Resolutions

This year, for my New Year’s Resolution, I vowed to lose 10 kilograms and to improve my financial situation. Over the past two months, I have exercised diligently and have recently begun to lose weight. At my current pace, I feel like my weight loss goals for this year are very achievable. I only need to continue the habits that I have begun to develop and adjust them as I go.

My financial goals, on the other hand, are nowhere near being realized. And one of the reasons they are nowhere near being realized is because I haven’t specifically stated what my goals are, nor made any plans to achieve them. To be perfectly honest, I know next to nothing about finance and I don’t know what the best way to move forward is, but for my first step, I am going to read the book Rich Dad, Poor Dad by Robert Kiyosaki.

I’m sure there are probably better places to begin, but I am choosing to start with this book because I have seen it recommended over and over again in countless places and by countless people. I’m also going to start here because I want to start from the absolute beginning.

If you would like to join me, or if you have read this book before and would like to discuss it with me, please respond to the following writing prompts and questions either in the comments of this post, or by writing your own post and sharing the link to your post in the comments below.

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Chapter One: The Rich Don’t Work for Money

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The following quotes have been taken from the study session of the first chapter of Rich Dad, Poor Dad and form the foundation of the discussion points for this chapter. These quotes are not meant to be debated, which means that you are not supposed to agree or disagree with them. Rather, their meaning is supposed to be explored. What does Robert Kiyosaki mean by these statements.

I have written my thoughts about each of these quotes. If you would like to join me, please look at the following statements first and formulate your own thoughts/responses to them before reading the ones I have written. Feel free to either leave your thoughts in the comments below, or turn your reactions into a post and share the link with me here.

Quotations

1. The poor and the middle class work for money. The rich have money work for them.
2. Life pushes all of us around. Some people give up and others fight. A few learn the lesson and move on. They welcome life pushing them around.
3. Stop blaming me and thinking I’m the problem. If you think I’m the problem, then you have to change me. If you realize that you’re the problem, then you can change yourself, learn something, and grow wiser.
4. When it comes to money, most people want to play it safe and feel secure. So passion does not direct them. Fear does.
5. Most people, given more money, only get into more debt.
6. It’s fear that keeps most people working at a job: the fear of not paying their bills, the fear of being fired, the fear of not having enough money, and the fear of starting over. That’s the price of studying to learn a profession or trade, and then working for money. Most people become a slave to money—and then get angry at their boss.
7. Most people do not know that it’s their emotions that are doing the thinking.
8. A job is really a short-term solution to a long-term problem.
9. It’s just like the picture of a donkey dragging a cart with its owner dangling a carrot just in front of its nose. The donkey’s owner may be going where he wants to, but the donkey is chasing an illusion. Tomorrow there will only be another carrot for the donkey.

My Responses

1. The poor and the middle class work for money. The rich have money work for them.

Kiyosaki means that the rich use money to produce more money. He is saying that the rich take the money that they have and use it in a way that produces more money for them. Sometimes this requires work, sometimes it doesn’t. Sometimes it requires work in the beginning and becomes automated later. The main point is that Kiyosaki isn’t saying that the rich don’t work. He is simply saying that the rich put their money to work, which means that the money they have makes more money for them. Or, said in another way, the rich work to use the money they have in a way that produces more money whereas the poor simply work to get money so that they have something buy things with, things that don’t produce more money. The rich buy things that give back. The poor buy things that don’t produce any returns.

2. Life pushes all of us around. Some people give up and others fight. A few learn the lesson and move on. They welcome life pushing them around.

I feel like the meaning of this quote lies buried in the second half of it. When Kiyosaki talks about some people giving up and others fighting, he is just talking about how people react to their emotions (which he has said isn’t a good thing). Whether people give up or fight is neither here nor there. The fighters are probably fighting the wrong thing and just wasting their energy. They may seem heroic, but really, they are just being fools and aren’t thinking their way out of a difficult situation.

The few who learn and move on are the ones have had their eyes opened to something that they didn’t see before. They learned a new way of seeing and interacting with the world. The lessons that are being talked about here aren’t simple. They are large and transformative, possibly even life changing, and because of their magnitude, these people welcome the pushes and the challenges that life brings. They learn to want to see the world in a way that most people don’t, and they know that the best way to do so is to think themselves out of difficult situations.

3. Stop blaming me and thinking I’m the problem. If you think I’m the problem, then you have to change me. If you realize that you’re the problem, then you can change yourself, learn something, and grow wiser.

