There are certain things you can do that will always give you a business advantage. Learn what these are from one of the world’s most successful businessmen himself.
Robert Kiyosaki amassed a fortune of more than $100 million across his career. Needless to say, the speaker, entrepreneur, investor and popular author is an expert in all things finance. And his most well-known book Rich Dad, Poor Dad made him world-famous.
So, what exactly does Kiyosaki depend on to earn millions?
He leverages his wealth of financial information.
It’s what he uses to build his wealth, not to mention help others achieve financial success.
Kiyosaki says that he has many financial profit secrets to share with the world. And the good news is that he doesn’t charge people for all of them.
So if you want to start getting better at running your business, the following Kiyosaki nuggets should help you.
Secret #1. Spend on Assets Instead of Liabilities
One of Kiyosaki’s favourite lines to say is that people should always spend on assets, not liabilities. A simple example of this is to invest in real estate instead of buying fancy clothes or new cars.
Kiyosaki isn’t against creature comforts. But he is against making them priorities over building wealth.
First, it’s important to – that’s why he sees real estate as an asset investment and buying a new car or flashy clothes as investing in liabilities, at least early on.
Of course, Kiyosaki has a pragmatic view of assets, too. He won’t consider his own home as an asset, even if it’s mortgage-free, as it incurs liabilities like utilities, insurance and maintenance costs, and so on.
A home that you live in is not a wealth-generating asset. But a building that you can rent out and goes up in value is a wealth-generating asset.
Secret #2. Pay Yourself First
Now, this may sound a bit odd. How can you afford to pay yourself if your business isn’t doing great? How can you pay yourself first if you need money to invest in new ideas or assets?
This all has to do with good budgeting.
To build wealth, you have to start earning some money. By this, it means paying yourself something like a salary. Sure, you have to pay bills and other expenses, but money has to start going into your pocket, too.
Pay yourself first and save that money. Once you have money saved that you don’t need, then you can invest it in assets that can increase your cash flow and make you rich.
Secret #3. Know that Not All Debts are Bad
Good debt can make you rich, according to Kiyosaki. People often look at debt as a bad thing, but not all debt is bad as the renowned investor likes to put it.
You can develop a strategy to make debt work in your favour.
But to do that, you first need to understand what differentiates a good debt from a bad one.
Kiyosaki classifies good debt as something you can use to generate income. That’s why a mortgage used to buy an income-generating investment property is good debt. This is assuming, of course, that you can cover the mortgage through the rent.
Bad debt is debt that has you working extra to cover interest rates. It’s the kind of debt that you create when you overspend on your credit card. Kiyosaki considers mortgage to be a bad debt when it doesn’t produce an income, like that of his own home.
If you do incur bad debt, you should prioritise paying it off. Learn from your mistakes and avoid getting in a similar position again.
If you’re struggling with debt because of the pandemic here’s our Advice to Small Businesses for Weathering the COVID-19 Storm.
Secret #4. Expand Your Financial Knowledge
There’s perhaps no faster way to create wealth than having sufficient financial education.
Can you really say that he doesn’t have a point?
So here’s one of the open secrets Kiyosaki shares very often with the world:
It’s not just about how much you learn once and applying that knowledge moving forward. You have to continue to get smarter.
The world constantly evolves and, with it, so does the business world. So, business owners and investors need to adapt to changing times.
The strategies of today may not work so well tomorrow. You can’t spot new opportunities if you don’t learn about them. And you can’t implement new strategies if you can’t understand them.
Financial knowledge is something that anyone can accumulate. But too many do it in small amounts.
The key to wealth is to continue expanding your financial knowledge. That’s how you can prepare for a wide range of unforeseen events and speed bumps.
Secret #5. Learn From Your Mistakes
Failure breeds success, some might say. Kiyosaki agrees with the idea and even admits that failure was one of his secrets to success.
When he worked for Xerox, Kiyosaki struggled a lot in sales - a stark contrast to what people know of him today. So he took up volunteering to practice asking for donations and learn how to become a better salesperson.
Failure helped him understand his flaws.
If you fail, it’s not the end of the world. Most business owners learn from mistakes, not from successes. But you have to adopt the right mindset and continue to push forward.
Having the right mindset means being open to criticism and noticing your own flaws. If you can do that, you become more likely to learn from your mistakes and adapt.
We invite you to our free 6 steps webinar, which will help you get a 360 ° view of your business under an ActionCOACH certified Business Coach. Learn how to overcome the obstacles and ultimately grow your business.
Personal and Business Advice in One Package
Although these are just a handful of secrets, Kiyosaki’s advice is applicable in every aspect of people’s lives.
Business owners can learn from their mistakes. They have to invest in assets to boost profits. Some debts can help businesses navigate harsh times and even increase productivity.
And on top of everything else, knowledge is key to wealth-building. Whether as an investor or a business owner, you need financial education to succeed. You have to understand how to operate, optimise, and grow your business to reach your ultimate goals.
If you want to learn more about Money in Business read Money in Your Business: The Key Problems and What You Need to Know
For more wealth-building secrets and advice, feel free to contact us. Working with a business coach is one of the fastest ways to learn.