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In his bestselling book Rich Dad Poor Dad, Robert Kiyosaki highlights a fundamental difference between your profession and your business, stressing the importance of building an asset column to achieve financial freedom.
Many people confuse their job with their business, Kiyosaki explains. For instance, when asked what they do, someone might say, “I’m a banker,” but when asked if they own the bank, the answer is usually, “No, I work there.” According to Kiyosaki, this is where people misinterpret their profession as their business.
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To truly become financially secure, Kiyosaki advises people to “mind their own business,” meaning they should focus on their asset column rather than just their income from a job. “Your business revolves around your asset column,” he says and keeping that strong is the key to long-term wealth. Once money enters that column, Kiyosaki emphasizes, “Never let it come out.” He encourages people to view each dollar that enters their asset column as an employee working for them. The benefit? “Money works 24 hours a day and can work for generations.”
In times of financial hardship, Kiyosaki notes that what many believe are assets, such as homes or cars, often don’t hold up. These items, he argues, can usually only be sold for a fraction of their value. Even if there’s a gain from the sale, taxes often diminish it. Instead, Kiyosaki encourages readers to focus on acquiring real assets, such as investments or businesses, rather than liabilities or personal effects with little to no long-term value.
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His advice? Keep your day job and be a great employee but always work on building your asset column. “Start buying real assets, not liabilities,” Kiyosaki advises. By keeping expenses low, reducing liabilities and focusing on solid assets, individuals can create a base of wealth that will grow over time.
Kiyosaki says you can indulge in luxuries as your cash flow increases, but there’s a catch: “Rich people buy luxuries last, while the poor and middle class tend to buy them first.” For Kiyosaki, the message is clear – focus on making your money work for you by building a strong asset base and financial independence will follow.
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This article Robert Kiyosaki, ‘Rich Dad Poor Dad,’ Says If You Want To Be Rich, Mind Your Business And Let Your Money Work 24 Hours A Day originally appeared on Benzinga.com
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