4 crucial lessons from 'Rich Dad, Poor Dad' that changed the way I think about wealth - Business Insider

" opened my eyes to the world of wealth. Early in life I learned there are fundamental differences between how the rich think and act toward money compared to everyone else. I began to adopt those same thoughts and strategies, and found them to be completely true.1. Most people work for money — rich people have money work for themTalk to just about anyone about how to make money, and the conversation will inevitably gravitate toward.

The situation is very different among the rich, particularly among those who aspire to become wealthy. Though financial planners may recommend saving and investing 10% or 15% of your income on a regular basis, theThere's no question that saving that amount of money can only be accomplished if you can successfully live well below your means. That arrangement is usually temporary. As savings and investments grow, so does the income they generate .

Worse, the majority of middle-class homes are heavily financed. That may be understandable when the home was first purchased. But many people engage in equity stripping by taking home equity lines of credit and second mortgages when enough equity builds in the home. Others engage in serial refinancing, consolidating their first and second mortgages, or taking cash out every few years. The long-term result is that while the value of the home rises, so does the amount of debt.

But that's only the most obvious limit. At a more basic level, you will always earn less than your effort produces. For example, though your work may generate $50 an hour in revenue to your employer, you may only earn $25 for each hour spent. It must be that way because your employer cannot afford to keep you on the payroll without making a profit on your work.

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