the definition of an asset and a liability. Although simple, this is a very profound concept. He also introduces cash-flow diagrams which are useful to understand the concepts, but basically, it explains how to filter between assets and liabilities. In page #70, he provides a list of assets. Kiyosaki also argues that not only cash flow tells the story of how a person handles money, but how more money can actually be a problem to many people. He provides the example of his poor dad, who considered his house to be his biggest investment, and how it is to be trapped in the rat race: people buy expensive houses which they pay for 30 years and use a bill consolidation loan to pay off their credit cards (page #74).

The story of this couple keeps repeating: as a result of their income increasing, they buy their dream home, and a new car. Soon they find themselves trapped in the rat race. All to often, the middle class lets the power of money to control them. Kiyosaki argues that people simply lack financial education. For instance, the decision of owning a house in lieu of an investment portfolio results in loss of time, additional capital and education (page #83). The chapter then explains that the rich get richer because they acquire assets and the middle class struggles because they increase their liabilities. Some analogies are made: income means working for a company and the government (since it gets its share before you see it) and owning a house means working for the bank (pages #89 and #90).

Chapter 3: Mind your business
Kiyosaki starts off by explaining the difference between each one’s profession and business. At school, we learn how to work for somebody else for the rest of our lives. Rich people focus on assets, the masses focus on their income, and that is why they are always asking for a promotion or raise. This leads to financial struggle. Kiyosaki recommends you to keep your job and build your asset column; keep your expenses low, reduce liabilities and buy assets. Think of your dollars as employees – they work 24/7 for you without complaining. Build this list first, afford some luxuries after.

Chapter 4: The history of taxes and the power of corporations
Kiyosaki explains that in the beginning there was no taxes and government created taxes to punish the rich and give to the poor. The rich are smart, the middle class ends up paying way more than the rich. In particular, rich use corporations to pay fewer taxes, as they are very effective at reducing the tax burden. Knowledge is power. Money should work for you, not the other way around: don’t give the power to the government or your employer. There is a link to the previous chapter of minding your business. Kiyosaki says that working for Xerox Corp. was essential for him to build his RE holding, which payed for his Porsche. Stresses the importance of financial IQ again (pages 116-120).

Chapter 5: The rich invent money
Kiyosaki starts by emphasizing that fear often suppresses genius in people. As a teacher for financial education, he often fosters his students to take risks. At this point, you may have the question of why to improve your financial IQ. Kiyosaki argues that only you can answer that question. However, we live in astonishingly fast-changing times, and people are often caught off guard, or “pushed around” as Kiyosaki says. They often blame the economy or their boss, and only seldom they consider that the problem is actually them.

Kiyosaki uses CASHFLOW, a game he created, to teach investment to make a series of other points. First, some people playing it can see the game reflecting them. This is good because they can quickly learn what is causing them to struggle. Some people playing the game gain lots of money but don’t know what to do with it. Others claim that “the right cards” are not coming to them, and they just sit there, waiting. Some get the right opportunity but they don’t have the money. Some get the opportunity, have the money but don’t know what to do. And all this comes down to the meaning of having financial IQ, which really means having more options.

After this, Kiyosaki shows a series of deals he did himself, buying-and-selling Real Estate and increasing his asset columns, showing a practical example of what financial intelligence brought him. Then, on page 138, he summarizes financial intelligence as being a set of 4 skills: accounting, investing, understanding markets and law. In page 148, two kinds of investors are defined, those that buy packaged investments, and those that put investments together, and Robert Kiyosaki says that the latter are the more professional investor and his rich dad encouraged him to be. To be this kind of investor, you need to find opportunities that other investors missed, know how to raise capital and organize smart people. There is always risk, learn to manage it instead of avoiding it.

Chapter 6: Work to learn, don’t work for money
This chapter is primarily about the benefit of learning new skills, showing how trapped one become when we are too specialized. The chapter starts off with an example that Robert Kiyosaki when himself through. He interviewed by a journalist who was an excellent writer but didn’t do well in selling her books, so Kiyosaki advised her to take sales-training courses. He generalizes this problem, stating that many talented people struggle financially because they only master one skill.

Kiyosaki provides a few examples of his own journey. First, he says that he entitled his first book “If You Want to Be Rich & Happy Don’t Go to School” on purpose; not because he is against education, but because he knew that title would take him to more TV and radio shows, and sell more. Then, he goes on to explain that he kept changing jobs to learn more skills, and skills that became important for him to succeed. He joined Xerox Corp because he was a shy person, and Xerox has one of the best sales-training programs in America. While his rich dad was proud of him, his poor dad was more disappointed at every job change. To other people, Robert Kiyosaki recommends to join a marketing company as a second job, or join a union if they are too specialized and refuse to widen their skills.

