Plum Dozen – Inspiring Person – Robert Kiyosaki
Hands down the best book I've read about money management, building wealth and how to teach your children about money is Rich Dad Poor Dad by Robert Kiyosaki.
The principles of the book actually came up in our house last night when we were sitting around talking about how much money the kids have earned selling their wood art to family members.
Sydney asked me why I haven't bought any wood in a long time? I told her because I didn't know it was still for sale, she really should be advertising.
She asked what advertising is?
I told her it's telling people your product is for sale.
So I applauded the kids for earning so much money by selling their wood, and then Randa said they could also be earning money by doing chores. I don't disagree with her, the kids should definitely learn responsibility and the value of hard work by contributing to our household, but we'd also like to see the kids earn money doing what they love so maybe one day they'll start their own businesses if they feel like it.
When I was a kid, I scoured the bushes of my local golf course looking for lost golf balls. I cleaned up the ones I found and then sold them back to the pro shop so the pro could sell them back to his members. I could easily earn $6-10 per day. I had a blast!
The main principle I learned about Rich Dad Poor Dad is the average person works based on time - a salary or hourly rate - while rich people own their own businesses and have their money work for them. They don't get paid based on time spent, they focus on their asset column and create things that make them money.
Working for money is the easiest path, it's the path most people take because that's what we were all taught growing up. It's safe and doesn't feel risky.
But having money work for you by owning your own business or investing is the path we should be taking. Most people don't do it because it feels scary. But most of the time the fear is fear of the unknown, or ignorance and not being financially educated.
Here's another example....
Let's say a family wants to buy a new luxury, let's say it's a boat. The average person will take out a small loan to pay for their luxury. They're creating a liability because it's taking money out of their pocket every month and putting money into the pocket of the bank - plus interest!
The rich person creates an asset that pays for the luxury - like a small business or stocks that pay quarterly dividends. And then pays cash. They're not going further into debt because the asset they created is paying for their luxuries.
So look around you and determine how many assets you have, things that are making you money.
And then determine how many liabilities you have, things that are taking money out of your pocket every month.
I'm working hard on generating our assets: Asheville Crate Co, Plum Family Farm, Bee the Check Mark, the new business I'll be launching in the spring and my ultimate goal of a rental home that generates monthly income and should appreciate over time.
And I hope the kids learn something along the way. I still have lots to learn too, but it's been a fun education.
PS...this morning Sydney came downstairs to show me the new art she created and told me it's for sale. I bought some 🙂