An absolute classic as Robert comes to terms with money and the difference between the poor, middle and rich. A simple guide with tools such as the cashflow quadrant and difference in mindset between the different classes would definitely come in handy for those aspiring to attain financial freedom.
- Poor mindset = Believes that the love of money is the root of all evil, does not take risks, does not have multiple sources of income. Rich mindset = Believes that the lack of money is the root of all evil, takes and manages risks, have multiple streams of income (passive and active).
- Know the difference between assets and liabilities.
- “It is not important how much money you make; it is how much money you keep.”
- Do not depend only on a salaried job or a single income source, else you would continue working for someone for your entire life.
- Sources of passive income: Business profits, Dividends from stocks, Interest payments as an investor, Rent, Royalties etc.
- Learn to minimise taxes
- Making full use of your time, everyone has a fixed amount of time daily, do not let it go to waste on unproductive tasks.
- Work to learn, don’t work solely for the money if possible. Learn useful skills such as public relations, interpersonal skills, marketing, sales etc.
- Do not to be afraid to take a second job when you are young without commitments, especially if it allows you to learn more.
- “The one thing that holds most of us back is our self-doubt.”
- Apart from academic results, soft skills such as perseverance, willingness to work hard and a constant openness to learning might be worth more than just good grades.
- In school, most of us learn by memorising predetermined answers for predetermined questions, however, in the real world, you learn based on the answers that you seek.
- Five obstacles to Financial Independence: Fear, Cynicism, Laziness, Bad Habits and Arrogance.
- Common excuses from a poor mindset:” I ‘can’t afford it”, “I’ll never be wealthy”, “Investing is risky”, “I’m not interested in money.”
- “Greatness is not a function of circumstance; it is largely a matter of conscious choice.”
- The power of association: “A man only learns in two ways, one by reading and the other by association with smarter people.”
- The power of learning quickly: “He is most original who adapts from the most sources.”
- Self-discipline: Suffer the pain of discipline or suffer the pain of regret. (Applicable in our daily lives, e.g., self-discipline to save a fixed percentage of our paycheck every month, regularly exercising etc.)
- “Many receive advice, only the wise profit from it.”
- “Action beats inaction. Think and take action.”
Hope you’ve found this book summary useful!