One of the examples that is provided is that, although most his students claim to cook a better hamburger than fast food chains, the fast food chains make way more money than his students. He uses examples of other people who are not doing so well financially, mostly due to their lack of knowledge of business. He also says that people who run major companies are usually transferred between departments within the company till they get to the top, to acquire knowledge in all areas of business. In page 168, Kiyosaki summarizes the main management skills needed to succeed: cash flow, systems, and people, while the most important specialized skills are sales and marketing. One of the analogies made with specialized people being vulnerable is an athlete who becomes injured or too old to play. Finally, Kiyosaki remembers the importance of giving, in order to get.

Chapter 7: Overcoming obstacles
This chapter starts with a bold claim: “the primary difference between a rich person and a poor person is how they manage fear”. Once people become financially educated, they still face some obstacles to become rich. In particular, Robert Kiyosaki enumerates 5 obstacles: 1) fear, 2) cynicism, 3) laziness, 4) bad habits and 5) arrogance. Robert Kiyosaki explores all these obstacles, one by one. Regarding fear, Kiyosaki says that everyone fears to lose money. Rich dad recommended Kiyosaki to think like a Texan when it comes to fearing losing money: they think big, and they’re proud when they win and brag when they lose. Rich dad also said that the greatest reason for lack of financial success was playing too safe. “People are so afraid of losing that they lose”, rich dad said. Kiyosaki leaves another bold claim: “for most people, the reason they don’t win financially is because the pain of losing money is far greater than the joy of being rich”. In essence, they play not to lose, not to win. Balanced portfolios are fine if you have to lose, but make sure you start early.

The second obstacle is cynicism. Kiyosaki uses the story of the Chicken Little to illustrate that we all have doubts, or noise, as Kiyosaki calls it. It can come from within or for the outside. A savvy investor has to know how to make money even in bad times. Kiyosaki tells the story of a friend who backed out on a deal Kiyosaki and his wife had arranged. Another example is tax-lien certificates, which Kiyosaki keeps a portion of his money in, and people often evaluate as “risky” even without investing in them. As rich dad said, “cynics never win”. They criticize, and winners analyze. At the end of this section, a motivational story is provided: Colonel Sanders lost his business at age 66 and started to live off a Social Security check. He went around the country and over more than a thousand rejections, he finally became a multi-millionaire, after selling his fried chicken recipe.

A “little greed” is the solution to laziness, the third obstacle. Although we are raised thinking of greed as bad, as Kiyosaki reports, that greed is what really makes us tend laziness off. Again, he relates this greed with the reactions of both dads to Kiyosaki’s asks, when he was younger. While the poor dad use to say “I can’t afford it”, rich dad use to say “how can I afford it?”, opening up possibilities and excitement. When Kiyosaki wanted to quick the rat race, he questioned himself and thought about how would his life be if he didn’t have to work again. Our lives are a reflection of our habits more than our education. An example of a good habit preached by the rich dad was to pay himself first, and bills last. This motivated him to deliver: if he could not pay his creditors, he was forced to find additional sources of income.

Arrogance is the last obstacle. Rich dad lost money whenever he was arrogant. People are arrogant to hide ignorance. If you’re arrogant in a subject, start educating yourself by finding an expert or reading a book.

Chapter 8: Getting started
This chapter lists 10 things to start improving your financial life. First, find a reason to succeed. Kiyosaki mentions the example of a young woman who had dreams of swimming for the US Olympic team. She used to wake up very early to practice, among many other sacrifices she used to go through. She said it was due to love because she did that for herself and the people she loved. Two, make good daily choices. Kiyosaki explains that we have the power of choosing what we want. He takes courses, listens to CDs and what not. Essentially, he invests a lot in his financial education, which he considers crucial to succeed. Arrogance, on the other hand, impedes you from listening and learning and will get you nowhere. Three, choose friends carefully. Be friends with people you can learn from, don’t listen to the Chicken Littles. If possible, get access to legal insider trading.
Four, master a formula and learn quickly. Kiyosaki explains that in a fast-changing world, it’s often not what you know, but how quickly you can learn that makes the difference. Five, pay yourself first and master self-discipline. Kiyosaki argues that self-discipline is the biggest difference between the rich and the poor. Six, pay your brokers well. In general, Kiyosaki argues that you’ll have a better service (aka make more money) if you do pay them well. If you cut on their commissions – why would they want to help you?

Seven, be an Indian giver: ask yourself how quickly you get your money back. Look at the ROI, but not only that. They also look at what you get for free in deals too. Eight, use assets to buy luxuries. When you desire something, use your assets to pay for it. If you get $10.000 as a gift, you can either use that money to make more money and pay for what you want, or you can get yourself into further debt if you use that as a down-payment for something else. Nine, have your own heroes, people who inspire you. It will make investing a lot easier. The latest advice is about the power of giving: teach and you should receive.

The Richest Man In Babylon Summary

The Richest Man In Babylon gives common sense financial advice, which you can apply today, told through tales and parables from the times of ancient Babylon.

