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Diggin’ the Rich Dad

As promised, here’s my review of Rich Dad’s Increase Your Financial IQ by Robert Kiyosaki.  It’s a great companion piece to Larry Winget’s You’re Broke Because You Want to Be.

I have to admit up front that I’m a big Rich Dad, Poor Dad fan.  Kiyosaki’s basic overall premise is that it’s better to live off of income from assets than income from a paycheck.  You get to keep more of your money (lower tax rate on capital gains vs. income tax, and more write offs), plus your income doesn’t depend on the number of hours you’re willing to work.  At some point, we are all going to have to stop going into the office.  Kiyosaki just wants you to be able to stop working long days sooner rather than later!  It’s better to prepare and choose your office retirement, than have someone else choose the day for you.

In this audio tape, Kiyosaki assumes you know his basic premise, though he does repeat some of his history.  He defines “Financial IQ” as the measurement of your financial intelligence — in other words, how much of your money you learn to keep.  Here are his “Five Financial IQs” or five ways to increase the measure of your financial intelligence — aka “the cash in your pocket.”

  1. Making More Money – Learn how to make the highest, best use of your money. He suggests putting 30% of each paycheck aside for investing later in assets that will bring you returns.  The premise being that you’ll bust your hump to pay your electric bill, but not set aside for assets…so if you set aside 30% and your electric bill is hanging out there, you’re more likely to go pick up an extra job or work another shift.
  2. Protecting Your Money – Learn how to best protect your income from taxes, attorneys, high expenses, and more – legally, of course!
  3. Budgeting Your Money – Spend your money on the right things, such as assets that bring you passive income.
  4. Leveraging Your Money – Calculate where and when best to borrow money – from banks or partners – to use for acquiring assets that will bring in cashflow, and give you a high Return on Investment (ROI), aka “make more money per dollar spent.”
  5. Improving Your Financial Information – Keep an eye out for opportunities to learn more about financial opportunities, and never underestimate the power of learning from experience.  Take calculated risks, and learn from your mistakes.

This is another set of CDs (3 for about 6 hours of total time) that I play over and over.  Each time I learn something new…and no, I don’t miss the Pop 10 hits on the radio…though I do take time 1-4p to listen to Dave Ramsey, and the occasional tune in to NPR.

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