This new release from Robert Kiyosaki was one of his best yet. He has been known to provide timely information in his books to help people understand what is truly happening in the economy at that moment and the bigger picture of what is to come. This book goes into a little more detail than many previous books. He gives specific examples of some of the investments he makes and then goes over the principles he follows that led him to make those investments. The first part of the book is a lot of review from his best-selling books Rich Dad, Poor Dad and The Cashflow Quadrant but it is good review. Here are some great nuggets that I was able to get out of the book:
Education:
· Schools change to slowly and the world is changing rapidly.
· There needs to be three types of education: Academic, Professional, and Financial.
Financial Education:
· If a person knows the tax laws they will not have to pay unnecessary taxes.
· There are three types of legal income: Earned income, Portfolio income, and Passive income.
· The most important investment you make is first investing in your financial education before you invest in an asset.
· Investors must know the difference between investing for capital gains and investing for cashflow.
Having a Plan:
· First, sit down together with your spouse and make a list of the most important financial goals for both of you.
· Second, study and learn together what you need to do to achieve those goals.
· Third, go out together and apply what you learned to attain those goals.
Other:
· Residential real estate is only as valuable as the jobs in the area, so only invest where there are stable jobs.
· Real estate can give you benefits through depreciation, amortization, and through appreciation in value.
· The three objectives he has when investing are: Getting his money back out in one to three years, move his money to another investment, and have ownership and long-term cashflow from the initial investment. He goes into detail on how to achieve this all while paying little to no taxes. Because taxes are your single largest expense, figure out how to lower them legally.
· Risk is related to control. Less control means you take on more risk.
· Using debt to buy assets that generate positive cashflow can make you very wealthy, using debt to buy liabilities that do not make cashflow for you can make you very poor.
· There are four different asset classes: Business, Real Estate, Paper Assets, and Commodities.
· Use assets to buy liabilities. Rather than live below our means, we should expand our means by focusing on the asset column as a balance sheet.
· Today all money is debt and is rapidly being devalued with more national debt.
· Investors do not park their money anymore, they move their money, and this is called the “Velocity of money”.
I highly recommend this book to everyone that is interested in how to survive and thrive financially in the future. If you have read this book also leave a comment on what you thought of it.
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