If you identify as an introvert, you might feel a little out of your depth in the business world especially online.
You might think making the big bucks in business seems to be something that comes naturally to extroverts.
When many of the most successful and revered people are introvert.
Mark Zuckerberg, Warren Buffett, and Steven Spielberg to name a few.
You’ve been told to work hard, save money, get out of debt, and live below your means. That advice is obsolete if you want to get ahead in life. Robert Kiyosaki argues these exact points in his new book, Rich Dad’s Increase Your Financial IQ.
Which is the latest volume in Kiyosaki’s popular “Rich Dad” series of books – two books include: Rich Dad Poor Dad, and Rich Dad’s Cashflow Quadrant.
These best-sellers have motivated many people (including my family) to take control of their financial lives. Both of these books have been summarized for you here.
“It is not real estate, stocks, mutual funds, businesses, or money that make a person rich. It is information, knowledge, wisdom, and know-how, a.k.a. financial intelligence, that makes one wealthy.” – Robert Kiyosaki.
Kiyosaki divides financial intelligence into five “Financial IQs”:
Most of the book is devoted to exploring these five aspects of financial intelligence in detail.
Many people fail to acquire wealth, Kiyosaki says, because they want the money without the work. He writes,“What many people do not realize is that it’s the process that makes them rich, not the money.”
It’s by learning to make money that you can continue to make money.
In order to make money, you must also learn to control your emotions. You must learn to defer gratification. Don’t sacrifice your financial future for a few bucks today.
According to Kiyosaki, the key to making money is learning to solve problems. “In order to grow wealthy you must come to terms with the fact that problems will never go away,” he writes.
Identify the problems preventing you from wealth, tackle them head-on, and the money will follow.
Once you’ve begun to make money, you need to protect it from the 7 financial predators.
Even though Kiyosaki lists seven possible pitfalls, he offers little practical advice for coping with them.
There are two ways to solve a budget crunch: decrease your spending or increase your income. Either will erase a budget deficit, but Kiyosaki believes (as I do) that in the long run, increasing income is a better solution.
Kiyosaki explains that it’s important to think of a budget surplus as a fixed expense. If you decide to save 10% of your income, then make this ten percent a fixed item in your budget.
Treat it just as you would any other bill. Pay yourself first. It’s also important to refuse to live below your means – instead increase your means.
I found this chapter to be the longest and most frustrating chapter of the entire book. It represents the core of Kiyosaki’s financial philosophy. However it’s not presented in a way that makes it relevant to the average person.
Leverage — borrowing money to increase the power of your own cash is good. If you have the financial intelligence to control the investment. But if you’re not in control of the investment, then leverage is risky.
“Most of the people being hurt by the real estate meltdown are people who were counting on the real estate market to keep going up and increasing their home’s value,” he writes.
They borrowed against their home’s inflated value, however had no control over whether the housing market rose or fell. This is a lack of financial intelligence.
Kiyosaki argues that one should use leverage to make low-risk investments, investments in which you, as the investor, have control. This sounds great, but he doesn’t provide any relevant examples.
He only discusses his recent purchase of a 300-unit, $17 million apartment complex in Tulsa, Oklahoma. I don’t know about you but I do not $17 million to invest into one investment. The average person might only have $17,000? or even $1,700 to invest with right now?
So we are left wondering at the end of this character on how does the average person make leverage work for them?
In order to improve your financial information, it’s important to:
“Ultimately,” Kiyosaki writes, “it is not the asset that makes you rich. Information makes you rich.”
Though an overview of the five Financial IQs forms the bulk of this 200-page book, it’s actually the last fifty pages that hold the most value. Where Kiyosaki discusses “the integrity of money” and explains how to develop your financial genius.
I like the idea of Rich Dad’s Increase Your Financial IQ. The book fills a niche about which little has been written.
It’s motivational. It’s a breath of fresh air and offers a perspective often missing in personal finance discussion. I also like that his writing always motivates me to action, pushing me to pursue my goals.
