Second Lesson Rich Dad example essay topic

A true tale of two dads, one dad is a highly educated professor, the other, an eighth grade dropout. The educated dad left his family with nothing, except a few unpaid bills. The dropout later became one of Hawaii's richest men and left his son a fortune. The educated dad would say, "I can't afford it" while the other, asked, "How can I afford it?" Rich dad teaches the boys priceless lessons on money, by making them learn through experience. The most important lesson he teaches is to free yourself from the "rat race" of life and learn to make money work for you, and not be its slave. He knew that financial literacy would help prepare the boys for their life.

Though one must have a job, Rich Dad taught the boys to eventually use your day job to begin minding your own business. The first lesson the two boys learned was that the rich do not work for money. One should work to learn, not make money. At age 9, Robert Kiyosaki and his best friend Mike asked Mike's father to teach them how to make money. After 3 weeks of dusting cans in one of Rich Dad's convenience stores at 10 cents a week, Kiyosaki was ready to quit. Rich Dad pointed out this is exactly what his employees sounded like.

Some people quit a job because it doesn't pay well. Others see it as an opportunity to learn something new. Next Rich Dad put the two boys to work, this time for nothing. Doing this forced them to think up a source of income, a business scheme. The opportunity came to them upon noticing discarded comic books in the store. The first business plan was hatched.

The boys opened a comic book library and employed Mike's sister at 1$ a week to mind it. Soon they were earning $9.50 a week without having to physically run the library, while kids read as much comics as they could in two hours after school for only a few cents. The second lesson Rich Dad taught the two boys was the importance of financial literacy. The growing gap between rich and poor is rooted in the old-fashioned educational system.

The system trains people to be good employees, and not employers. The obsolete school system also fails to provide young people with basic financial skills rich people use to grow their wealth. Rich Dad also gave the two boys advice of how to get out of the "rat race". He taught them to first understand the difference between an asset and a liability.

Assets would be real estate, stocks, bonds, and intellectual property. Liabilities are thins like mortgages, consumer loans, and credit cards. The poor have day-to-day expenses, the middle class purchase liabilities that they think are assets (i. e., a home or a car), and the rich build a solid base of income-generating assets. The middle class finds itself in a constant state of financial struggle. Their primary income is wages, as wages increase, so do their taxes.

Expenses increase as wages increase. Hence the phrase "the rat race". They treat their home as their primary asset instead of investing in income-generating assets. The rich get richer because they keep acquiring more assets and investments to generate more income, which far exceeds their expenses.

Rich Dad also taught the boys that you should use your earnings to start your own business. Kiyosaki sold photocopiers on commission at Xerox. With his earnings he purchased real estate. In 3 years' time his real estate income was far greater than his earnings at Xerox.

He then left the company to mind his own business full time. He knew that in order to get out of the rat race fast, he needed to work harder, sell more copiers and mind his own business.