By Abhishek Thakore May 2003 Wondering why there`s never enough, no matter how much you earn? Robert Kiyosaki, bestselling author of Rich Dad, Poor Dad, tells you what you`re doing wrong and how you can put it right What if someone were to tell you that you have been managing your money wrong all the time? That your house is your biggest liability? Your net worth is a fraction of what you perceive? Your wealth is measured in time, not money? You`d probably dismiss the person as a financial illiterate. But this person says all this and much more about money. And the world listens to him with awe and respect. Meet the latest New Age abundance guru on the block-Robert Kiyosaki. Having authored bestselling books such as Rich Dad, Poor Dad; Cashflow Quadrant; Rich Dad`s Guide to Investing; Rich Kid, Smart Kid and Retire Young, Retire Rich, Kiyosaki has become a phenomenon in the world of finance and abundance. Check his website (www.richdad.com) and you`ll find him speaking all around the globe to packed audiences. Given his mission of ‘elevating the financial well-being of mankind’, he surely seems to be living it to the fullest. The Making of a Guru Born and raised in Hawaii, Kiyosaki is a fourth-generation Japanese-American. After graduating from college in New York, he joined the Marine Corps and served in Vietnam. After the war, he worked at Xerox Corporation in sales. Selling, according to Kiyosaki, is one of the most important skills one must learn. In an incident in his book, he says that an interviewing journalist asked for tips on becoming a great writer. ‘Learn to sell,’ Kiyosaki said. The journalist was peeved-here was a writer asking her to be a mere salesperson! Sensing her agitation, Kiyosaki picked one of his books and pointed at the phrase `Bestselling Author`. It was not `Best Writing Author`! This stark focus on the bottomline characterizes the man who is now teaching financial literacy to millions. In 1977, Kiyosaki started a company that brought the first nylon Velcro `surfer wallets` to market. In 1985, he founded an international education company that taught business and investment to tens of thousands of students throughout the world. In 1994, Kiyosaki sold his business and retired at the age of 47. It was then that he collaborated with Sharon Lechter to write the Rich Dad series, all of which earned spots on bestseller lists. How to Make Money ‘The poor work for money. The rich make money work for them,’ says the financial guru. The concepts of financial education are presented in a fascinating story. As a youngster, Kiyosaki was caught between two dads. One was his real dad, a strong believer in job security, paychecks, traditional education and working for the government. Kiyosaki calls him the Poor Dad, because he could never be financially free. The Rich Dad was Robert`s friend`s dad who mentored him. He believed in owning businesses, taking risks and was a true entrepreneur. In following the principles of the Rich Dad, Kiyosaki unlocked intriguing financial secrets. Kiyosaki starts with a definition of wealth. Imagine stopping work completely – all your direct income stops. Given your current living standards, how long will you be able to live before you go broke? This, according to Kiyosaki, is wealth. So, if I have Rs 30,000 in savings and an expense of Rs 10,000 per month, my wealth is three months. ‘It is not how much you make that counts, it`s how much you keep,’ says Kiyosaki. Next is his simple definition of an asset and a liability. ‘What puts money in your pocket is an asset. What takes out money is a liability.’ A car may appear to be an asset in your net worth, but the expenses you incur for maintenance and repair may tilt it to the side of a liability. On the other hand, renting out a plot you own would qualify as a real asset. The key word here is cashflow – or the amount of money that ultimately flows in and out of your pocket. By this definition, Kiyosaki explains that your house is a liability since you incur a number of expenses around it. This is even truer when you take a loan to buy it. You are paying maintenance, electricity, taxes and interest-which means that a larger house will only mean larger bills. Confusing? The final shock is the net worth. Though you evaluate your net worth on the basis of the market cost, it is worth much less when you actually liquidate. This is simply because you are the seller, and generally the situation is desperate. So net worth is a mere farce. Rich v/s Poor The rich use their money to acquire real assets – which could be shares, stocks, intellectual property, maybe even businesses. These in turn generate a positive cash flow, which help them fund other expenses. They increase this base till a point when their passive income (income that comes without actual work) overtakes their expenses. This is the point where you gain what Kiyosaki calls `financial freedom`. In stark contrast, the lower class ends up spending all it has, and never builds the real base of assets that will give it passive income. Thus, the poor continue to stay poor. The most interesting cash