I feel like this quote is less about problems and more about the idea that nobody is making us do things that we don’t want to do. Nobody is making us go to jobs that we don’t like. Nobody is forcing us to work for less money than we want to make. Nobody is keeping us from taking the chances we are always thinking about. The only person who is keeping us from anything is ourselves. We are making a choice for one reason or another. And the sooner we realize that, the better. The sooner we realize that we are the ones holding ourselves back, the quicker we can begin to effectively analyze the reasons why we are holding ourselves back and come up with solutions to free ourselves.

4. When it comes to money, most people want to play it safe and feel secure. So passion does not direct them. Fear does.

Everyone wants to have more money. If they don’t want to be rich, they want to be comfortable, which is another way of saying that they want to be able to not worry about money.

Many people have the idea that passion doesn’t produce money. People often think that passion just costs money. Many people also think that money is hard to make, and since it is hard to make, it’s not something that they want to lose or risk losing. It is this fear of losing their money, losing that which they worked so hard to gain that convinces them to play it safe. When people aren’t losing money, they tend to feel secure (at least in the sense that they aren’t scared, worried, or panicked). In that sense, their fear of losing money is directing their thoughts. Maybe they could use their money in a better way, but if they can’t hold it, count it, see it, or guarantee that it won’t be lost, they often don’t use their money in the way that would benefit them the most.

5. Most people, given more money, only get into more debt.

I think this quote speaks to the idea that most people spend more money than they have, and that they tend to borrow an amount in proportion to the amount of money they either make in a year or that they have in savings. If a person has more money, he/she will borrow in the same proportion that he/she borrowed before, which means that his/her debt will increase because he/she has more money to borrow against. Rather than use an increase in revenue to invest in assets that produce more money, and rather than pay off existing debts and just be comfortable, a sense of want and entitlement takes over and many people, when given more money, tend to borrow more instead of less.

6. It’s fear that keeps most people working at a job: the fear of not paying their bills, the fear of being fired, the fear of not having enough money, and the fear of starting over. That’s the price of studying to learn a profession or trade, and then working for money. Most people become a slave to money—and then get angry at their boss.

This quote speaks to the idea that if you don’t have any value producing assets, every minute that you aren’t at work, you are either not making any money or you are losing money (because, most likely, you are spending money). As a result, many of us would take a big financial hit by quitting our jobs and searching for something to do that is more meaningful to or beneficial for us. Maybe we don’t want to continue what we are doing, but if we stop doing what we are doing, our money flow stops and it is that fear, the fear of the money disappearing that keeps us doing what we do day after day.

7. Most people do not know that it’s their emotions that are doing the thinking.

Here, Kiyosaki is saying that people often don’t realize that they are the root cause of many of the things that are happening to them. Rather than say, why am I putting myself in this situation where I allow myself to get mad about the things that are happening to me and around me, they view what is happening to them as a chain of events which they have no control over. They then react emotionally to that chain of events. Put more simply, people don’t realize there are questions they can be asking to help them deal with the situations they are reacting to emotionally, so they don’t think, they just allow their thoughts to follow whatever it is that they are feeling.

8. A job is really a short-term solution to a long-term problem.

The long-term problem is that people need money for the duration of their lives. Ideally, people will have enough money to live a lifetime without working because they must work to pay their bills. The paychecks from most jobs don’t produce this kind of money, so, in that sense, jobs are just short-term solutions. Most jobs give people enough money to pay their bills until the next week or month. After that, many people are broke again. Most jobs don’t address the big picture, which is financial independence.

9. It’s just like the picture of a donkey dragging a cart with its owner dangling a carrot just in front of its nose. The donkey’s owner may be going where he wants to, but the donkey is chasing an illusion. Tomorrow there will only be another carrot for the donkey.

When you follow money around because someone offers it to you, you are chasing money at a price, the price of your own financial independence and freedom. As long as you maintain the mentality that you only have to work a little harder and continue a little further to be given the money that you want, you will never find yourself actually sitting in the driver’s seat. You will just continue to be led in circles.

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This concludes the first half of the study session for chapter one. Thank you for joining me.

If you would like to participate in this book club, buy or download a copy of Richard Kiyosaki’s book, Rich Dad, Poor Dad, and read it along with me. Each chapter is followed by a study session. I plan to read this book slowly, and thoroughly explore each study session. I would love to do so in the company of others. Good discussion promotes deeper understanding and helps to reveal new and original ideas.

The study session for chapter one also has some personal questions for each reader to think about and answer. I will soon be exploring these questions and plan to share my answers with you at some point in the following week.