{"id":11376,"date":"2020-07-26T00:05:00","date_gmt":"2020-07-26T04:05:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=11376"},"modified":"2020-07-29T12:37:26","modified_gmt":"2020-07-29T16:37:26","slug":"how-to-create-wealth","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/how-to-create-wealth\/","title":{"rendered":"How to Create Wealth: 5 Tips From Rich Dad, Poor Dad"},"content":{"rendered":"\n

Are you looking for tips and advice on how to create wealth<\/a>, and don’t know where to start?<\/p>\n\n\n\n

In Rich Dad, Poor Dad Robert Kiyosaki outlines his philosophy for learning how to build wealth<\/a> with the ultimate goal of becoming financially independent<\/a>. In the book, he focuses on how to create wealth for the long term so you can make the most of your money. <\/p>\n\n\n\n\n\n\n\n

How to Create Wealth<\/h2>\n\n\n\n

In Rich Dad, Poor Dad the author’s goal is to explain how to create long term wealth. These tips come from the book’s lessons and the author’s explanations on how to implement them.<\/p>\n\n\n\n

Tip 1: The First Rule of How to Create Wealth\u2014The Rich Don\u2019t Work For Money <\/strong><\/h2>\n\n\n\n

After a narrative, Rich Dad, Poor Dad <\/em>covers Robert Kiyosaki\u2019s major lessons from Rich Dad on how to create wealth. <\/p>\n\n\n\n

Most people work 40+ hours a week to earn salaries. Many then take their earnings to 1) buy stuff they think will make them happy (but this is short-lived), 2) save the remainder in a conservative way. <\/p>\n\n\n\n

While this ensures some degree of stability, it doesn\u2019t make you rich. And working to earn a pension makes you financially dependent – let alone the risk that pensions won\u2019t be funded decades from now, when you need it.<\/p>\n\n\n\n

The counter-intuitive lesson here is this: the rich don\u2019t get rich merely by being paid higher salaries <\/strong>(though this is a great help). They get rich so by owning things<\/strong>. No one on the Forbes billionaire list got there purely with a salary. This is one of the fundamental things to know about how to accumulate wealth. <\/p>\n\n\n\n

The key to financial independence<\/a> is having money that makes more money.<\/strong> You want your money to make enough money that you don\u2019t have <\/em>to work anymore.<\/p>\n\n\n\n

Tip 2: Buy Assets, Not Liabilities<\/strong><\/h2>\n\n\n\n

So how do you put your money to work<\/a> for you and figure out how to create wealth? The key is to buy things that generate income (assets). You do NOT want to buy things that lose money over time or incur large expenses (liabilities).<\/strong><\/p>\n\n\n\n

This is obvious enough. But the most deceptive investments look like assets, but are actually liabilities<\/strong>. <\/p>\n\n\n\n

Tip 3: Forming a Corporation<\/strong><\/h2>\n\n\n\n

Robert Kiyosaki\u2019s solution? Form your own corporation<\/strong> as one way to figure out how to build wealth. Here are its benefits:<\/p>\n\n\n\n

Deductions for Expenses<\/strong><\/h4>\n\n\n\n

You can pay legitimate business expenses from pre-tax money, rather than post-tax money.<\/p>\n\n\n\n

Say you have a business that buys and sells real estate. To travel to see new properties, you can pay for a car. You have business dinners that you can partially expense. You can have board meetings in exotic locations you would have vacationed anyway.<\/p>\n\n\n\n

Tip 4: Overcome Your Mental Obstacles <\/strong>to Create Wealth<\/h2>\n\n\n\n

More people have the potential to be happy, but common obstacles get in the way. People who overcome these obstacles get a huge advantage on their journey learning how to create wealth. Common mental obstacles<\/a> include self-doubt<\/a>, fear, cynicism, laziness, guilt over feeling greedy, arrogance, and lack of money. Here are some examples of how these obstacles can appear:<\/p>\n\n\n\n