• The poor and the middle-class work for money. The rich have money work for them.
• There is a difference between being poor and being broke. Broke is temporary. Poor is eternal.
• Rich people acquire assets. The poor and middle class acquire liabilities that they think are assets. An asset puts money in your pocket. A liability takes money out of your pocket.
• Wealth is a person’s ability to survive so many number of days forward—or, if I stopped working today, how long could I survive?
• Financial struggle is often the result of people working all their lives for someone else.
• The primary reason the majority of the poor and middle class are fiscally conservative—which means, ‘I can’t afford to take risks’—is that they have no financial foundation.
• Example of real assets
  • Businesses that do not require my presence I own them, but they are managed or run by other people. If I have to work there, it’s not a business. It becomes my job.
  • Stocks
  • Bonds
  • Income-generating real estate
  • Notes (IOUs)
  • Royalties from intellectual property such as music, scripts, and patents
  • Anything else that has value, produces income or appreciates, and has a ready market
• If you work for money, you give the power to your employer. If money works for you, you keep the power and control it.
• “Each dollar in my asset column was a great employee, working hard to make more employees and buy the boss a new Porsche.”
• Financial IQ is made up of knowledge from
  • Accounting
  • Investing
  • Understanding markets
  • The law
• A corporation earns, spends everything it can, and is taxed on anything that is left. While individuals that work for corporations earn, get taxed, and spends what is left.
• 1031 exchange - allows you to avoid paying capital gains taxes when you sell an investment property and reinvest the proceeds from the sale within certain time limits in a property or properties of like kind and equal or greater value.
• The single most powerful asset we all have is our mind. If it is trained well, it can create enormous wealth seemingly instantaneously. An untrained mind can also create extreme poverty that can crush a family for generations.
• The problem with ‘secure’ investments is that they are often sanitized, that is, made so safe that the gains are less.
• Two kinds of investors
  • The first and most common type is a person who buys a packaged investment. They call a retail outlet, such as a real estate company, a stockbroker, or a financial planner, and they buy something. It could be a mutual fund, a REIT, a stock or a bond. It is a clean and simple way of investing. An analogy would be a shopper who goes to a computer store and buys a computer right off the shelf.
  • The second type is an investor who creates investments. This investor usually assembles a deal in the same way a person who buys components builds a computer. I do not know the first thing about putting components of a computer together, but I do know how to put pieces of opportunities together, or know people who know how.
• “You want to know a little about a lot” was rich dad’s suggestion.
• Look down the road at what skills they want to acquire before choosing a specific profession and before getting trapped in the Rat Race.
• The reason so many talented people are poor is because they focus on building a better hamburger and know little to nothing about business systems. This is why McDonald’s make so much money.
• The main management skills needed for success are:
  • Management of cash flow
  • Management of systems
  • Management of people
• The most important specialized skills are sales and marketing.