George S. Clason was a soldier, businessman and writer. The Richest Man In Babylon is his most popular piece of work, consisting of numerous parables, metaphors and stories set in ancient Babylon.

Originally published in 1926, the advice in this book is still as sound as it was almost a century ago.

The Babylonians discovered many of the basic principles behind wealth, such as saving a small part of your income each month, investing it wisely, learning how to lend money instead of borrowing it and how to protect your wealth.

Here are 3 lessons that you can apply right now to start building wealth:

Lesson 1: Live below your means.
Lesson 2: Learn how to be lucky by working hard.
Lesson 3: Never take on debt.

Ready to become the richest man (or woman) in Babylon? Let’s go!

Lesson 1: Live below your means.

What is it that makes rich people rich?

I’m not talking about the kids of millionaires or oil sheiks, who’ve always been rich.

I’m talking about the people who, after working hard for a few decades, can walk out the door of their job and never return again, because they can live off the wealth they have accumulated.

Do they stuff every penny they earn into their mattress? Or do they just work abnormal hours no one can keep up with?

The truth is in the middle.

Wealthy people develop their riches mostly based on 2 things:

Living slightly below their means.
Investing the money they save well.
Living below your means is the first checkpoint you have to pass to even have the money to invest, so why not start there?

The goal of our Western economy and education system is for you to take on a 40-hour day job and then spend everything you earn.

But nobody said you have to play that game.

You don’t have to stop drinking the occasional Latte or going to the movies. But you can still spend less than you earn.

You know best where you’re spending money just for the sake of convenience, entertainment and gratification, that’s really not necessary and that’s exactly the money you should be saving and investing instead.

The Richest Man In Babylon suggests you save 10% of your income to invest.

I personally have been saving 20% of my income for the past year and it’s put me in a much more relaxed situation financially where I have some savings and even a small portfolio of stocks.

So look at your expenses and cut the ones that are really unnecessary and you’ll see finding those 10% is easier than you think!

Lesson 2: Learn how to be lucky by working hard.

The summary intro said “learn how to be lucky”. What a fascinating idea, isn’t it?

But how can this book teach you something that’s really not in your hands?

This is where most people are mistaken. No one ever said luck was something that can’t be manufactured. We just expect it to be.

That’s something called chance. A random occurrence with very little likelihood of happening, such as winning the lottery or being struck by lightning.

Luck, however, is based on opportunity and you can create more opportunities by working hard.

Consider Jerry Weintraub’s story.

This man called Elvis’s manager every day for a year to pitch him a tour he wanted to take Elvis on.

364 times, the man said ‘No’. But eventually, on the 365th day, he said yes.

Jerry didn’t get lucky. He worked. Every day he called, until the timing was right and the opportunity presented itself to him.

That’s how you become lucky.

Lesson 3: Never take on debt.

This should (in theory) be a no-brainer for anyone, yet we find ourselves in a world where the average American is over $150,000 in debt.

One of the first steps to build wealth is quitting the irrational self-talk that makes you justify purchases you can’t afford.

Money is a pretty rational thing and it’s about time you started treating it that way.

When you can’t afford a fancy new car, or a flashy TV, well, you can’t afford it.

But when you go out and get a loan to finance it, you’ll delay your journey to wealth for months or even years, because you now have to spend the money you save each month to pay off the debt, instead of being able to invest it.

Instead of solving your problems with loans, ask “how can I afford this?” and figure out ways to make more money or save more money, so you can buy the things you want.

Taking on debt has never solved any problems, it just creates more, so finish the spending spree and start saving!

My personal take-aways
The sad part first: the summary only includes one parable from the book. However, on the plus side, Blinkist did a really great job of extracting the financial advice in it, adapting it to modern times and making it clear.

They take their job of providing “non-fiction book summaries” seriously, so naturally, most of the fiction had to go.

You can read both the summary and the book quite independently from one another. The summary has the distilled financial tips, the book conveys the points in a longer, but maybe stronger way, because they’re wrapped into amazing stories.

I’ve read some of the parables in the book (you can read them individually) and I like both, so two thumbs up here!

What else can you learn from the blinks?
Why you should never give money to a lumberjack (unless he wants to start a tree felling business)
What Socrates can teach you about the financial crisis of 2008 (it could’ve been avoided with his tip)
Which scientific method of making progress you must use to build wealth
The difference between making money and attaining wealth
How to become a lender and why money gets better at working for you over time
Which boy scout motto you have to live by if you want to reap the most of the luck you create
Who would I recommend The Richest Man In Babylon summary to?
The 21 year old on his first corporate job, who’s happily spending his income every month, the 45 year old who’s taken on a loan or two to finance luxury purchases, and anyone who buys lottery tickets on a regular basis.

Don't put off to tomorrow what you can do today! - K.Karthik Raja Collections

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