Investing in real estate and building businesses are the main wealth creation vehicles for the rich.
The rich prioritize tangible assets like real estate and businesses over mutual funds for better control and tax advantages.
Financial literacy and building a team of advisors are crucial for wealth building.
Deep dives
Building wealth through business and real estate
The rich prioritize building businesses and investing in real estate as their main vehicles for wealth creation. They understand that real estate provides capital appreciation, tax advantages, and passive income, while businesses offer residual or passive income. They leverage their investments by borrowing against them and use strategies like insurance and corporate entities for protection. This strategy allows them to have more control over their income and expenses, and they focus on long-term value and cash flow rather than short-term gains.
The flaws of mutual funds and paper assets
While many advisors recommend mutual funds for investment, the rich generally steer clear of them. Mutual funds are considered paper assets and lack the control and tax advantages that real estate and businesses provide. The rich understand that investing in mutual funds can be risky and inefficient. They prefer tangible assets like real estate and businesses, which offer more control over their investments and tax benefits like depreciation. Additionally, the rich prioritize building pipelines of income through their investments, ensuring a steady cash flow and long-term wealth.
The power of financial literacy and building a team of advisors
Financial literacy is a crucial skill for becoming wealthy. The rich understand the importance of understanding numbers, financial statements, and investment analysis. They surround themselves with smart advisors who provide guidance and expertise in areas like taxation, business planning, and financial planning. By building a team of advisors, they gain access to specialized knowledge and ensure they make informed decisions. They recognize that they don't need to be experts in every aspect of wealth building, but rather strategic in seeking advice from professionals.
Creating a long-term wealth strategy
The rich focus on creating a long-term wealth strategy rather than seeking short-term gains. Their strategy involves building businesses, investing in real estate, leveraging their investments, and protecting their assets with insurance and corporate entities. They understand the importance of staying invested for the long term and creating multiple income streams. They prioritize cash flow, tax advantages, and control over their investments, while also embracing the concept of delayed gratification. By following this strategy, the rich are able to build wealth and secure their financial future.
Understanding Personal Numbers and Assets
Many people struggle with understanding their own personal numbers and fail to recognize what their numbers are telling them. They often consider items like a house, a big screen TV, or a vacation home as assets, but fail to realize that these are actually assets for the bankers, real estate agents, and companies who sold them. The word "mortgage" comes from the French word meaning "engagement until death", highlighting the financial institutions' desire to extract money regularly from individuals. The poor middle class, who are not financially alert, find themselves constantly at the wrong end of the financial pipeline, continuously paying out rather than receiving income.
The Importance of Strategy and Financial Literacy
Focusing on the product rather than the overall strategy is a common mistake made by the poor middle class. Building financial literacy is crucial in order to make sound investment decisions. The Cashflow board game is designed to make learning about personal finances and analyzing deals a fun experience. It teaches players to analyze their personal financial situation, assess potential investments, and align them with their overall strategy. By making investments easier and reinforcing the importance of strategy, it becomes increasingly attainable for individuals to build wealth, similar to how the rich do it. Surrounding oneself with knowledgeable advisors and mentors also plays a significant role in achieving financial success.
It’s a important and great lecture by Robert kiyosaki himself For running your advertisement and promoting your company/products mail us on - Teamrichdadpoordad@yahoo.com
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