flow is that of the middle class, whose upward mobility drives them to acquire what Kiyosaki calls `doodads` – gadgets that they don`t need and though apparently assets, are actually liabilities. What the rich do differently is to use their incomes to buy assets and fund the doodads from the income of these assets. The middle class gets caught in a rat race-more expenses, more bills, bigger house, even more bills, so even more hard work, so even more taxes and so on. The only way to break free from this is to gain control of your finances and debt, and manage your cash flow. Just do It! So where do you get started? Kiyosaki has invented a game-Cashflow 101 – which teaches players these basic concepts. It has become a rage worldwide, as Cashflow Clubs are playing it over and over to wire these principles in their mind. Cashflow 202 goes a step further, with technical aspects of investing in the stock market, where each one of us has lost some money! Cashflow for Kids helps children understand money, which, according to Kiyosaki, is essential. He says that financial literacy can begin as early as 10 years, and has to necessarily be provided by parents since our current education system ignores something as important as money. Beyond the Rich Dad books and tapes are the Rich Dad`s Advisers. These are associates who specialise in specific areas, such as selling, intellectual property and legal advice. Among the Rich Dad series itself, the 500-page Rich Dad`s Guide to Investing makes delightful reading. Free articles and audio downloads are available on the website too. Thinking Local How relevant is all this in India? ‘Though all of what is given doesn`t apply to India, Kiyosaki`s principles are sound and can be applied,’ says Purshottam T, a Mumbai-based chartered accountant. ‘India faces unique challenges like corruption and politics, no respect for intellectual property and high taxes. So even though it is a different ball game here, knowledge of his principles is definitely a must.’ Umang Desai, an aspiring financial manager, however, has reservations about its relevance. ‘Initially, I was enthusiastic about the ideas that Kiyosaki presented. But when you look at the Indian context, we cannot apply everything that`s written. Even stock markets are not safe here.’ Adds Vinod Sreedhar, an alternative lifestyler: ‘Even though little of Kiyosaki`s techniques might be applicable in India, his basic principles about money remain the same. I now measure my wealth in terms of time, and that helps me plan how I should earn and manage my money.’ Sreedhar read Kiyosaki`s books a few years ago, and has been following them ever since. But why be financially free? ‘It`s more about freedom than money – and that is a very appealing thing about his work. When you realize that money buys you freedom to do what you want, you know its importance,’ says Sreedhar. It is true that money itself is not the source of enjoyment. But it gives you freedom-the freedom to do what you really want. In a society where the majority work for money and are not guided by their dharma (or unique talent), financial freedom gives you time to do your own thing, such as being able to afford participating in the latest workshop of a New Age guru. Abundance definitely gives you the power to choose. Beyond this, Kiyosaki insists that giving is equally important. His Foundation for Financial Literacy provides financial assistance to groups committed to spreading financial awareness in the society. And once you are financially free, Kiyosaki urges you to share your knowledge and wealth with the needy. As more and more people begin to do this, we shall move towards a world where there is more abundance-which is shared by all, more financial literacy, and finally perhaps to a utopia, where money becomes an urban legend and all exchanges are based on trust. Kiyosaki`s theory may be perfect for achieveing material aspirations, but questions regarding satisfaction and contentment do pop up in the seeker`s mind. However, Kiyosaki`s message has more than a material layer. Says Sreedhar: ‘Kiyosaki uses money as a starting point to talk about a lot of things, such as risk taking, thinking outside your paradigm. And that message is relevant to all seekers of growth.’
Life Positive follows a stringent review publishing mechanism. Every review received undergoes -
Only after we're satisfied about the authenticity of a review is it allowed to go live on our website
Our award winning customer care team is available from 9 a.m to 9 p.m everyday
All our healers and therapists undergo training and/or certification from authorized bodies before becoming professionals. They have a minimum professional experience of one year
All our healers and therapists are genuinely passionate about doing service. They do their very best to help seekers (patients) live better lives.
All payments made to our healers are secure up to the point wherein if any session is paid for, it will be honoured dutifully and delivered promptly
Every seekers (patients) details will always remain 100% confidential and will never be disclosed