Recommended Reading Rich Dad Poor Dad

First of all, sorry about not writing anything last week. I was still working on finishing off our new home office, and it took a little longer than expected. My son has had a cold for the last two weeks, so we have not been getting very much sleep.

First book I would recommend anyone to read is

Robert T. Kiyosaki’s Rich Dad Poor Dad.

First time I read this book, I recognised my father in both the Rich Dad aspect, and the Poor Dad aspect of the book.

While my dad has Rich Dads aspect to how you spend money, he also had Poor Dads aspect on how to earn the money.

The short of it is basically that the way that most of us are brought up (Poor Dad) is to value education, and to strive for a good education, in order to get a good job, as with a good job normally follows a good income. Promotions are good, as they increase the income. The only problem with Poor Dad is that with the increased income, all the expenses also increase, and as long as the expenses increase at the same rate or faster than the incomes, you will stay poor, or get poorer.

The aim on the Rich Dads side is instead the following:
1. Don’t work for money.
2. Get financialy literate.
3. Mind your own business (i.e. run your own company).
4. Taxes and corporations.
5. Rich people invent money.
6. Work to Learn – Don’t work for money.

So, what can you learn from the book?

First and most important thing you learn is about emotions (fear and greed), and using intelligence when it comes to money, rather than emotions.

Second thing you learn is about assets and liabilities, and the difference between them. Crucial if you want to ever get Rich.

Financial literacy, and cash flow. This part is very much about why most of us, eventhough our incomes go up don’t get a better life.

I highly recommend this book as a book to start with on your way to financial freedom.

I will try to advice on more books in the near future.

“Fredrik Sohlberg is a participant in the Amazon Europe S.à.r.l. Associates Programme, an affiliate advertising programme designed to provide a means for sites to earn advertising fees by advertising and linking to amazon.co.uk/Javari.co.uk.”

What is the secret behind riches, and people who get rich?

Actually, there is not that much of a secret, but all advertising we are surrounded by daily works to break down the barriers to your wealth and fortune, and encourage us to spend it, rather than save it.

This is what actually keeps a majority of people from getting rich. Instant gratification. Buy now, pay later. All of the eighties, and nineties was all about buy now, pay later.

Our neighbour changes their car for a new one, and all of a sudden we feel inferious and want a new car yourself. If only we had the patience to wait until our passive income could grant us all that, without putting us further into dept.

Of cause I would want that new car as well, but I have realised that I will have to wait on some of those dreams, until I can affoard to fulfill them.

What am I doing then?

  • Cutting my spending. Trying to spend less on things I don’t need, and keep putting money into savings (how I save, and invest is something I will come to later).
  • Increasing my income. In my case it is not through work, but through the work I am doing for myself when not at the office. Actually this blog is part of that, eventhough it might not bring me a fortune anytime soon, and right now only costs me money.
  • Investing wisely. That means that I don’t keep my money in my savings account, but I try to find other ways that can make my money grow faster. Right now my investments include Wine, Stocks & Shares, and Fixed Income Instruments. I plan on moving on to Property at a later stage, but for now I am happy with what I am currently doing.

Next post will be related to earnings and spending, and how to make your income stretch longer.

/Fredrik