What is the first thing that flash into your mind when heard the name Robert Kiyosaki? First thing that came into my mind when see this name is Rich Dad Poor Dad.
Yes, Robert Kiyosaki is the author of Rich Dad Poor Dad – which is one of the bestseller that remain on top of the New York Times bestsellers list for over six years.
Robert Kiyosaki is an investor, an entrepreneur and also an educator. He has a totally diffirent mind set in terms of money. He has challenged and changed the way tens of millions of people around the world think about money.
Robert Kiyosaki actually shared 3 most important Financial Management chart with us. All his talk were all around these 3 chart. We got to fulfill all the 3 chart in order to success in business or achieving financial freedom.
Chart 1: BI Quadrant
E =Employee who work for someone else
S = Self-employed who work for yourself with no employer and no employee or specialist like Doctor, Lawyer, etc
B = Business Owner who hire people/expert to work for them
I = Investor who use money to generate cash flow income
No matter how hard you work under quadrant E and quadrant S, no matter how professional you are, you are still earn only when you work. You will have no income once you stop working. To achieve financial freedom, we need to go towards quadrant B and quadrant I.
For those who are under employment, I do not ask you to stop working now. You may actually start doing your investment while still under employment if you were to play safe.
Chart 2: Complete Business Pyramid
As per the image above shows, there are total of 8 important component to achieve to be consider as a complete or successful business.
The outer 3 component are the key requirement for a successful business.
Team: A successful business should consider of a strong team. If the business owner is the smartest guy in his business, then he is in trouble. Haha. Why? If the business owner is the smartest guy in his business, what happen if he is not around?
Leadership: We need a good leader to manage all the team within the business. If we have a big team but do not have a good leader, the team will not be strong to take care of the challenges a business will face.
Communication: All the team member shall be able to communicate well internally and externally in order for the management team to convey some information or company goal to every single employee and for every one in the company to then transfer this message to their prospect.
System: Building system can be anything from jobscope from each personnel to any recording system, tracking system, etc that everyone shall follow in order for the business to run well. Everything will be messed up if there is no system to control all the people.
Legal: Not too sure on this. Sorry, Robert Kiyosaki did not actually touch much on this.
Product: This is the least important among all the above. If all the 4 key thing has been put into place nicely, you do not really need a good product to sell for your business.
Chart 3: Income Statement and Balance Sheet
Income: Referring to money coming into our pocket. A property rented out is generating income.
Expenses: Referring to money going out of our pocket. Our house that we need to spend money to maintain it is expenses.
Asset: Referring to something that will appreciate over time such as business, real estate, stock, gold, education, etc. This will be the key thing where it will help putting money into your pocket.
Liability: Referring to something that will depreciate over time such as cars, house, debt, etc. Liabilities will be taking money out of your pocket. I was shocked to realise that my investment in my own home was not considered an asset, but a liability instead.
4 key learning from Robert Kiyosaki to become rich:
- Let money works for you — Don’t work for money.
- Become a business man and investor, because Money work for you. They hire the professionals to work yet they receive majority of the profit from the business.
- Increase our financial literacy through good financial education.
To become rich, we need to master the fundamentals of money before we start to invest or go into business. We need to understand income statement and balance sheet, and truly understand the definition of asset and liability. - Last, but not least, conquer our fear and desire towards money.
I must highlight that that Robert Kiyosaki taught more than what I mentioned above. If you have not read his work, I recommend you go to richdad.com or buy his book “Rich Dad Poor Dad” from the nearest book store.
Robert uses simple English, so it was easy to comprehend his teachings especially for many Asians like me, whose mother tongue is not English. He also presented his teachings in the form of a story, which makes it enticing to read.