Diversification isn’t a hoax, or a scam. Other than Kiyosaki, it’s embraced by most financial authors I’ve ever read or heared about.
Diversification is a central belief of the modern portfolio theory. It’s backed by facts, not opinions.
In the book Kiyosaki says “The richest investor in the world, Warren Buffett, does not diversify.” His implication is that you should not diversify either, but that’s completely counter to what Buffett believes.
For 99% of all investors, Buffett recommends diversified index funds. So It’s duplicitous of Kiyosaki to pretend otherwise.
I hope you enjoyed my summary of Rich Dad’s Increase Your Financial IQ. If you would like to read it yourself you can get a copy here.
As always with Kiyosaki, there were more golden nuggets of information to be found in his book to really get you thinking.
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I will leave you with this message: ‘if you do what you love – money will follow.’
Talk Soon,
Nicky Cane
“We don’t buy and sell stocks based upon what other people think the stock market is going to do
(I never have an opinion) but rather upon what we think the company is going to do.”
– Warren Buffett
I’m in awe of what Warren Buffett has accomplished. He continues to write, rewrite and break the rules of investing, business, and entrepreneurship. There’s an endless amount that can be learnt from Buffett’s decades in business.
One of the things that impresses me most, though, is that this is all Warren everything he’s accomplished has been on his terms. No one handed him the proverbial silver spoon.
He worked hard, thought outside the box and continued to innovate, elevate and accelerate. And it paid off big time.
Warren has been building his fortune for more than 60 years. As chairman and the single largest shareholder of Berkshire Hathaway for nearly 50 years, Warren’s investment decisions have been carefully watched and highly scrutinized. They’ve also, though, been so on-point it seems almost unfair—like he has a crystal ball hidden away somewhere.
In my quest to understand Warren’s methods and processes, I stumbled on Jeremy Miller’s book, Warren Buffett’s Ground Rules. The author Jeremy C. Miller is an investment analyst for a mutual fund company and a 15-year veteran of the financial industry.
Miller’s book is a must-read whether you’re a huge Warren Buffett fan or simply want to gain that critical edge in business and in life.
Ground Rules covers Warren’s first 14 years as a true business mogul, including his tenure at the helm of Buffett Partnership Limited.
While there’s lots to dive into in Ground Rules, what I find most fascinating is the fact that the book itself is based on 33 letters Warren wrote to his partners from 1956 to 1970, outlining his business strategies and philosophy.
Miller puts it all into his book with a powerful context and strong narrative that weaves every piece together and creates a solid work any entrepreneur, business leader or investor can learn from. You’ll find lots of important tidbits here, many of which can be directly applied to your business—even if you haven’t reached Warren Buffett status just yet.
Overall, the content in Ground Rules is perfect for the business leader or long-term investor who wants to protect their assets and grow their success. In fact, Warren himself endorsed this book and gave the author express permission to work with his letters. If that doesn’t speak to the quality of Ground Rules, I don’t know what does.
Warren Buffett’s Ground Rules Book Layout:This book is much more than a compilation of excerpts from Buffett’s letters, smartly organized by investment theme. Miller begins every chapter with an articulate and insightful synthesis, which helps the reader understand Buffett’s key ground rules on each theme.
Buffett’s correspondence with his early partners was folksy and insightful. Buffett never wrote an investment guide. These letters make up the closest thing investors will ever have to a Buffett textbook on investing.
Among Buffett’s early beliefs are:
I Personally found Ground Rules to be a powerful tour through the mind of a man who has consistently astonished the modern investment world. In this book, we get a better understanding of his unorthodox philosophy of diversification, which reversed what was then considered common knowledge when published.
We also get a unique opportunity to follow the development and reasoning behind Warren’s conservative long-term strategies, which have proven effective for decades despite endless movement in the marketplace.
This book is well worth reading and will make you rethink your financial, business and investing views…at least a little.
Talk Soon,
Nicky
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