Ten Decisions You Need to Make to Get Rich
Today, because of the multitude of choices we all have, it is easy to get distracted from where we want to go in life. I offer you a few suggestions on how to find your path and stay on your path to great wealth, if you should choose to do so. One night in 1975, I sat in my little apartment and began to choose the path I was now to take. I had to again decide which dad’s path I would follow, my rich dad’s or my poor dad’s. I had been off track for 10 years and it was now time to get back on track. These are some of the decisions I made and have continued to make over the years.
Step One: Decide to Be Rich
That night in 1975, I had to stop feeling sorry for myself and decide again to be rich. I went over some of the lessons my rich dad had given me – lessons that were more important than money, because they would ultimately create the financial empire I wanted. I sat quietly that night and my lessons began all over again. I could hear my rich dad talking. “The only difference between the rich, poor and middle class,” he said, “is the kind of lifestyle they want. You don’t have to be psychic to tell a person’s future. If you listen to the words a person uses, they will tell you their future.”
Rich Dad believed that words were a person’s most important tool. He constantly reminded me to watch the words I spoke, simply because he believed that the words you speak and the words you think ultimately become the world you live in. He often quoted the Old Testament: “And the word became flesh”. So that night, I remembered Rich Dad reminding me to listen to different people’s words. I noticed that poor people often said:
“I just want enough money to pay the rent.”
“I need a few dollars to get to the next pay day.”
“After I pay my bills, I don’t know how my family can afford to eat.”
People who used words such as these, often focused only on financial survival. Rich Dad often referred to these people as “poor” people, because they were poor managers of money. So a person who thought or spoke words such as these was constantly fighting for financial survival, regardless of how much money they made. The middle class used different words because they had different ideas about how to use their money:
“Our home is our most important asset and our largest single investment.”
“We’re setting a few dollars aside every month, so we can afford the down payment on our dream home.”
“We’re saving money for our children’s college education and our retirement.”
I noticed that the middle class focused on comfort. That is why so many of them say, “I don’t want to be rich. I just want to be comfortable.”
That night, I recalled the words my rich dad’s rich friends used:
“How did you finance your shopping centre? Did you syndicate it with a joint venture partnership or did you go to a hard money lender for the interim money?”
“My underwriter has a new private placement, pre-IPO offering. Do you want a position in it?”
“I bought the shares through my corporation because the long-term tax consequences are better.”
The rich used the vocabulary found in the asset column. Rich Dad said, “The rich are rich because they are not focused on day-to-day short-term survival, or the expense column as the poor are. Nor are the rich focused on comfort and the acquisition of liabilities using credit, as the middle class is. The rich are rich because they focus on the long-term acquisition of assets…assets such as stocks, bonds, businesses and income producing real estate. Many times the rich will forsake meals, a steady pay cheque, a vacation, or the comfort of a nice home, to build or acquire real assets.”
So decide to be rich, even if you are broke and penniless today. In Rich Dad Poor Dad, I wrote of the difference between being poor and being broke. Poor is a state of mind where thoughts such as “I can’t afford it” or “Live below your means” come from. Being poor is eternal but being broke is temporary. The opening chapter of The CASHFLOW Quadrant is called, “Why Don’t You Get a Job?” It begins with my wife Kim and I being homeless for about 3 weeks. Even though we were virtually out of money, we continued to strive to become rich, to build a business and invest through that business. Today, even though we have plenty of money and several businesses, nothing much has changed. We continue to build businesses, reinvest in our businesses and invest through those businesses.
In The CASHFLOW Quadrant, I wrote about Be-Do-Have. “Be” is the most important part of the three word formula. Most people want to “Have” what the rich have, but they often are not willing to do what the rich “Do” to have what the rich “Have”. So whether you have money or not, it is important to “Be” rich if you decide to do so, which means being willing to make being rich more important than merely surviving financially or being comfortable.
Step Two: Decide What Kind of Money Problems You Want
There are only two kinds of money problems: not enough money or too much money. Unfortunately, the kind of money problem most people know is not enough money.
Rich Dad stressed that his son Mike and I know not only how to make money but what to do with the money we made. Rich Dad said, “Most people know how to work for money, but they do not know how to have people and money work for them.” So he taught us how to plan on having too much money. He said, “If you want to be rich, you must make sure your excess money creates more excess money. You must know what to do with your excess money before it gets to you. Most people, when they receive any excess money, spend it foolishly or just park it in the bank.”
So decide what kind of money problems you want.
Step Three: Write Your Plan and Follow It
After choosing between being rich, poor or middle class, and then choosing between too much money or too little money, it’s time to write your plan.
If you have chosen to be rich, even though you are broke today, and have decided to have the problem of too much money, read on. If you do not plan to be rich or to have too much money, then you need not read any further.
Rich Dad’s plan started with a few basic goals:
Change the characteristic of your income. Start a part-time business.
Change the characteristic of your expenses. Convert personal expenses into business expenses.
Place your business inside a legal entity.
Have your business buy your assets.
Harness the power of reinvesting.
If you’re willing to be a little uncomfortable to become very rich and retire early, develop your plan — even though you may be broke, but not poor, today. And if you are already rich, Rich Dad’s plan may help you become richer and happier…even beyond your wildest dreams.
Authors Details: Robert Kiyosaki Web Site