- ASIN: B06XV926YF
I had read this book a long time back and decided to re-read it now. It is surprising how many insights I received in the process. So I have decided to summarize this classic and follow it up with all the books in the series.
Only Rule For Getting Rich:
Know the difference between Assets and Liabilities. Buy Assets.
An Asset is something that puts money in my pocket.
A Liability is something that takes money out of my pocket.
As someone from an accounting background, for a long time I was resistant about the above definition. But now when I am training myself to think like an investor, this is the only definition that makes sense. The only practical way to evaluate opportunities.
Mind Your Business:
Your profession is not your business. While working your day job, work on a side hustle, a business that you can create an asset for you over the long term.
To Become Rich: Obtain Financial Intelligence
Financial IQ is made from four broad areas of expertise
- Accounting
- Investing
- Understanding Markets
- Law
Rich spend time understanding the above and use it to their advantage to retain the money earned by them.
Financial Literate but not Rich:
Five Reasons why a Financially Literate person is not Rich:
- Fear
- Cynicism
- Laziness
- Bad Habits
- Arrogance
Personally I think, it is just Fear, which wears different masks. Like the Fox that called the grapes sour, we express our Fear in different ways such as cynic (disbelief, to avoid taking action), Laziness (Fear of rejection disguised as Laziness), Bad Habits (Not following through), arrogance (Ego+Ignorance)
Rich Invent Money
Rich take calculated risks, where they have a big probability of winning with limited loss (Stocks/Options), or a small probability of winning with massive gains (Eg: Venture Capital)
Work to Learn: Don’t work for money
Look at your Job as a place to learn and hone your skills, rather than a way to earn a living. Your focus will be how to make yourself a better version of you which would automatically make you a more valuable employee, if you are learning on the job skills.
Even if you have read the book before, I suggest you to read again. This is one of the books that grows on you and gives you new lessons as you step up your game.
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